Manufacturing in Mexico: The Benefits of Supply Chain Resilience

manufacturing

In a world of global manufacturing where disruptions have become the norm rather than the exception, supply chain resilience has emerged as a critical factor for businesses looking to thrive in the manufacturing industry. One region that has proven itself as a haven for building resilient supply chains is Mexico.

In this blog, we’ll explore the key benefits of manufacturing in Mexico and how it contributes to supply chain resilience.

The New Era of Global Supply Chains and their Challenges

Thanks to changes in supply chains, manufacturing processes have become especially vulnerable to disruptions in recent years. The COVID-19 pandemic exposed the fragility of many global manufacturers and their supply chains, with disruptions ranging from factory closures and cross border transportation delays to shortages of critical components.

Natural disasters, geopolitical tensions, and trade policy shifts further underscore the need for supply chain resilience.

Mexico’s Strategic Location Creates a Competitive Advantage

Mexico’s geographical proximity to North American markets makes it an ideal manufacturing location for manufacturers seeking to build resilient supply chains.

With efficient transportation links and just-in-time manufacturing capabilities, Mexico offers quicker response times to changing market conditions.

Reduced Transportation Costs

manufacturing

Manufacturing in Mexico reduces transportation costs significantly. Shipping raw materials across oceans to North American manufacturers can be costly and time-consuming.

By establishing production facilities in Mexico, companies can enjoy cost savings on both shipping expenses and transit times, leading to a more agile and cost-effective supply chain.

Skilled Workforce

Mexico boasts a well-trained and skilled workforce in various industries, including automotive, aerospace, electronics, and medical devices.

Access to this skilled labor pool allows for high-quality production and rapid adaptation to changing product demands while still saving on manufacturing costs, further enhancing supply chain resilience.

Trade Agreements and Tariff Benefits

Mexico’s strategic trade agreements, such as the United States-Mexico-Canada Agreement (USMCA), provide manufacturers with tariff benefits and preferential access to key markets.

This reduces trade risks and enhances cost-efficiency, critical components of a resilient supply chain.

Diversification of Suppliers

manufacturing

Manufacturing in Mexico allows companies to diversify their supplier base.

By having manufacturing operations in multiple regions, businesses can mitigate risks associated with localized disruptions and dependencies on a single source.

Agility and Responsiveness

One of the most significant advantages of manufacturing in Mexico is the ability to respond quickly to market changes.

With shorter lead times and simplified logistics, manufacturers can adjust production volumes and product offerings on the fly, ensuring they remain responsive to consumer demands.

Mexico Manufacturing FAQs:

What are the major manufacturing industries in Mexico?

A few of the major manufacturing industries in Mexico include automotive manufacturing, aerospace and defense, electronics and electrical appliances, medical devices, and food processing.

What’s Mexico’s reputation in manufacturing?

Mexico has gained a solid reputation in manufacturing for its skilled workforce, strategic geographical location, and robust manufacturing capabilities. It is a favored destination for industries like automotive, aerospace, electronics, and medical devices due to its proximity to major markets, competitive labor costs, and strong supply chain connections.

In addition, the Mexican government participation in trade agreements like the United States-Mexico-Canada Agreement (USMCA) enhances its appeal as a reliable and cost-effective manufacturing hub.

Is manufacturing in Mexico safe?

Manufacturing in Mexico is generally considered safe, but like any other location, precautions should be taken when setting up manufacturing operations. Companies operating there should be aware of security issues in specific regions and take measures to protect their personnel and assets.

Additionally, it’s important to stay informed about local regulations and labor laws to ensure compliance and maintain a safe working environment. Overall, with proper planning and vigilance, manufacturing in Mexico can be conducted very safely and successfully.

Nearshore Your Process with Mexican Manufacturing

In an era of unprecedented supply chain challenges, manufacturing in Mexico stands out as a strategic choice for building supply chain resilience. Its proximity to major markets, skilled workforce, cost advantages, and trade agreements make it a prime location for companies aiming to fortify their supply chains against disruptions.

By considering Mexico as a manufacturing hub, businesses can not only enhance their ability to weather supply chain disruptions but also position themselves for long-term success in today’s dynamic business environment.

BF&S Manufacturing

If you’re looking to elevate your contract manufacturing experience, look no further than BF&S Contract Manufacturers. We are dedicated to excellence and specialize in providing shelter services, allowing businesses to flourish without the stress of hefty investments or undue risks.

At BF&S, we specialize in:

  • Aerospace
  • Medical
  • Industrial
  • Military Manufacturing

BF&S is your trusted ally in enhancing global competitiveness right from the heart of Mexico. Discover more about our transformative solutions by visiting our website. Your path to manufacturing excellence starts right here.

How Contract Manufacturing in Mexico is Driving Global Competition

The global manufacturing landscape has witnessed a significant shift in recent years, with Mexico emerging as a key player in contract manufacturing.

contract manufacturing

This trend has not only transformed Mexico’s economy but has also driven global competition to new heights. Contract manufacturing, where a company outsources the production of its goods to a specialized third-party manufacturer, has become a strategic choice for businesses seeking cost-effective solutions, reduced lead times, and increased efficiency.

