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Expanding Your Manufacturing Base

Fri, 11/09/2012 - 4:26pm | by monicadear

Producing your products in your own workshop is dependent upon your management abilities, your time constraints, and your facilities. At some point your product line will simply outgrow those dynamics, and that’s a good thing. You can expand, increasing volume without compromising quality, and still concentrate on your more limited lines produced in-house. When you come to this crossroad, you will have a variety of options for outsourcing your production.

Given the backlash against some mass-produced goods brought from overseas, many companies in the U.S. are choosing to look closer to home for cost-effective and high quality manufacturers. Mexico, for instance, is now the fifth largest outsourcing location for U.S. manufacturers. The cost of manufacturing products in Mexico is roughly 75% the cost of manufacturing in the U.S. As global trends have impacted North America, the quality of end products made in Mexico has increased. General Motors, Ford, and Chrysler all have assembly plants in Mexico, producing 11 percent of the automobiles sold in the U.S.

The benefits of choosing Mexico manufacturing versus China-based manufacturing are many, including cost, distance, and continuity.

  • While the cost of producing goods in China is low, the predicted rise in fuel costs will make it even more challenging to ship items back to the West Coast.
     
  • Proximity-wise, it is much more inexpensive and quicker to drop in on a facility in Mexico to check the quality and process.
     
  • In terms of cultural and language similarities, the United States and Mexico have a long standing history together (think of how much of the southwestern states used to be Mexico). A full 16% of the U.S. population is Hispanic/Latino. Anyone who lives in California, Nevada, New Mexico, Colorado, or Texas can probably speak some Spanish, so the connections are already well established.

For identifying your manufacturing base, consider political, legal, and financial trends, then make a decision that helps with your company's bottom line. Do a search on "manufacturers alliance" in your state to get a sense of updated resources and groups to help with your choice.

Photo by http://www.flickr.com/photos/wordtotheschweiz/4899116025/sizes/m/in/phot...

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