Maximizing Efficiency and Cost Savings: The Benefits of Full Package Manufacturing in Mexico [2023]

Last Updated on February 22, 2023

The majority of business entrepreneurs who have a great product idea but lack the skills, knowledge, or equipment to get their project off the ground may need the assistance of a Mexico manufacturing partner that provides Full Package Manufacturing (FPM) or Full Service Manufacturing, as it is also commonly referred to.

Full-package manufacturing is well suited to Mexico, especially for companies looking to relocate their operations from China. Mexico's manufacturing industry has experienced significant growth over the past few decades, becoming one of the largest in the world. The country offers a variety of advantages for companies looking to outsource manufacturing, including lower labor costs, favorable trade agreements with major economies such as the United States, and a skilled workforce.

Additionally, Mexico's geographic proximity to the United States makes it an attractive option for companies looking to reduce shipping times and costs. As a result, many companies from a variety of industries, including automotive, electronics, and medical devices, have established manufacturing operations in Mexico.

What is Full Package Manufacturing?

Full Package Manufacturing (FPM) is a type of manufacturing model where a manufacturing partner handles the entire production process, from design and prototyping to production and logistics. Essentially, the manufacturing partner takes on the responsibility of producing a finished product, which is then delivered to the company that outsourced the manufacturing.

FPM differs from other manufacturing models, such as Original Equipment Manufacturing (OEM) or Contract Manufacturing (CM), in that it provides a more comprehensive solution. In OEM or CM models, the manufacturing partner is typically responsible for a specific portion of the production process, such as producing components or assembling products. In FPM, the manufacturing partner takes on a larger role, handling the entire process from start to finish.

By utilizing an FPM model, companies can streamline their supply chain and reduce the number of vendors and partners they need to work with. This can lead to cost savings and improved efficiency, as the manufacturing partner takes on more responsibility for managing the production process. Additionally, FPM can help to reduce the risk of quality issues or delays, as the manufacturing partner is responsible for managing the entire process and ensuring that it runs smoothly.

By utilizing an FPM model, companies can streamline their supply chain and reduce the number of vendors and partners they need to work with. Click To Tweet

Why is Mexico Perfect for Full Package Manufacturing?

Mexico is an ideal location for Full Package Manufacturing (FPM) for several reasons:

1. Proximity to the United States: Mexico's close proximity to the United States makes it an attractive option for companies looking to outsource manufacturing. This reduces shipping times and costs, making it easier and more efficient to transport finished products to the US market.
2. Favorable trade agreements: Mexico has several favorable trade agreements in place, such as the North American Free Trade Agreement (NAFTA) and the United States-Mexico-Canada Agreement (USMCA). These agreements provide significant benefits to companies, such as reduced tariffs and streamlined customs procedures, making it easier and more cost-effective to manufacture goods in Mexico and export them to other countries.
3. Skilled workforce: Mexico has a large and skilled workforce, the Maquiladora, particularly in the areas of manufacturing and engineering. This allows companies to access a pool of talent and expertise that can help to ensure high-quality production and efficient manufacturing processes.
4. Lower labor costs: Labor costs in Mexico are generally lower than in many other countries, including the United States and China. This can provide cost savings for companies looking to outsource manufacturing, as they can take advantage of the lower costs of labor in Mexico.
5. Established manufacturing infrastructure: Mexico has a well-developed manufacturing infrastructure, including industrial parks, transportation networks, and supply chains. This makes it easier for companies to set up manufacturing operations in Mexico and take advantage of the existing infrastructure and resources.

Manufacturing capabilities in Mexico have evolved considerably since the pre-NAFTA days. Mexico now has a skilled workforce and boasts first-rate capabilities, with an abundance of expertise, especially in the automotive sector. Aerospace, medical equipment and appliances are also highly successful industries.

Mexico: an essential trade and manufacturing hub https://www.business.hsbc.com/en-gb/insights/growing-my-business/mexico-an-essential-trade-and-manufacturing-hub

What Should Companies Look for in a Full Package Manufacturing Partner?

The most important characteristic of a good full-service manufacturing partner is that he or she should possess the following: skilled labor, equipment, ample factory floor space, and most importantly, experience in producing quality textile products, ensuring any Mexican clothing manufacturing project is a success.

Ideally, the full package manufacturing partner should also provide the following skills and processes:

• Design Consultation / Engineering
• Pattern Making
• Prototyping & Sampling
• Pattern Making
• Grading & Nesting
• Fabric / Component Sourcing
• Technical Design & Quality Control
• Process Engineering
• Time studies
• Line Layout
• Cutting
• Sewing

Overall, FPM and working with a manufacturing partner based in Mexico can provide significant benefits to companies looking to outsource manufacturing, including cost savings, improved efficiency, and access to a skilled workforce and established infrastructure.