Mexico’s rise in contract manufacturing has been a game-changer, reshaping how businesses operate globally.

The Mexican Advantage: Proximity and Trade Agreements

One of the primary drivers of Mexico’s success in manufacturing industries is its geographic proximity to major consumer markets, especially the United States, compared to other foreign companies.

This proximity reduces transportation costs, shorter lead times, and improved supply chain efficiency.

With the implementation of the United States-Mexico-Canada Agreement (USMCA) – replacing NAFTA – cross-border trade has become even smoother, fostering a favorable environment for companies to utilize a Mexico based contract manufacturer.

Additionally, Mexico boasts a network of free trade agreements (FTAs) with more than 50 countries, giving manufacturers located in the country preferential access to numerous markets worldwide, and ultimately, cost savings for their clients.

This extensive web of FTAs enhances Mexico’s attractiveness as a manufacturing hub and positions it as a gateway for companies to tap into diverse global supply chains.

Cost Efficiency and Skilled Labor for Manufacturing Operations

manufacturers vs contract manufacturers

Mexico’s labor costs remain a critical factor in contract manufacturing decisions. Thanks to the country’s investment in specialized training programs over the last decade, Mexico can now provide a skilled labor force at relatively lower labor costs compared to developed nations.

This combination of skilled labor and cost-effectiveness has led to an influx of foreign direct investment, particularly in the automotive, electronics, aerospace, and medical device sectors.

Skilled engineers, technicians, and workers contribute to the successful execution of complex manufacturing processes. Mexico’s investment in education and training programs ensures a steady supply of skilled labor, making it an attractive destination for companies seeking high-quality production at competitive prices.

Technology and Infrastructure Suited for Manufacturing Operations

Mexico’s commitment to modernizing its infrastructure and adopting cutting-edge technology has further propelled its role in contract manufacturing. The country has invested significantly in improving transportation networks, including highways, railways, and ports, facilitating the movement of goods both domestically and internationally.

Furthermore, the rise of Industry 4.0 and the Internet of Things (IoT) has not bypassed Mexico. Manufacturers in the country are increasingly integrating advanced automation, robotics, and data analytics into their processes, enhancing production efficiency and product quality.

This technological evolution aligns well with the demands of global markets and positions Mexico as a forward-looking manufacturing partner.

Collaboration and Innovation

Collaboration between businesses within Mexico and internationally has become a hallmark of the country’s contract manufacturing landscape. International companies are establishing joint ventures or partnering with local manufacturers to tap into their expertise and gain insights into the local market dynamics.

This collaborative approach drives innovation, fosters knowledge transfer, and produces higher-value products.

Challenges and Future Outlook

While Mexico’s contract manufacturing sector is thriving, challenges remain. Security concerns, intellectual property protection, and fluctuations in global demand and trade policies can impact the industry.

contract manufacturing

However, Mexico’s willingness to address these challenges head-on and its resilient manufacturing ecosystem position the country to navigate these obstacles successfully.

Looking ahead, the future of contract manufacturing in Mexico appears promising. As companies continue to seek ways to optimize their supply chains, reduce costs, and remain competitive, Mexico’s strategic advantages will likely maintain its pivotal role in driving global competition.

With a commitment to innovation, a skilled labor force, favorable trade agreements, and a forward-looking approach to technology, Mexico is poised to shape the future of contract manufacturing on a global scale.

Elevating Global Competition: BF&S Contract Manufacturers in Mexico

Consider BF&S and your contract manufacturing partner. When it comes to unlocking the true potential of contract manufacturing, BF&S shines as a guiding light in Mexico’s dynamic landscape.

BF&S Contract Manufacturers have redefined the way businesses approach production – offering an unparalleled commitment to detail and a seamless journey from concept to completion.

At BF&S, we don’t just offer contract manufacturing; we provide a comprehensive shelter solution that empowers our clients with end-to-end control over quality and production. Our clients reap the rewards of our seasoned team’s expertise and our deep understanding of the local market.

This unique advantage eliminates the need for substantial investments in physical infrastructure and human resources, enabling businesses to focus on what truly matters.

Our shelter services grant clients the ability to swiftly initiate operations without establishing a legal presence in Mexico. We act as a protective shield, safeguarding our customers from an array of risks and liabilities.

This approach not only ensures a smooth and risk-free entry into the Mexican market but also instills confidence in the journey ahead.

BF&S takes on tasks and functions that extend beyond the core manufacturing process. By doing so, we liberate our clients to channel their efforts into areas that directly impact their profitability and growth. This strategic alignment allows businesses to stay agile, efficient, and primed for innovation.

Industries We Empower:

Aerospace Manufacturing:

Navigating the intricate world of the aerospace industry demands precision and expertise. BF&S stands as a partner that understands the intricacies of this sector, supporting clients in achieving excellence and compliance.

