Mexico Manufacturing Offers Solutions For Supply Chain Risks
Mexico Manufacturing is ideally situated for the massive American consumer and manufacturing market that requires multiple vendors, raw materials and technological support that is unimpeded. Of course it is not just U.S. industry that must plan for potential disruptions. Indeed, Japan’s recent earthquake, tsunami and nuclear disaster offer a compelling case for any manufacturer who exports worldwide. Logistics and supply risks must be considered and contingencies planned for in today’s world. Mexico manufacturers play a vital role in providing both first tier manufacturing and backup potential. Japan’s auto industry including Nissen, Honda and Toyota serve as cautionary tales to manufacturing. Case in point is Japan’s reliance on single-sourced materials/production that has affected exports with a 20% decline while shipping costs toJapan are up by 55% since the disaster.
Of course Japan produces more than cars since they manufacture 40% of technological components including smart phones, flash drives, digital cameras, and D-memory. Needless to say, supply chain disruptions are not exclusive to Asia. The political turmoil in the Middle East and anxiety about the euro-zone also requires companies to re-think and develop contingency plans for everything from multi-source raw materials procurement to spare parts to finished goods. Diversifying vendors, suppliers and manufacturers while maintaining fuller inventories has never been more vital than in today’s unpredictable world. The more complex (and lengthier) the supply chain, the greater the vulnerabilities. Mexico manufacturing reduces risks for companies with both outsourced and real estate contingencies should supply chain disruptions occur.