How to successfully move your manufacturing to Mexico?
Mexico, an attractive destination for manufacturing Moving manufacturing to Mexico has become a strategic move for various companies thanks to the competitive costs it offers, both in terms of labor, taxes and regulations, which make this country a very profitable option for companies seeking expand in the global market. If you are thinking about carrying out a manufacturing project, Mexico should definitely be on your radar and here we tell you why. 5 global challenges of manufacturing today Today, the manufacturing industry faces numerous global challenges that affect the competitiveness of companies abroad, for example: 1. High costs and competitiveness The increase in production costs in developed countries directly impacts the prices of manufactured products. This represents a financial challenge for companies as they need to find ways to reduce them to remain competitive in the global market. 2. Logistics and production times Transportation logistics and inventory management can be a headache for companies, as it involves coordinating the movement of raw materials, components and finished products throughout the entire production chain. Efficiency in this process is vital to reduce production times and meet established deadlines. 3. Regulations and trade barriers Each country has its own policies and regulations regarding the import, export and production of goods. This can result in a regulatory maze for businesses as they must ensure they comply with all established standards and requirements. Likewise, trade barriers, such as tariffs and import quotas, can make it difficult to access certain markets and weaken the competitiveness of companies. 4. Geopolitical instability Political conflicts, trade tensions between countries and changes in government policies can create uncertainty and affect the business outlook. This forces companies to reevaluate their manufacturing strategy and look for new destinations that offer political and economic stability. 5. Changes in consumer preferences Consumers are increasingly aware of the sustainability, quality and origin of the products they purchase. This requires companies to adapt their manufacturing processes to meet these changing demands. In addition, the rapid evolution of technology and the demand for customized products are also transforming the way they are designed and manufactured. Relocation strategies: build or outsource in Mexico? When it comes to moving your manufacturing to Mexico, there are two main options to consider, let’s look at each of them in detail. Likewise, it is essential to carry out a detailed analysis of the costs and times involved. Let’s look at some aspects to take into account in this process. In addition to the above, Mexico offers a series of tax and infrastructure advantages that can be capitalized by moving your manufacturing to the country. Let’s take a closer look at what we mean. Mexico, a solution for manufacturing challenges In recent years, Mexico has established itself as one of the main destinations for the manufacturing of industrial products worldwide. But what makes this country so attractive for companies? Privileged geographical location By sharing a border with the United States, Mexico becomes a strategic gateway to the largest market in the world. This implies a reduction in transportation times and costs, facilitating the efficient distribution of manufactured products, both in the domestic and international markets. Qualified and competitive workforce. The country has a large number of professionals in the field of design, engineering and manufacturing, which allows companies to find workers with the necessary skills to carry out their projects. In addition, salaries in Mexico are usually lower compared to other developed countries, which translates into reduced costs for companies. Free trade agreements. Mexico has a wide network of free trade agreements with more than 50 countries, including the Treaty between Mexico, the United States and Canada (T-MEC), providing preferential access to different international markets, eliminating tariff barriers and facilitating the export of products. manufactured goods, as well as the import of raw materials and components at competitive prices. Robust supplier and subcontractor sector. Which specialize in the manufacturing of components and the assembly of products, which simplifies the supply chain and reduces logistics costs. In addition, the geographical proximity to the US allows a quick response to market needs and greater flexibility in product delivery. Developed logistics infrastructure. New ports, roads and airports have been built with the aim of facilitating the mobility of goods within and outside the country. This translates into shorter delivery times and greater efficiency in the supply chain. Not to mention, Mexico has also invested in the development of industrial parks and special economic zones that offer a wide range of services and facilities for the manufacturing industry. Political and economic stability. Mexico has managed to maintain political and economic stability compared to other countries in the region. This inspires confidence in investors and provides a favorable environment for the continuity of business operations in the long term. Manufacturing in Mexico can represent significant savings when it comes to taxes and regulations as well, since the Mexican government has implemented a series of tax incentives and exemptions to encourage foreign investment that, together with a favorable regulatory environment, facilitate the operation of companies and reduce bureaucracy. Move your manufacturing to Mexico and optimize your plastic injection molding with KLUMEX Taking these factors into account, Mexico has become an attractive destination for global manufacturing. Companies can benefit from the competitive costs, favorable trade agreements, strategic location, logistics infrastructure, and political and economic stability that the country offers.