Medical Manufacturing:

The medical manufacturing industry demands unwavering precision and uncompromising quality. BF&S takes pride in facilitating this critical sector, ensuring that life-saving medical devices and products reach those who need them most.

Military Manufacturing:

When it comes to military manufacturing, there is no room for error. BF&S rises to the challenge, providing a reliable foundation for defense-focused production, where precision and reliability are of paramount importance.

Elevate Your Expectations

For those seeking to transform their contract manufacturing journey, BF&S Contract Manufacturers stand as a beacon of excellence. Our unwavering commitment to detail, combined with our expertise in shelter services, paves the way for businesses to thrive without the burdens of excessive investment or unnecessary risk.

With a focus on aerospace, medical, and military manufacturing, BF&S is your partner in driving global competition from the heart of Mexico. Explore more about our transformative solutions by visiting our website. Your journey towards manufacturing excellence begins here.

Manufacturer VS Contract Manufacturer

manufacturing facility

What’s the difference between working with a traditional manufacturer through private label manufacturing versus a contract manufacturer? Private label manufacturing refers to taking an existing product from a manufacturing facility and applying a company’s brand name to it.

On the other hand, contract manufacturing allows a company more control over the end product. While working under a private label leaves no room for adjustments to the product, working with a contract manufacturer lends itself to more personalization and control over the course of production.

What is Included in Contract Manufacturing Services?

In contract manufacturing, a company can utilize a third-party manufacturer to be involved in the production process as little or as much as they see fit. From choosing the raw materials to having the final say on design, companies utilizing contract manufacturing can participate in every aspect of product development.

While private label products may seem like the easier choice, private labeling often comes with a higher price tag than working with a contract manufacturer in which the company controls the costs of materials purchased and overall product quality.

What is it like to Work with Contract Manufacturers in Mexico?

manufacturers vs contract manufacturers

With increasing supply chains, intellectual property, and trade agreement issues, more companies are looking outside China to fulfill their manufacturing needs. Thankfully, Mexico offers a preferred alternative with competitive labor costs closer to home. Mexico has preferable trade agreements with the United States and has been focused on training its labor force in the advanced skills necessary to excel in the manufacturing industry.

Working with a manufacturer in Mexico on a contract basis allows a company to take advantage of the benefits of outsourcing without the risks of Chinese manufacturing. Much like working with a hiring firm, contracting with a manufacturer allows you to get the best people for your specific project, all while maintaining total control over the final product.

Contract manufacturing with a trusted outside company is an excellent option for a company aiming to scale its product and serve multiple customers.

People Also Ask:

What is Toll Manufacturing?

Toll manufacturing is the outsourcing of all or part of a production to a third-party company where the hiring company provides all the raw materials or semi-finished products. 

What Does a Contract Manufacturer do?

In short, contract manufacturers create, manufacture, and assemble products for other companies.

What is the Advantage of Using a Contract Manufacturer?

As discussed above, the advantage of using a contract manufacturer is maintaining control over production while enjoying the benefits of outsourcing, including stability and budget adherence.

BF&S Contract Manufacturers

Manufacturer vs Contract Manufacturer

BF&S Mexican contract manufacturing delivers unparalleled attention to detail and delivery from concept to completion. With BF&S’ complete shelter services, clients fully control their quality and production. Clients benefit from the experience of the BF&S staff, as well as their knowledge of the local market, eliminating the need to make sizable investments in physical and human assets.

BF&S customers can initiate operations quickly without establishing a legal presence in Mexico. BF&S “shelters” our customers from many risks and liabilities.

BF&S performs these tasks and functions that are not core to the manufacturing process, allowing our clients to focus on those areas that affect their profitability and growth.

Learn more by continuing to explore our website.

Medical Device Manufacturing

medical device manufacturing

The medical device manufacturing industry covers the production of implants, surgical instruments, and equipment intended for therapeutics, monitoring and diagnostics.

These include reconstructive devices such as hip replacements and spinal devices, hearing aids, implantable monitors for cardiovascular devices, diabetic care, and a broad range of other devices.

Medical Device Manufacturing

Medical device manufacturing includes all aspects of the fabrication of a medical device, from designing manufacturing processes, to proof of concept, to the ability to upscale good manufacturing practices.

Quality systems are required every step of the way to ensure product quality and reliability in the medical field, including the ability to manufacture medical devices according to FDA regulations.

New technologies, such as 3D printing and additive manufacturing, have allowed for the creation of lighter, more complex designs. Specializing in machines for the additive manufacturing of metal parts.

The Process of Manufacturing Medical Devices with BF&S

medical items manufacturing

The medical device manufacturing process requires specific stages to be followed to ensure design control so that the product is both effective and safe for use. As a result, this covers the entire product development cycle, from medical device design to clinical trials, and premarket approval to manufacture.

Our integrated approach ensures unmatched, ultrafine precision and an end-to-end quality control system from start to finish. Streamlined medical manufacturing opens your doors for innovation without limits.

