Benefits of a Nearshore Location
Benefits of a Nearshore Manufacturing Location
Outsourcing is a time-tested way for companies to supplement their personnel with additional workers, reduce labor costs and to tap into new skills. However, outsourcing your manufacturing to distant countries, such as China or other Asian locations can come with many hidden drawbacks and charges that can minimize the savings. A poll run by the outsourcing company Ventoro found that the average cost savings from outsourcing was less than 10 percent due to unexpected cost overruns and increasing wages in the Orient. For this reason, many companies are instead turning to nearsourcing in countries such as Mexico, which has many advantages over outsourcing.
Time Zones
One of the biggest pitfalls of outsourcing in far-flung countries is the time difference. A time zone difference of several hours can make it difficult for you to synch up your workday with the supervisors in charge of your manufacturing. This can lead to communication problems that reduce productivity and result in costly errors; simple errors can take more than 24 hours to fix because you have two teams working in near isolation. Manufacturing in Mexico, on the other hand, eliminates this logistical problem because Mexico shares the same timezones as the United States, so there’s minimal hassle in setting up meetings and problem solving. Nearshoring can also eliminate the need to have nightshifts in your operations, which can lead to burnout and employee turnover.
Proximity
There’s nothing like talking to someone face-to-face. Outsourcing can make this difficult, as long plane rides can make meetings complicated, forcing many companies to rely on phone calls or video-chats. Mexico, on the other hand, is relatively close to the United States and many locations can be reached in just a few hours. This makes it easier to actually sit down with your partners. An added benefit of this proximity is reduced shipping time, which minimizes the amount of time and money spent moving supplies and products around.
Business Environment
Part of the continued success of Mexico’s manufacturing industry is a hospitable business environment. Mexico has a strong respect for international intellectual property, patent and trademark rights that is not found in many outsourcing sites. This helps to minimize the risk of piracy and intellectual property theft. In addition, Mexico’s government has long encouraged the manufacturing industry with favorable tax rates and a stable infrastructure.
Mexico does not produce cheap consumer goods, but is instead focused on the manufacture of high quality items for industries such as: medical, aerospace, automotive, electronics, high end consumer products, safety and IT amongst others.
Mexican Labor Force
Mexico is home to a vast skilled labored force; in fact, Mexico has more students graduating from institutions of higher learning than the United States. This makes for an abundant supply of engineers, technicians and other trained workers that can be hired on-site, minimizing the number of employees that you have to send overseas. In addition, labor costs in Mexico are far less than those of the United States, enabling you to save money without compromising on quality.
