4 Myths About Sourcing Manufacturing From Mexico

With so much discussion about NAFTA and changes to trade, manufacturing in Mexico is under some scrutiny. There are many myths and misunderstandings about manufacturing in Mexico. In this article, we debunk four misconceptions for those considering a Mexican plant as part of their supply chain.

Myth #1 – Manufacturing In Mexico Hurts US Workers

First, while it’s true that some US manufacturers have moved from the US to Mexico, one of the main reasons that they’ve done so is to reduce production costs. Lower production costs lead to lower pricing, which leads to US consumers getting more value for their dollar. So, while some US workers suffer, others benefit.

Basically, it’s more accurate to say that “Mexican manufacturing hurts some US workers and helps many more US consumers.” When US citizens can afford to purchase goods, it helps the US economy.

Myth #2 – Goods Purchased From Mexican Manufacturers Only Benefits Mexican Workers And Companies

A very basic analysis of US trade with Mexico might lead one to conclude that buying goods from Mexico is “sending money out” that never comes back. While this analysis is understandable, it is incorrect.

In fact, approximately 40 cents of each dollar spent on Mexico-based manufacturing comes right back to the United States. That’s because most Mexican companies buy equipment, machinery, raw materials, services, etc. from US companies. As the LA Times article explains:

Around 40 cents of every dollar that the United States imports from Mexico comes from the U.S., compared with just 4 cents of every dollar in Chinese imports, according to the Woodrow Wilson Center…“Instead of thinking of Mexico as a separate part of production, it’s now part of our manufacturing process,” said Raymond Robertson, an economist at Texas A&M University. “Mexican companies aren’t just producing products that rival ours, they are producing parts of our products.”

Manufacturing in Mexico is most often part of a bilateral trade system. Consider these quick facts:

• Some US-made steel is purchased and shipped to our plant to use in manufacturing. This helps sustain US suppliers
• The steel used may be created from iron from US mines, and this sustains US mining jobs.
• Some auto parts and assemblies are made here then shipped to plants in the U.S. to be attached to a larger part of the car or have other finishing work completed. In fact, American truck fleets do some of this back-and-forth shipping.

The truth is, Mexico and US economics are mutually supportive through trade, combined manufacturing efforts, and direct foreign investments.

Myth #3 – Mexican Manufacturing Companies Are Slow To Respond To Emails And Phone Calls

Since most manufacturers in Mexico have worked with other countries since at least the NAFTA agreement was signed, they are familiar with doing global business. Respecting other cultures and practicing effective communication is valued in Mexico as it is in most of the world. At Intran, we have many bilingual employees and take a US-type approach to customer service. This means we answer phone calls and emails promptly.

Always feel free to ask a manufacturer these questions before contracting:

• On average, how long does it take to receive an email reply or return phone call?
• Who would be my point of contact when I run into a problem? What happens if that person isn’t available?
• What about when I have a question outside normal business hours? Who can I call?

Located in Morelos, Mexico, Intran is in the same time zone as Chicago, Dallas, and Winnipeg, so it’s easy to reach us during your business hours. Beyond email and phone conversations, our location makes it easy for clients to visit us. Flights from the US take only 1-6 hours, depending on your starting point and are cheaper than flights to Asia. We, like many manufacturers in Mexico, enjoy the opportunity to meet clients face-to-face.

Myth #4 – Manufacturing In Mexico Is Lower Quality Than Manufacturing Elsewhere

Since most manufacturers in Mexico hold some certifications earned from the International Organization for Standardization, they are required to meet the quality standards set forth. ISO certification requires audits of quality and performance. They’re a great tool for potential clients to vet manufacturers.

Intran’s ISO 9001:2008 means the methods and workflow processes used to produce goods are documented and reviewed to ensure high-quality products are consistently delivered to the client. If you’re considering a manufacturer in Mexico, ask for examples of quality problems that were overcome. This will offer insight into the company’s quality to commitment and culture.

Since Intran’s primary focus is auto parts manufacturing, we also hold an ISO-TS16949 certification. In conjunction with the ISO 9001:2008 certification, this means we meet the standards created by the global automotive industry and offer increased defect prevention and continual process improvements.

If you’re ready to consider a Mexican manufacturing partner, contact us today for a quote.