Gone are the days of worrying about dealing with the Chinese government. BF&S offers nearshore, full manufacturing services. We meet all standards and are ready to discuss your next manufacturing project. Our employees are highly skilled and our quality control is exceptional. additive manufacturing

BF&S Contract Manufacturers for the Medical Device Industry

medical equipment manufacturing

BF&S delivers on unparalleled attention to detail and delivery from concept to completion. With BF&S’ full shelter services, clients have full control of their quality and production. Clients benefit from the experience of the BF&S staff, as well as their knowledge of the local market; eliminating the need to make sizable investments in physical and human assets.

BF&S customers are able to initiate operations quickly without actually establishing a legal presence in Mexico. BF&S “shelters” our customers from many risks and liabilities.

BF&S performs these tasks and functions that are not core to the manufacturing process, allowing our clients to focus on those areas that affect their profitability and growth.

Other Industries We Serve:

  • Aerospace Manufacturing
  • Industrial Manufacturing
  • Military Manufacturing

Learn more by continuing to explore our website.

Printed Circuit Board Tape

What is a Printed Circuit Board?

printed circuit board

Printed circuit boards, abbreviated as PCBs, are the foundational building block for most electronics manufacturing.  A high-density, high-speed circuit board may be used in supercomputers and servers. Printed circuit boards are the foundation on which all other electronic products are assembled.

PCBs have mechanical and electrical components that make them ideal for electronic applications.  Most PCBs manufactured are rigid, but some PCBs are flexible, allowing the circuits to be bent and folded into shape without any break in the circuits.  These flexible PCBs comprise roughly 10% of the market. 

A small subset of these types of circuits is called rigid-flex circuits, where one part of the board is rigid and one or more parts are flexible, providing the advantages of flexible circuits listed above.

What are PCBs made of?

printed circuit board

Typically, PCBs are made from non-substrate materials with layers of copper circuitry. PCBs can be single-sided (one copper layer), double-sided (two copper layers on both sides of one substrate layer), or multi-layer (outer and inner layers of copper, alternating with layers of the substrate). A multi-layer PCB allows for much higher component density because circuit traces on the inner layers would otherwise take up surface space between components.

PCBs are also typically comprised of bonding and protective elements, such as rubber adhesive, polyimide film, polyester film, or blended silicone to help the board withstand high temperature and a variety of other stressors.

The rise in popularity of multilayer PCBs with more than two, and especially with more than four, copper planes was concurrent with the adoption of surface mount technology. However, having a multilayer printed circuit board makes the repair, analysis, and field modification of circuits much more difficult and often impractical.

Wave Soldering Process

Wave soldering is a bulk soldering process used for the manufacturing of printed circuit boards. The circuit board is passed over a pan of high temperature, molten solder in which a pump produces an upwelling of solder that looks like a standing wave. As the circuit board makes contact with this wave, the components become soldered to the board.

Wave soldering is used for both through-hole printed circuit assemblies and surface mounts. In the latter case, the components are glued onto the surface of a printed circuit board by placement equipment, before being run through high-temperature applications like the molten solder wave. Wave soldering is mainly used in the soldering of through-hole components.

As through-hole components have been largely replaced by surface mount components, wave soldering has been supplanted by reflow soldering methods in many large-scale electronics applications. However, there is still significant wave soldering where surface-mount technology is unavailable or not suitable, such as with the assembly of large power devices.

Why Mask a Printed Circuit Board?

Printed circuit boards have connectors, test sites, and pins where electrical continuity needs to be maintained, which means conformal coating can not be applied to those specific points.  There are also other points of a board that needs to be masked, such as unsealed components (like relays or open inductors), through holes, and even LED surfaces where light output may be impacted by the coating.

Masking tape for a Printed Circuit Board

printed circuit board lab

Low-ESD Polyimide Tape

The ideal tape for masking printed circuit boards is the low ESD (Electrostatic Discharge) polyimide tape. The low ESD function reduces the discharge of electroplating static upon the tape’s removal. Low ESD polyimide also adheres strongly without leaving behind residue on the gold fingers or other components of the circuit board.

Crepe Masking Tape

Another great option for printed circuit board tape is crepe masking tape. It has the lowest price and less risk of static damage compared to polyester tapes. The drawback to this option is that it’s not as flexible as polyimide, so won’t conform as well. An additional benefit of crepe tape is that it uses a rubber-based adhesive instead of silicone, helping reduce the rise of silicone residue remaining on the board.

Polyimide Tapes

Another very popular and effective choice for masking printed circuit boards is standard polyimide tape. Polyimide tape is flexible, doesn’t leave behind any residue, has very high-heat resistance, and comes in a variety of different sizes. 

PCB Masking with BF&S

printed circuit board manufacturing

End your search for PCB masking with BF&S. BF&S services the Aerospace, Medical, Military, and Industrial fields with the manufacturing process and parts they need with an unmatched standard of quality and reliability.

