The Mexico Sourcing Option: Questions to Ask

Before Spend Matters and MetalMiner joined forces to build a joint publishing firm focused on opinion, research, and insight in the procurement and supply chain sectors, we had a metals consultancy practice that did quite a bit of early work in the global sourcing and re-shoring areas (including moving spend from China to Mexico long before the phrase “re”-shoring became mainstream). Someone on our team even owns a nifty bulletproof leather jacket that she purchased for trips to the battle zone of Reynosa (which, during the height of violence a few years ago, saw more weekly murders than battle deaths in Afghanistan at the time).

While violence has subsided in the region, the level of commerce and sourcing activity from Mexico continues to increase. Recently I came across an article in Supply and Demand Chain Executive that highlighted a number of useful recommendations. I quote a few below:

  • “The benefits of nearshoring are most evident when a company’s customers have high demand that can be met within a short amount of time.”
  • “Utilize ‘shelter programs’ when doing business globally to mitigate liabilities, workforce issues, HR-related matters, etc.”
  • “Find the right plant manager at all costs when expanding globally.”
  • “Protect your companies in new global regions not just physically but intellectually via a number of strategies and sources—don’t rely on one method.”
  • “Establish your inventory tracking strategy immediately to avoid potential fines.”

In comparison to Mexico, the US manufacturing re-shoring equation can tilt the scales in its favor in cases where small production runs and short lead times take priority over standard production runs and larger volumes. Machined parts are a good example of a category where the US can often prove more attractive than Mexico, depending on sourcing criteria. We encourage Spend Matters readers to learn more about the re-shoring equation during the Commodity/PROcurement Edge conference taking place this fall.

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