Manufacturing in Mexico, A Strategic Alternative to China

With wages on the rise in China along with increasing shipping costs from China to North America, American companies are closely evaluating the benefits of moving manufacturing operations back to the U.S. Mexico is another viable option for companies looking to cut transportation costs. In comparison with China, Mexico has focused its resources on developing special training and linkage programs that tie in directly with a specific industry in order to strengthen its supply chain market. These technical programs give the workforce the experience necessary to perform and be easily trained by tier 1 and tier 2 multinational companies.

From October 13th through November 18th, 2011, Cook Associates Executive Search polled nearly 3,000 manufacturing executives primarily small to mid-sized U.S. companies. C-level executives and vice presidents in charge of operations, manufacturing and supply chain management participated in the survey. The survey identified that products needing technology improvement or innovation served as the primary reasons for manufacturing returning to the U.S. This included low-volume, high precision, high mix operations, automated manufacturing and engineered products; areas in which most Chinese workers do not meet the skill sets required for the jobs.

The survey concluded that 85% of executives are strongly considering moving manufacturing back to the U.S. and 37% of companies specified rising overseas costs as the primary reason. Companies are focusing more on quality and customer service during this slow economy, which can easily be performed in the U.S. Companies also noted the lack of training in Chinese workers. (Read press release on the survey)

North American Production Sharing (NAPS) is assisting companies to shift some or all of their production to Mexico from China. An example is a manufacturer of heavy metal products with a large network of wholesale and retail distribution in the U.S. After conducting a cost-benefit analysis, the company decided to close down its China manufacturing facility while retaining operations in Southern California and Mexico. An automotive cable manufacturer is also planning to shift some of its production from China to Mexico.  Companies are finding they are able to retain a high level of competitiveness in today’s changing economy by being strategic as to manufacturing locations. NAPS specializes in offering outsourced administrative support to companies interested in manufacturing in Mexico.

Mexico has grown into a key manufacturing hub because of its location and its highly skilled and motivated workforce. As a premier expert in the industry since 1991, NAPS can assist in evaluating manufacturing costs in China compared to the U.S. and Mexico. Utilizing innovative strategies to lower production costs, NAPS has helped companies reduce up to 60% of their total production costs by identifying ways to take advantage of the strengths of both Mexico and China.

Monica Hanono
Industry Liaison & Marketing Analyst
monica.hanono@napsmexico.com
phone: 858-794-7947
toll free: 800-551-8581

About NAPS
NAPS is a premier shelter company in Mexico providing start-up and ongoing administration for companies manufacturing in Mexico.  NAPS facilitates the relocation and expansion of labor intensive processes mainly along the border region of Mexico.  Since 1991, NAPS has played a key role in ensuring the success of 70 Mexico manufacturing operations including:  Esterline, Hewlett Packard, Intuitive Surgical, JAE, Monster Cable, Parker Hannifin, Speck Products, Toyota & Qualcomm.  For more info about NAPS and the shelter services in Mexico we offer please visit www.napsmexico.com

About Cook Associates Executive Search

Founded by executive search pioneer Ruth Cook in 1961, Cook Associates Executive Search has thrived for more than 50 years because of its commitment to securing executive-level talent to drive corporate performance for clients. Cook Associates specialize in recruiting key contributors that range from independent board directors to CEOs to functional VPs and other executives. Within their respective industries, their clients are innovators that span the gamut from Fortune 100 to early-stage companies, including publicly traded, family owned, private equity and venture capital backed companies.  For more information, visit www.cookassociates.com/executive-search.


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