Why is manufacturing in Mexico a strategic move?
Manufacturing in Mexico: a strategic move The role of manufacturing in today’s globalized world is crucial; Therefore, it not only generates quality jobs, but also promotes the creation of supply chains, encourages innovation and contributes to the economic growth of a country. By having a strong manufacturing industry, Mexico can diversify its economy and reduce its dependence on other sectors, such as oil. Furthermore, such activity can act as a magnet for foreign direct investment. When a company decides to establish its operations in a country, it not only contributes to job creation, but also increases the transfer of knowledge and technology. This translates into a boost for local and regional development, generating a virtuous circle. In the specific case of Mexico, manufacturing has proven to be an important pillar for economic development, managing to increase its competitiveness in the international market and allowing integration into global value chains, positioning it as a relevant player on the world stage. Towards efficient manufacturing: overcoming obstacles in the production process One of the most significant obstacles for the manufacturing industry is the increase in production costs in China in recent years, which has led many companies to look for new alternatives. Another challenge is the trade war between China and the United States, as tariff measures and restrictive trade policies have led companies to reconsider their production strategies. Many have chosen to diversify their operations and look for alternative destinations, such as Mexico. On the other hand, changes in regulations, volatility in financial markets and the lack of legal certainty have affected the planning and execution of manufacturing projects as well. Mexico: the epicenter of competitive manufacturing Faced with these challenges, Mexico is positioned as a strategic solution for companies seeking efficient manufacturing, below are some key reasons: In this sense, Mexico has established itself as a viable alternative for those seeking a notable competitive advantage, because it offers: Competitive costs Skilled labor in the country is more affordable compared to many other regions in the world, allowing companies to significantly reduce their production costs, generating a direct impact on profitability and competitiveness in the global market. Likewise, it has extensive technical talent and qualified labor in various sectors. This guarantees high quality in production and greater efficiency in processes. Proximity to key markets The proximity of Mexico to the United States and Canada facilitates distribution and reduces transit times, which is essential for companies operating in North American markets. Being in the same time zone and being able to offer fast, reliable deliveries to your customers in North America provides a significant competitive advantage to companies that choose to manufacture in Mexico. Additionally, Mexico has favorable trade agreements such as the United States-Mexico-Canada Agreement (USMCA, formerly NAFTA), which provides preferential access to these markets and further facilitates commercial operations. Flexibility and agility Mexico stands out in this aspect thanks to its infrastructure and solid supplier network. These features enable rapid response to changes in demand and specific customer requirements. Other benefits of manufacturing in Mexico In addition to the advantages mentioned above, Mexico has an extensive logistics network that facilitates the import and export of products efficiently. Not to mention, it has a modern and well-developed transportation infrastructure, including ports, airports, highways and railways, allowing for fast and reliable distribution. Likewise, it has demonstrated a strong economy and stable political framework over the years, providing confidence to both domestic and foreign investors and creating a conducive environment for investment and business growth. The Mexican government has even established a series of policies and programs to attract foreign investment and promote the competitiveness of the manufacturing industry. This includes tax incentives, training programs, support for research and development, and the creation of special economic zones. Hand in hand: collaboration in manufacturing Collaboration in manufacturing involves working hand in hand between different actors in a supply chain. This can include everything from input suppliers to manufacturers and distributors. The main objective is to optimize processes, reduce costs and maximize efficiency at each stage of production. Mexico has the opportunity to become a reliable partner in this sense, as it has the infrastructure, the supply chain and the qualified workforce. In addition, its strategic location facilitates operations. Companies can establish design and production centers in the country, and work closely with suppliers and customers in different regions of the world. This not only reduces response times, but also improves communication and decision making. This strategy can also boost research and development of new products and technologies. By working as a team with other companies and experts, companies can share knowledge and experience, which can lead to the creation of innovative and competitive solutions. Ready to optimize the manufacturing of your projects in Mexico? In an increasingly competitive and dynamic business environment, it is essential that companies carefully evaluate their manufacturing options and seek opportunities that provide them with long-term competitive advantages. Now that you know why manufacturing in Mexico is a smart choice that can make a difference in the success and growth of your business, are you ready to take advantage of this strategic move? Contact Us!
