Manufacturing in Mexico
Many countries are known for manufacturing, but only Mexico can offer the following advantages to US companies:
#1. A short supply chain. It might seem obvious, but geography matters. A part that’s manufactured at our facility in Mexico can be trucked to the USA in as little as one day. Short supply chains and part travel times are inherently more efficient.
#2. Low cost transit. While it’s true that per-piece manufacturing costs can be lower in some Asian countries, there’s more to part costs than manufacturing. Shipping cargo halfway around the world isn’t exactly “cheap.” What’s more, these trans-oceanic shipping costs are likely to grow.
There’s also the fact that trans-oceanic shipping is generally only practical when ordering a container full of parts or components. Shipping from Mexico, on the other hand, can be done at smaller volumes (pallet-sized orders are no problem).
#3. We’re a short flight away. Here’s another obvious – yet important – benefit to working with a manufacturer in Mexico: It’s easy to come visit our facility. Whether you want to meet in person to discuss your next order, see our operation, or work with our team to review a production issue, it’s a quick flight to the same time zone. No visas, no red-eye flights and crippling jet lag, and no $3,000 business class airline tickets for you and your team.
#4. Our labor pool is highly skilled. Mexico’s steady growth in global manufacturing is very much a function of our skilled labor pool.
- Numerous aerospace and automotive manufacturers have (and are) establishing facilities in Mexico, both an indication of the general skill levels and also a driver of increasing skill attainment.
- Innovative public-private vocational and technical schools graduate tens of thousands of skilled technicians every year. From CNC machinists to mills to tool and die makers, the pool of skilled laborers in Mexico is constantly growing.
- Mexico has more engineering, manufacturing, and construction degrees per capita than most countries (including the United States – see article on Forbes.com).
At Intran, we’ve taken skilled labor a step further and invested in safety and skills training for all our employees, ensuring top-notch work.
#5. Globally competitive labor costs. In addition to Mexico’s large pool of highly skilled labor, our labor costs have grown fairly slowly over the last two decades. This is not at all the case in many other manufacturing countries, where labor rates have increased exponentially in recent years. According to Forbes, labor costs in Mexico are now about 20% lower than Chinese labor costs.
#6. A pro-business environment. Mexico’s economic policies and regulatory environment are very much pro-business. In terms of trade policy, Mexico is one of the most open countries in the world, with 12 free trade agreements with 44 countries. In terms of infrastructure, Mexico is committed to reliable and low cost electrical power, rail service, etc.
#7. Intellectual property is respected in Mexico. In terms of intellectual property law, Mexico is very much aligned with the laws and norms in the United States and Canada. The legal system in Mexico also consistently enforces intellectual property laws.
#8. Stability. US-based companies face few surprises or hidden costs when manufacturing in Mexico because Mexico’s maquila system has been around for 45 years. Plus, Mexico has a long history of transparency, democratic values, and regulations that are consistent.
#9. Socially responsible manufacturing. Mexican environmental and labor laws very much reflect the values of US and Canadian consumers. Companies that source parts and components from Mexico are far less likely to be singled out for unethical business practices than companies that source parts from China, for example.
#10. Everybody’s doing it! Last but not least, hundreds of Fortune 1000 companies have opened (or are building) manufacturing operations in Mexico in the last decade. The reason? All of the above.