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Mexico Manufacturing Expansion Creates Local-for-Local Supply Chain Benefits

July 19th, 2020

Manufacturers around the world have been closely watching the ongoing trade war that has been occurring between the United States and China. The trade war impacts a range of goods, raw materials and services. Due to the volatile economic environment, many companies are re-strategizing supply chain management.  The trade tariffs have been an unwelcome rollercoaster for manufacturers. The rise in tariffs and what products they impact has been sporadically announced, causing confusion and well as supply chain worries for manufacturers that have small and large operations in China or sourcing from China.

With goods placed on and off again on the tariff list, many manufacturers seek economic stability for the operations. They are eyeing Mexico as a more cost-effective alternative.

Manufacturing Opportunities in Mexico

Unlike the trade disagreements happening with China, Mexico was able to negotiate the NAFTA/USMCA with the United States and Canada. This strategy has created an appeal for US companies to move their operations and supply chain to Mexico to take advantage of the new trade agreement. They have the opportunity to avoid the rising tariffs between the United States and China. There are also several other reasons why Mexico has promoted its benefits to the manufacturing industry.

Regional Location

Since Mexico is only south of the border from the United States, manufacturers can significantly lower their logistics costs. Transportation and logistical strategies are simplified, as manufacturers can take advantage of land, sea and air transport to meet time-to-market deadlines. In addition, due to Mexico’s centralized location, manufacturers also have access to South America’s economic opportunities and free trade agreements with this country.

Skilled Labor Force

Mexico has a robust labor force with highly skilled workers that are well versed in industries such as aerospace, medical device, automotive, contract manufacturing, defense and electronics. Mexico also boosts a longer workweek and a lower cost for their labor force. With the high demand placed on production lines, these factors have created cost-effective benefits for companies seeking lower operational expenses and higher quality goods.

Accessibility

While seldom talked about, having accessibility to manufacturing plants is a major factor to potential customers. Customers seeking parts, components or end products want to examine operations to ensure that the manufacturer can meet order quantities and deadlines. In addition, manufacturing leaders and stakeholders can also visit the plant site more easily when situated in Mexico. They can oversee training, ensure management is meeting production goals, and address any issues quickly to get production lines running at full operation levels.

Seeking Precision Machining and Casting Capabilities

Impro has expanded operations into the Mexico region to take advantage of the manufacturing benefits that the country provides since 2016. We are expanding our manufacturing footprint in Mexico by building a two-million square foot manufacturing campus. We offer precision machining and casting processes at our new facility to further promote “Local for Local” supply chain strategies for our customers. We provide precision machining, investment casting, sand casting, aerospace components and surface treatment processes. Contact Us today to learn more.

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