Founded in 1988, BF&S has decades of experience manufacturing in Mexico, with over 500 employees in the state of Sonora. Our warehousing and corporate offices are located in Douglas and we are incorporated in the state of Arizona. The BF&S executive team was born and raised in the United States and runs our organization with U.S management standards and practices.

Learn more by continuing to explore our website.

Mexico Contract Manufacturing – The Benefits

In 2018, Mexico imported $371.9 billion worth of goods into the U.S. Manufacturing imports included vehicle components; agricultural products; medical instruments; and much more. Each year, more companies choose contract manufacturing in Mexico as the solution to their supply chain needs. Despite this growth, you may wonder if moving your operations to a new country is worth the investment. Before we can determine if contract manufacturing in Mexico is the best solution for your company’s needs, it is important to look at the competition.  

The Elephant in the Room

Mexico Contract Manufacturing - Mexico Versus ChinaWe cannot talk about contract manufacturing in Mexico without addressing the elephant in the room — China. In 1973, the United States and China began a lucrative contract manufacturing trade arrangement that lasted for over forty years. In 2018, the U.S. took steps to change its contract. The U.S. placed 25% tariffs on $50 billion worth of Chinese imports. These hefty tariffs signaled the start of a “trade war” between China and the U.S. Companies on both sides of the divide continue to struggle under the tariffs. The challenge now facing North American-based companies is how to find high-quality, low-cost alternatives to their current contract manufacturing partners. To answer those concerns, here are 10 benefits to moving your contract manufacturing operations to Mexico.

Top 10 Benefits to Contract Manufacturing in Mexico

  • Lower Labor Costs
  • Reduced Shipping Costs
  • Fewer Delays Through U.S. Ports of Entry
  • Other Financial Perks 
  • Mexico Is a Safe Place to Work
  • Superior Production Quality
  • Contract Manufacturing Shelter Companies
  • Safe Working Conditions
  • Outsourcing Creates U.S. Jobs
  • Lower Travel Expenses

Mexico Contract Manufacturing Benefit #1: Lower Labor Costs

Companies who move their contract manufacturing operations to Mexico have discovered significant labor cost savings. Studies suggest that labor expenses in Mexico are 40-50% lower than in the U.S. Even skilled laborers earn less in Mexico because the cost of living is so much lower than in America. In addition to initial savings, as wages in Mexico grow, evidence shows that productivity also increases. Companies who choose to enter into a contract manufacturing arrangement in Mexico keep labor expenses low while building revenue.

Benefit #2: Reduced Shipping Costs

Another benefit to contract manufacturing in Mexico is the proximity. As a contract manufacturer, lower shipping fees mean that both the company’s cash flow and its margins are protected. Mexico manufacturing means that the savings can go to your customers or your pocketbook. 

Benefit #3: Fewer Delays Through U. S. Ports of Entry

Nothing is worse than having an item stuck in Customs, especially if customers do not understand that some things are out of a company’s control. The logistics of transporting items through the Mexican ports are less complicated than other contract manufacturing options. Once again, this benefit ensures that not only does your supply chain flow smoothly, but your customers stay happy.

Benefit #4: Other Financial Perks

Contract manufacturers know that Mexico offers better exchange rates than other countries. Also, Mexico’s facilities try to use natural gas instead of electricity. Both measures reduce operational expenses.

Benefit #5: Mexico is a Safe Place to Work

The World Economic Forum recently released its annual crime report. The forum “measures the extent to which a country exposes tourists and businesses to security risks mainly related to serious harm to people (violence and terrorism).” According to this report, Mexico (53.31) is currently ranked near the U.S (47.7). Headlines about border violence are unsettling, but these reports are incomplete. The violence that dominates the headlines revolves around a few large cities. Legitimate businesses have never been targets of this violence. Manufacturing in Mexico, like other places, depends on creating a security-conscious environment. Those tools include surveillance cameras, gated entry points, and security personnel. 

Benefit #6: Superior Production Quality

For years, Mexico’s reputation for superior manufacturing has made it an industry leader. Mexico is now the leading producer of electronics due in part to its access to skilled labor. These positions are often difficult to fill in North American countries. 

By comparison, China often experiences quality issues with its products. The logistics associated with returning an item are often prohibitive and result in write-offs. These issues usually include shipping fees, distance, time involved, and language barriers. 

What Are the Products Manufactured in Mexico?

Mexico Contract Manufacturing - Made in Mexico Product Seal

  1. TV’s and Electronics
  2. Tools
  3. Candy
  4. Toothpaste
  5. Appliances
  6. NASA Jumpsuits
  7. Inks and Printers
  8. Aerospace Components
  9. Medical Devices and Supplies
  10. Fender Stratocaster (Strat) Guitars

Mexico Contract Manufacturing Benefit #7: Contract Manufacturing Shelter Companies

Foreign companies rely on contract manufacturing shelter companies to guide them through the transition. A shelter company focuses on the administrative and legal logistics of a business. At the same time, the foreign company focuses on its core goal: manufacturing. The production value of the product remains high while decreasing the operating costs. 

