Deciding if your Product is Right for Mexico Manufacturing

Last Updated on February 26, 2024

Mexico has become a popular destination for manufacturing in recent years. This is due to a number of factors, including its proximity to the United States, its low labor costs, and its skilled workforce. However, not all products are right for manufacturing in Mexico. In this infographic, we explore if your product is right for manufacturing in Mexico.

What Type of Product Do You Want to Make?

The first step in deciding if your product is right for manufacturing in Mexico is to consider the type of product you want to make. Some products are better suited to Mexican manufacturing. For example, labor-intensive products with low profit margins are often good fits for Mexico manufacturing. This is because Mexico's labor costs are significantly lower than the United States.

How Fast Does It Need to Be Made?

The speed at which your product must be manufactured is another factor to consider. Mexico may be the best option for you if you need your product made quickly. Mexico's proximity to the United States allows your finished product to reach markets faster than in China.

What Cost Savings Are You Looking to Gain?

If you are looking to save significant costs on manufacturing production, Mexico may be an excellent option. However, it is imperative to remember that not all products will have the same cost savings in Mexico. This is because labor and materials costs can vary depending on the product and the industry.

Is the Quality of Your Product Important?

Mexico is the best option if quality is important to you. Recent years have seen Mexico emerge as a global manufacturing hub with a strong focus on quality control. Mexico's manufacturers invest heavily in advanced testing and monitoring technologies to ensure that their products are of the highest quality. The ISO 9001 quality management system is widely used by Mexican manufacturers, which ensures that their products and processes are consistently of high quality.

Is Intellectual Property of Your Product Important?

Intellectual property is very important to Mexico. Mexican intellectual property laws have played a crucial role in encouraging innovation, attracting foreign investment, and positioning Mexico as a regional leader in IP-driven industries. Mexico is well-positioned to continue its growth with a strong legal framework and the recent improvements under the USMCA. Taking steps to address pending commitments and challenges will ensure Mexico's position as a global IP-driven investment hub.

There are still needed reforms—such as granting ex officio authority to Mexican customs officials to seize suspected infringements in-transit—that remain key industry priorities. The Lopez Obrador Administration, in its 2019 budget, reduced funds dedicated to combatting piracy and contraband. The unit prosecuting IPR crimes, UEIDDAPI, received USD 1.4 million—a cut of roughly USD 285,400 or 16.9 percent from the previous year’s budget. Mexican IP specialists recommend the government could reinforce its fight against piracy and contraband with greater investments in technology and training.
Mexico - Protecting IP

What Types of Products Not a Fit for Mexico Manufacturing?

Here are some types of products that are not a good fit for Mexico manufacturing:

Products that are highly regulated: Mexico has a number of regulations that can be difficult to comply with. This can make it difficult to manufacture products that are highly regulated in Mexico.
Products that require a lot of customization: Mexico's manufacturing capabilities are not as well-suited for highly customized products. This is because Mexico's workforce is more accustomed to mass production.
Heavy or Bulky Products: Manufacturing large, heavy, or bulky products in Mexico can pose challenges in terms of transportation and logistics. Shipping costs may be prohibitive for such items, and it could be more practical to manufacture them closer to their primary markets.
Perishable or Highly Fragile Goods: Mexico's manufacturing infrastructure is generally well-developed, but products that are highly perishable or extremely fragile may require specialized handling and facilities that aren't readily available in all areas of the country.
Products with Complex Regulatory Requirements: Some products, particularly those subject to strict regulatory compliance or quality control standards, may face challenges in Mexico. It's essential to ensure that the necessary regulatory infrastructure and standards are in place for your specific product.
Low-Value Commodities: Products with very low profit margins may not be suitable for manufacturing in Mexico, as the cost savings achieved by producing in the country might not be substantial enough to justify the investment.
Products with Highly Volatile Market Demand: For products with unpredictable or highly volatile market demand, setting up manufacturing operations in Mexico may not be ideal, as they may require rapid adjustments to production levels that could be challenging.
Products Requiring Specific Regional Expertise: Some products, especially those involving specialized knowledge, skills, or regional expertise, might be better produced in regions where that expertise is readily available.

Conclusion: Manufacturing in Mexico: Consider All of the Factors Involved

If you are considering if your product is right for manufacturing in Mexico, it is important to carefully consider all of the factors involved. Mexico can be a great option for manufacturing products that are labor-intensive and have low profit margins. However, Mexico is not the best option for products that are highly regulated, require a lot of customization, or are time-sensitive.

FAQs

Q: What is the cost of manufacturing in Mexico?

A: The cost of manufacturing in Mexico varies depending on the product and the industry. However, in general, Mexico's labor costs are significantly lower than those in the United States.

A: There are a number of benefits to manufacturing in Mexico. These benefits include:

Lower labor costs
Proximity to the United States
Skilled workforce
Access to the Mexican market

Q: What are the risks of manufacturing in Mexico?

A: There are a number of risks to manufacturing in Mexico. These risks include:

Currency fluctuations
Regulatory compliance

Q: How can I mitigate the risks of manufacturing in Mexico?

A: There are a number of things you can do to mitigate the risks of manufacturing in Mexico. These things include:

Partnering with a reputable Mexican manufacturer
Conducting thorough due diligence
Protecting your intellectual property
Complying with all applicable regulations

About NovaLink

As a manufacturer in Mexico, NovaLink employs a unique approach that transcends the traditional model of shelter production. More than just the location of your manufacturing, we would like to become a partner in your manufacturing in Mexico. You will be able to relocate or initiate manufacturing for your company in Mexico in a low-cost labor environment with very little delay or up-front costs. Find out how we can help you by handling the manufacturing process.

There are NovaLink facilities in the border cities of Brownsville, Texas, Matamoros, Mexico, and Saltillo, Mexico.

Contact NovaLink Today

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