As global shipping costs and tensions between the United States and China rise, many companies are considering moving manufacturing operations to Mexico. Mexico continues to grow its manufacturing capabilities, making this country an excellent choice for a variety of industries. Whether you’re preparing to launch a new brand or pondering nearshoring, we’re here to help you determine the key differences about Mexico vs. China manufacturing:
Plan For the Transition to Take About a Year
If you’ll be nearshoring, it’s important to have a realistic timeline before getting started. Moving manufacturing operations from China to Mexico requires strategic planning and isn’t something that can be accomplished in a matter of weeks. For best results, expect the move to take about a year. It’s helpful to have a strong inventory management system in place before you begin the transition, so you’ll have a solid understanding of how long the process will take.
Understanding Mexico’s Strengths
If you’re considering nearshoring, Mexico (and especially the border region) should be on your radar. Here are the top reasons that major brands have made the transition, and why more are on the way:
- We have a strong labor force. If your project is high volume and requires consistency, then Mexico may be an excellent fit.
- Lead times are exceptional. Because of our proximity to the United States, shorter lead times are often cited as the top reason for nearshoring. This is especially true since the COVID-19 pandemic (we all remember the long waits for shipping).
- Shipping costs are lower. Another strategic reason to choose Mexico for your manufacturing needs is that shipping costs are lower than what you’ll find abroad. Shipping costs are lower because of our proximity to the U.S., and import duties typically aren’t charged. We also have strong ties to the United States and are part of the United States-Mexico-Canada Agreement (USMCA), so qualifying goods are free of tariffs.
Consider Your Brand’s Needs
China remains the world’s number one manufacturing hub, and there are certain things this country does exceptionally well. When deciding whether to manufacture in Mexico or China, consider the following:
- Is low cost your top priority? China’s labor costs for low labor/high machined parts are typically the lowest you’ll find. If keeping costs low is more important than quality or location at this point in time, China may be your best bet.
- How involved would you like to be? China’s location abroad poses a challenge if you plan to be highly involved with the manufacturing process. However, for those who prefer a hands-off approach, there’s no problem with choosing China.
- Are you producing sewn items for retail at a low cost? If so, then China may be a good fit. China excels at producing sewn items, which are not as prevalent here in Mexico.
If you’re in the process of weighing Mexico vs. China manufacturing for your brand, we’re here to help you make the best decision. Both countries have undeniable strengths, but what’s right for your business depends upon many factors–such as the type of products you’re manufacturing, your desired budget and lead times, and your ideal level of involvement. The CaliBaja team has decades of experience in contract manufacturing and have built a team that we’re proud of. We’d love to learn more about your project, so please contact us for a consultation.