For over 50 years, Mexico’s shelter services have provided their global partners with protection from liability. This protection means that foreign companies are not vulnerable to Mexico’s legal system or taxation practices. Shelter companies simplify the process of moving an operation to Mexico. Providing a turnkey, start-up approach to manufacturing is only one of the perks. Under a shelter company, you also maintain all intellectual property rights for your products and services.

Mexico Contract Manufacturing Benefit #8: Safe Working Conditions

Conditions in Mexico manufacturing have improved over the years. Contract manufacturing companies in Mexico know they must meet global standards. They provide benefits for their employees, including medical, family leave, paid sick time. Labor unions advocate for safe working conditions and fair wages. Employee turnover is lower because they want to take advantage of the perks provided by reputable manufacturing partners in Mexico. 

Mexico Contract Manufacturing Benefit #9: Outsourcing Creates U.S. Jobs

Recent headlines have capitalized on the fear that moving manufacturing companies out of the U.S. is costing U.S jobs. Indeed, millions of U.S manufacturing jobs move overseas each year, but that isn’t the whole story. 

U.S manufacturers often choose to outsource lower-level work to Mexico or China. The reduction in costs means that there is more room in their budgets for skilled U.S-based workers. In some cases, lower-level jobs can also be challenging to fill in the U.S because of the higher cost of living in that country. In that event, manufactures find it necessary to outsource parts of their business.

Mexico Contract Manufacturing Benefit #10: Lower Travel Expenses

Mexico’s proximity to the U.S means you will reduce the cost of lengthy international travel. Your executives will be able to spend more time in their offices. When you can’t be on-site, a knowledgeable workforce will provide clear information.

By comparison, China’s distance can make it difficult to resolve issues. The time and expense involved can cut into the cost-savings you were hoping to achieve. Steep differences between time zones and languages can produce added expensive manufacturing delays. 

Building Your Business the Right Way

Mexico Contract Manufacturing - Building Your Business the Right WayDo you want to take advantage of these benefits? Mexico is fully capable of meeting your manufacturing needs. Manufacturing companies around the world have discovered the value of moving their operations to Mexico. Manufacturing in Mexico means you have fewer supply chain delays and more revenue to build your business. 

If you ask a contract manufacturer in Mexico, they will tell you that while there are many manufacturing solutions out there, none of them provide the same level of help, experience, and high-quality products as Mexico. Your company can start saving today.

Our company has over 40 years of manufacturing excellence. Our ongoing dedication to high-quality, low-cost manufacturing makes us a great shelter company. We understand the pressures facing the global manufacturing industry. We understand that you want to see the advantages of lower labor costs while taking advantage of increased production. We’re prepared to help you achieve these goals, and much more. Contact us for your FREE initial consultation today!

Get Your Free Initial Consultation Today!

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Mexico vs China Manufacturing

Mexico vs China ManufacturingMexico is the United States’ second-largest supplier of imported goods. In 2018, Mexico imported $371.9 billion worth of goods into the U.S. Manufacturing imports included vehicle components, agricultural products, medical instruments, and much more.

In 2019, the North American Free Trade Agreement (NAFTA) ended. The transition to the United States-Mexico-Canada Agreement (USMCA) presented manufacturers with new opportunities. The new trade agreement also raises many questions.

Should manufacturers still pursue manufacturing partnerships in Mexico? Is an overseas partner like China a better fit? In the decision between Mexico vs. China, who can provide the best value and support? BF&S Manufacturing understands these concerns. Our team knows that the decision to move your operations to a new country is not an easy one. We want to take the anxiety and guesswork out of the decision-making process. Our goal is to help you see the advantage in choosing to manufacture products in Mexico.

The best way to do this is to debunk seven common misconceptions about moving your company to Mexico.

Mexico vs China Manufacturing: Mexico Is More Expensive than China True or False?

False. For decades, China represented the most cost-effective way to manufacture goods. The low labor costs meant that companies could reap a 30-80% cost reduction in operating costs. Over the last decade, China’s wages and overseas shipping costs have increased. This increase has made labor costs in China comparable to labor costs in the United States.

In 2018, the United States took steps to place 25% tariffs on $50 billion worth of Chinese imports. These heavy tariffs signaled the start of a “trade war” between China and the United States. Companies on both sides of the divide continue to struggle under the expense.

The answer is clear. It is now less extensive to manufacture goods in Mexico. There are several components that contributed to this shift.

First, Mexico’s labor costs are 40-50% lower than in the U.S. Even skilled laborers earn less in Mexico. As wages in Mexico grow, evidence shows that productivity also increases. This ratio means companies can continue to keep loaded labor rates low while building revenue.

Another benefit to manufacturing in Mexico is the proximity between the two countries. Lower shipping costs mean companies do not have to pass the expense onto their customers. Also, the reduction in delivery times means companies can turn items faster. Both advantages keep the cost of doing business reasonable for all involved.

