Amerex Case Study

Last Updated on June 7, 2023

Amerex, like many companies performing large-scale manufacturing that required sub-assembly of their products, began to face mounting pressure from their competitors that were having products produced in Asia. In order to remain competitive, Amerex needed an assembly in Mexico solution to meet the price pressures from the Asian market.

Amerex, a company involved in large-scale manufacturing, found itself in a challenging position as it faced increasing competition from rivals who were outsourcing their production to Asia. To maintain competitiveness and counter the price pressures exerted by the Asian market, Amerex recognized the need for an assembly solution in Mexico.

The decision to seek an assembly solution in Mexico was driven by various factors. Firstly, Amerex was aware of the cost advantages associated with manufacturing in Mexico. With its proximity to the United States and favorable trade agreements such as the U.S. – Mexico – Canada Agreement (USMCA), Mexico offered a strategic location for Amerex to set up its assembly operations.

By establishing a presence in Mexico, Amerex aimed to leverage the skilled labor force available in the country. Mexico has a strong manufacturing base and a workforce experienced in various industries, making it an attractive option for companies seeking reliable and competent labor. Amerex recognized the potential to tap into this talent pool to efficiently assemble their products.

Moreover, having an assembly solution in Mexico would provide Amerex with increased flexibility in production and supply chain management. It would allow the company to respond quickly to changing market demands, reduce lead times, and improve overall operational efficiency. By streamlining their manufacturing processes in Mexico, Amerex anticipated gaining a competitive edge over their Asian counterparts.

To implement the assembly solution in Mexico, Amerex embarked on a thorough evaluation process. They assessed various factors such as infrastructure, logistics, labor availability, and the regulatory environment. Site selection played a critical role in ensuring the success of their venture. Amerex carefully evaluated different regions in Mexico, considering factors such as proximity to their target market, availability of transportation networks, and access to reliable utilities.

Once a suitable location with NovaLink was identified, Amerex began establishing their assembly operations in Mexico. This involved setting up the necessary infrastructure, securing the required permits and certifications, and recruiting and training the local workforce. The company also established partnerships with local suppliers to ensure a smooth supply chain process.

As the assembly operations in Mexico commenced, Amerex experienced numerous benefits. The proximity to the United States allowed for easier communication and coordination with their headquarters, enabling swift decision-making and efficient collaboration between teams. Additionally, the reduced transportation costs and shorter lead times associated with manufacturing in Mexico contributed to overall cost savings for the company.

Furthermore, by utilizing the skilled labor force in Mexico, Amerex witnessed an improvement in the quality and productivity of their assembly processes. The Mexican workforce's expertise, combined with proper training and supervision, resulted in a higher standard of workmanship and enhanced efficiency in the production line.

In terms of market competitiveness, Amerex's decision to establish an assembly solution in Mexico proved to be advantageous. They were able to offer their products at a more competitive price point, aligning with the pricing pressures imposed by their Asian competitors. This allowed Amerex to retain existing customers and attract new ones, bolstering their market position.

In conclusion, faced with fierce competition from rivals outsourcing to Asia, Amerex recognized the need for an assembly solution in Mexico. By capitalizing on the cost advantages, skilled labor force, and favorable trade agreements, Amerex successfully established their assembly operations in Mexico. This strategic move enhanced their operational efficiency, reduced costs, and improved their market competitiveness. Through careful planning and execution, Amerex demonstrated how leveraging a Mexico-based assembly solution can be a viable strategy for companies seeking to navigate the challenges of the global manufacturing landscape.