Mexico making a comeback
Jim Carbone, Executive Editor - Electronics -- Purchasing, 9/30/2004 11:51:00 AM
Mexico, which lost a lot of low-cost manufacturing to China over the past several years, is attracting more medium to high-tech equipment manufacturing. In addition, some high-volume equipment manufacturing is moving back to Mexico.
Eric Miscoll, chief operating officer for Technology Forecasters, an electronics outsourcing market research firm, says Mexico is manufacturing more automotive systems, industrial controls and aerospace equipment. In addition, there is also set-top box manufacturing in Mexico, which tends to be higher volume product. “Some companies that moved manufacturing to China have moved back to Mexico. They realized it is a good idea to keep these things closer to home,” says Miscoll. A healthy diverse manufacturing base in Mexico is good news for buyers involved in outsourcing decisions because it gives them options on where to manufacture. However, often there are no hard and fast rules of which products should be manufactured where. Each product has to be evaluated on a case-by-cases basis. However, there are some guidelines. “If the weight is high versus the value and volume, or if demand is extremely unpredictable and short delivery times are required, then there is a stronger case for manufacturing close to customers,” says Kevin Sachs, vice president of strategic marketing for electronics manufacturing services provider Solectron. “If the product has a high value-to-weight ratio and demand is predictable, the product can be manufactured in a far-off geography, he says. Total cost of ownership criteria should be used in determining where a product should be manufactured. Criteria should take into account unit manufacturing cost, quality, leadtimes, value and weight of the product, predictability of demand and inventory carrying costs among others. See story in Oct. 21 issue.
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