Mexico vs China Manufacturing: Mexico Isn’t a Safe Place to Do Business – True or False?

False. The World Economic Forum recently released its annual crime report. The forum “measures the extent to which a country exposes tourists and businesses to security risks mainly related to serious harm to people (violence and terrorism).” According to this report, Mexico (53.31) is currently ranked near the U.S. (47.7).

Headlines about border violence are unsettling, but these reports are incomplete. The violence that dominates the headlines revolves around a few large cities. Gang violence is a problem in many parts of the world. Legitimate businesses have never been targets of this violence.

Here in Agua Prieta, BF&S Manufacturing has not experienced any of the violence of other border towns. Our population of 100,000 prides itself on being a quiet, family-oriented community. We want to keep it that way.

Mexico vs China Manufacturing: The Production Quality in Mexico is Poorer than in China – True or False?

False. For years, Mexico’s reputation for quality manufacturing has made it an industry leader. Mexico is a hub for aerospace, automotive, and medical device manufacturing.

AS-9100D-Certified for Aerospace ManufacturingBF&S Manufacturing maintains an AS-9100D certification. This certification qualifies us to work on aerospace projects. To maintain our AS-9100D accreditation, we are required to maintain the highest standards in manufacturing. We meet those standards in both the materials we use and the assembly of the finished product. Our success depends on your success. We demand excellence of ourselves, so in turn, we can provide the best to our foreign partners.

By comparison, China often experiences quality issues with its products. The logistics associated with returning an item are often prohibitive and can result in write-offs. Some of the costly problems associated with China’s poor-quality control practices include shipping costs, manufacturing delays, time consumption, and limited access to English-speaking advocates at the China-based facility.

Mexico vs China Manufacturing: Mexico Is More Complicated than in China True or False?

False. Over the years, Mexico has proven to be a more reliable and transparent manufacturing partner than China. Foreign companies rely on Mexico for several reasons, including the ones listed below.

Shelter Companies: For over 50 years, Mexico’s shelter services have simplified the process of moving a foreign company’s operations to Mexico. Providing a turnkey, start-up approach to manufacturing is only one of the benefits. Under a shelter company, you maintain all intellectual property rights, and you are shielded from liability. This protection means that foreign companies are not vulnerable to Mexico’s legal system. In other words, a shelter company focuses on the administrative and legal logistics of a business, while a foreign company focuses on its core goal: manufacturing. The production value of the product remains high while decreasing the operating costs.

Sub-Contracting: Using a shelter company in Mexico is not a foreign company’s only option. Mexico provides excellent sub-contracting opportunities as well. By utilizing Mexico’s success as a sub-contractor, you can reap the benefits of Mexico’s skilled labor force while completing the bulk of the project in the United States. For example, BF&S Manufacturing’s quality certifications make us an ideal partner for sub-contracting products like wire harnesses and small electric motors.

Cultural Paradigm: When considering moving your operations to Mexico, it is essential to note that BF&S Manufacturing is a United States-based company. All contracts are made with a U.S. company and not with a foreign entity. Your legal options fall under U.S. law. We also use American-based management practices in all our Mexican-based manufacturing facilities. These standards serve as a familiar benchmark for U.S. executives and allow for a smooth transition from the United States to BF&S’s location in Mexico. BF&S Manufacturing’s status as one of the few manufacturers in Mexico that can offer bother sub-contracting and shelter company support makes us a great choice for your manufacturing needs.

Time and Location: Another crucial reason manufacturing in Mexico is less complicated than in China is time and distance. Mexico is in the same time zone as the United States. When you move your company’s operations to Mexico, you can reach one of the English-speaking management team members during your U.S.-based business hours. If you need to be on-site in a hurry, depending on the location of the U.S. office, an employee based in the U.S. can be on-site at the Mexico facility the same day.

Bilingual Partners: An unbeatable benefit to manufacturing in Mexico is that the majority of the engineers and managers at BF&S Manufacturing are bilingual. When you need to speak to someone at your manufacturing facility in Mexico, you can be assured that your needs are understood without requiring a translator. 

The Trouble with China

By comparison, the complexities of moving a manufacturing business overseas can be cumbersome and expensive. Manufactures are vulnerable to Chinese laws and taxation practices. Without a shelter company, manufactures have few allies in China if something goes wrong. In addition to the absence of legal protection, China utilizes its own management standards that are vastly different from the quality standards U.S.-based companies are accustomed to using. If you are considering moving your manufacturing operations to China, it is crucial that you understand that China’s worldview is fundamentally different from Western cultures. In China, the customer (you) isn’t always right. The lack of cohesiveness between the two mindsets can result in a breakdown of you getting your needs met.

Another setback is that Chinese manufacturing facilities do not hire multiple English-speaking employees. There is usually one translator available to work with your company. When you need to know what is happening at your plant or there is a production issue, you are limited to receiving information through a single source. To speak to the translator, you must be willing to work during Chinese business hours, and it can be challenging to convey your customers’ needs in a relevant way to your Chinese partners.

