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Seven Benefits of Nearshoring in 2022: Cost-Effective

Stretching the almighty dollar is indeed an almighty challenge.

But, stated simply, as manufacturers, there are typically two ways to beef up the bottom line – sell more, or reduce expenses. Though the former is a complex, multi-dimensional challenge, the latter needn’t be.

If you have doubted your ability to scale your business growth potential to meet demand, to hire enough help, to manage costs in the face of supply chain challenges or have been hamstrung cost of modernizing and upgrading your factory floor, it could be that nearshoring holds the promise of trimming the fat in the most efficient, and immediate, manner.

In our last blog, we looked at the conveniences of nearshoring for manufacturing – one of seven factors that make cross-border operations in Mexico so attractive. Now, we’ll cut closer to the bottom line, with a greater understanding of the cost benefits of taking your mission-critical work to a Mexico-based nearshore manufacturing facility:’

Reduced Labor Costs

Not even China can compete these days with the cost-benefit advantages of manufacturing in Mexico – one of the lowest landed-cost countries in the globe. Operational, labor, and facility costs are substantially less when compared to U.S.-based manufacturing and other markets; and with an average fully burdened hourly wage of $4.13 you’ll be paying less than one-fifth of the comparable labor costs here, while working with an experienced and (relatively) well-compensated workforce. Even salaries for skilled technical personnel and managerial grades are closer to, but still lower than, those in the U.S. In short, all manufacturers can benefit from lower labor costs in Mexico, especially those for whom labor currently makes up a large portion of their total costs.

Less Expensive Oversight

If it is said that time is money, you will reap the rewards of banking both through a manufacturing partnership in Mexico. Though you will have a trusted partner advocating on your behalf if you choose to work with a firm like The Nearshore Company, you still may wish to travel to the manufacturing site to ensure your project is on spec, and on track.

Key Mexican cities where The Nearshore Company has manufacturing facilities — Matamoros, Nuevo Laredo, and San Luis Potosí — are easily reachable from the U.S. by air – a wallet-friendly day-trip from many U.S. cities.

Supply Chain Efficiencies

In our last blog, we talked about how inconvenient it can be to have materials and finished products transported by sea to the Far East. But putting the fate of your manufacturing process in the hands of an unreliable flotilla can be very costly as well – paying to idle factories and workers during materials delays and absorbing the cost of lost opportunities by missing key in-store deadlines. Instead, load your finished product on a truck in Mexico, and start reaping the rewards from U.S.-based transactions in less than three days.

In our next blog, we’ll talk about the benefits of a collaborative relationship with a nearshoring partner experienced with manufacturing in Mexico. In the meantime, if we at the Nearshore Company can help enlighten you about nearshoring for manufacturing, please reach out.

Category: 3PL
Last Updated: OnMay 11, 2022