Transitioning Your Manufacturing Operations to Mexico
Shelter Operations in Mexico can ease the transition and allow companies to transfer manufacturing to Mexico. There are numerous types of user-cases of companies looking to move all or part of their manufacturing to Mexico. The first is the large multinational, which may have numerous manufacturing plants set up in multiple locations worldwide. For companies of this size, Mexico represents a very attractive option for an additional manufacturing base in North America.
In other words, for companies of this size, it’s not an “either-or” scenario: “China OR Mexico.” It’s an “in addition to” scenario: “China AND Mexico.” There are numerous reasons beyond the scope of this article why manufacturing in Mexico is desirable – including proximity to the US market, affordable labor, a highly educated workforce and a stable currency (a compelling article that goes into greater depth about why manufacturing in Mexico is attractive was recently published by Area Development).
For big, global companies manufacturing in Mexico – companies like General Motors, Volkswagen, Bombardier Aerospace, Motorola, General Electric, Sony, John Deere and others – meant setting up shop wholesale in the country, in complement to existing manufacturing centers in China, India, Brazil or elsewhere. Those companies are big enough to set up their own complete manufacturing operation on their own, able to realize economies of scale and benefit quickly from a manufacturing presence in Mexico.
For smaller companies, it’s a different story. Small- to mid-size firms like Axiom, Bowles Fluidics, Electrex or Westbrook Manufacturing approach manufacturing in Mexico in a different way. These firms opt for a turnkey approach via a sheltered services provider like Entrada, allowing them to avoid the hassles, cost and delay of establishing manufacturing in Mexico on their own.
These midsize companies can lower their overall manufacturing costs by setting up shop in a shared facility that includes other tenants and is run wholesale by an experienced provider that oversees the logistics of opening operations, develops supply chain services, hires and trains staff, oversees assembly, manages inspection and material acquisition and much more. Companies with as few as twenty employees can realize benefits of offshoring all or part of their manufacturing to a shared services facility in Mexico, remaining confident they can still produce high-quality goods at a lower cost.