Also, it’s essential not to overlook the time difference between the two countries. For example, the 15-hour time difference between Arizona, USA and Wuhan, China could result in costly delays and losses for your company and the customers you wish to serve.

Once your product is prepared to ship from China, additional complications, such as what recently happened in the Suez Canal, are a constant threat. By comparison, the logistics of transporting items through Mexican ports of entry are less complex and historically have not been plagued with the type of delays China experiences.

Mexico vs China Manufacturing: Facilities and Working Conditions Are Worse in Mexico True or False?

False. Conditions in Mexico manufacturing facilities are comparable or better than conditions in the United States. Foreign manufacturing companies in Mexico know they must meet global standards. As a U.S.-based company, BF&S Manufacturing prides itself on caring for our employees by offering great benefits and safe working conditions.

BF&S Manufacturing Benefits PackageBF&S Manufacturing Benefits Package:

  • Full Medical Insurance Coverage
  • Paid Sick Leave
  • Paid Vacations
  • Family & Medical Leave
  • Housing Allowance
  • Retirement Benefits (401(k) Plans)
  • Performance Bonuses
  • Christmas (End-of-Year) Bonuses
  • Profit-Sharing
  • Employee Match-Saving Programs

By contrast, China is one of the top 10 worst countries for workers’ rights. News reports out of China continue to decry China’s slave-labor mentality. Even if their employees receive a 40-hour workweek, conditions can be brutal. Reports of nightmarish conditions, abuse, and sub-par benefits are not uncommon.

In the end, manufacturers need to examine the risk to their reputation in the global community. Labor conditions are often at the top of watchdog organizations’ hit list. Sacrificing human rights for labor costs could be detrimental in the long run.

Mexico vs China vs USA: Outsourcing Is Stealing American Jobs True or False?

False. Recent headlines have capitalized on the fear that moving operations out of the U.S. is costing U.S. jobs. It is true that millions of U.S. manufacturing jobs move to Mexico and China each year, but that isn’t the whole story.

United States manufacturers often choose to outsource lower-level work to Mexico or China. The cost-savings this represents makes the manufacture more competitive. The reduction in costs means that there is more room in their budgets for skilled U.S.-based workers. In some cases, lower-level jobs can also be difficult to fill in the U.S. because of a shortage of available workers. Even during economic downturns in the United States., U.S.-based employees, in general, have proven that they are not interested in filling lower-level or “menial” positions. In that event, manufactures find it necessary to outsource some of their manufacturing needs.

This doesn’t mean that only low-level jobs are moving to Mexico. Mexico’s access to a skilled workforce makes them a coveted destination for manufacturing.

Mexico vs China: Solving Manufacturing Problems in Mexico Is More Difficult than in China True or False?

False. Mexico’s proximity to the U.S. means traveling back and forth is cheaper and faster. Mexico is in the same time zone as the United States. When you want to see things for yourself, you can be on-site the same day, and you won’t have to worry about costly international travel. The time savings will allow your executives to spend more time in their offices and lower your operational expenses. When you can’t be on-site, your knowledgeable and bilingual management team will provide clear information. You will no longer have to wait for a translator or stay up all night to speak to someone in a different time zone.

By comparison, China’s distance can make it almost impossible to resolve issues. The time and expense involved can cut into the cost savings you were hoping to achieve. Steep differences between time zones and access to English-speaking partners in China can produce expensive manufacturing delays, resulting in a loss of consumer confidence in your company.

When a problem needs to be solved, you deserve the assurance that you are working with a manufacturing partner who understands your values and customers. Moving your manufacturing operations to Mexico will provide that assurance. 

Mexico Manufacturing or China Manufacturing: Who Will You Choose?

Mexico Manufacturing or China Manufacturing: Who Will You Choose?Manufacturing in Mexico doesn’t have to be a last resort. BF&S Manufacturing would like to help you learn more about why manufacturing in Mexico is superior to China’s manufacturing options.

Our U.S.-based company has over 40 years of manufacturing excellence. Our ongoing dedication to high-quality, efficient, and low-cost manufacturing makes us a great shelter company. Also, we are one of the only options in Mexico that can also offer sub-contracting services.

We believe that our success depends on our ability to earn the trust of our foreign partners. Our partnership with Aerospace and other high-profile companies proves that we have a reputation that cannot be matched anywhere else.

BF&S Manufacturing understands the pressures facing the global manufacturing industry. We want to help you take advantage of lower loaded labor rates while experiencing increased productivity and maintaining or exceeding your quality expectations. We’re prepared to help you achieve these goals, and much more.

Connect with Us

BF&S Manufacturing has over 40 years of manufacturing excellence. Our ongoing dedication to high-quality, low-cost manufacturing makes us a great shelter company. We understand the pressures facing the global manufacturing industry. We understand that you want to see the advantages of lower labor costs while taking advantage of increased production. We’re prepared to help you achieve these goals, and much more. Contact us for your FREE initial consultation today!

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