Whitepaper: Are You Ready for the Next Crisis Around the Corner?
In the wake of the Coronavirus pandemic, manufacturers face unavoidable supply chain disruptions. While Covid was an unprecedented emergency, more crises are sure to come. The ramifications of the virus have reinforced a valuable lesson — operational diversification is no longer just a “nice to have;” it’s a necessity.
Our Crisis in Manufacturing whitepaper reveals:
- The importance of a diversified production footprint to mitigate crises
- Traditional and new-age risks manufacturers face in a globalized production era
- How Mexico can serve manufacturers as a complementary production region
Download “Are You Ready for the Next Crisis Around the Corner?” to learn about the risks that manufacturers face and how a diversified operational footprint can help mitigate the next devastating crisis on the horizon.
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Manufacturers have kept pace with today’s globalized economy, often shifting production to Asia where manufacturing is more cost-competitive than in the US, Canada or Europe.
At the same time, this approach has also left companies more vulnerable to a host of new risks that occur on the other side of the world. Manufacturers have always had to plan contingencies for disruptions in their production, such as factory fires or strikes. However, the risks that come hand-in-hand with the benefits of outsourced production half a world away are more complex, harder to anticipate, and require a different strategic approach.
In recent decades, companies relying heavily or exclusively on production in Asia (particularly China) have faced a raft of new threats not present in previous generations: including geopolitical unrest, currency fluctuations and the ramifications of global warming. In 2019, 69 percent of manufacturers felt the ramifications of tariffs brought on by global trade wars.
The Coronavirus in 2020 was another stark reminder to many manufacturers that a more diverse operational footprint is a strong risk mitigant. In a July 2020 survey, 59 percent of global manufacturing leaders reported that geographic diversification is the best way to prevent future supply chain disruptions. Through multiple production locations, companies have the agility they need to adapt to a sweeping number of manufacturing crises.
As this paper details, Mexico is a leading contender for manufacturers seeking an alternative, or supplementary, production location. Its abundant and educated labor force and cost-competitive operating costs are attractive for companies seeking more operational diversity. The country’s adaptive currency and track record for recovery after a crisis offers companies reassurance in the face of future unknown risks. And the country’s proximity and strong trade relationship with two of the world’s largest economies has offered optimistic avenues for growth to businesses that have already made the move to Mexico.
There may not be a crisis like the Coronavirus pandemic again in our lifetime, but there will be future disruptions that will affect production at a global scale. It is important companies build contingency plans now to ensure a favorable position in the future.