Reshoring Manufacturing With NovaLink
Reshoring manufacturing back to North America is a growing trend as companies realize the benefits of production closer to their headquarters and customers. NovaLink offers an innovative solution to make reshoring more feasible and cost-effective. Learn how NovaLink allows you to reshore manufacturing with greater ease, less risk, and cost-competitiveness. Discover the advantages of reshoring with NovaLink's help.
Top Reasons Companies Are Considering Reshoring Manufacturing
There are many reasons for manufacturers to reevaluate their offshoring operations and consider Reshoring manufacturing to North America. Manufacturers are recognizing that costs, risks and strategic impacts of offshoring manufacturing operations are now large enough, especially with the trade tariffs against China by the United States, to overcome any market wage advantages. Here are some of the top reasons companies are considering reshoring manufacturing:
- Reduced Shipping Costs and Times - Shipping finished goods overseas is expensive and slow. Reshoring production brings it closer to customers and cuts transportation expenses and delivery times.
- Quality Control - Overseas manufacturing often lacks proper quality control and oversight. Reshoring provides more control and ability to ensure products meet specifications.
- Protection of Intellectual Property - Offshoring increases the risks of counterfeiting and IP theft. Reshoring allows better ability to safeguard trade secrets and proprietary processes.
- Supply Chain Continuity - Global supply chains can easily be disrupted. Reshoring mitigates risks of delays from port stoppages, pandemics, natural disasters, etc.
- Automation - Advanced automation and robotics make domestic manufacturing more affordable. Semi-automated and autonomous production is easier to deploy locally.
- Support for Local Economies - Reshoring manufacturing drives job growth and keeps money circulating in local communities and the overall national economy.
- Government Incentives - Some federal and state incentives provide tax breaks, grants, workforce development funds, and subsidies to motivate reshoring production.
- Geographic Proximity - Physical closeness to R&D, engineering, headquarters, and technical staff allows for better collaboration and innovation.
- Improved Public Image - Reshoring manufacture earns goodwill with policymakers, local communities, and consumers who want to buy more domestically-made goods.
NovaLink Manufacturing Facility Video
NovaLink has released a new video highlighting the versatility of their manufacturing facility in Matamoros, Mexico. In this video, you will be able to see the factory and its associates in action. The video, which was filmed on the floor of the manufacturing facility, illustrates the variety of manufacturing operations and the wide range of skills represented by the workforce. As well as demonstrating NovaLink's commitment to first class manufacturing, the video also emphasizes its commitment to safety protocols for the health of its workers and clients.
How Reshoring Manufacturing Works
Offshore manufacturing has some obvious financial benefits, which includes lower labor and production costs helping them establish their operations and produce their products at a lower cost. While Reshoring Manufacturing may not give you the cost efficiencies that can be found in China, Reshoring Manufacturing can help strengthen the local economies of the country in which they are located and the economies in the countries around them. Reshoring Manufacturing:
- Creates manufacturing jobs
- Strengthens the workforce
- Shortens the supply chain
- Reduces unemployment,
- Helps balance trade deficits.
Mexico Manufacturing Advantage
Mexico has emerged as a popular destination for manufacturing due to its strategic location, abundant labor force, and attractive trade agreements. Its proximity to the United States, the world's largest consumer market, allows for easier access to transportation and reduced lead times. Additionally, Mexico has a young and growing workforce, which is highly skilled and competitive in terms of wages. Moreover, Mexico has signed various trade agreements, such as the United States-Mexico-Canada Agreement (USMCA), that provide favorable tariff and duty rates to manufacturers. These advantages have made Mexico an ideal location for manufacturing operations in industries such as automotive, aerospace, and electronics, among others. As a result, many multinational corporations have established their manufacturing facilities in Mexico, taking advantage of the country's manufacturing prowess.
Decreased Time to Market
Mexico's location makes it an ideal nearshore manufacturing destination, with easy access to the U.S. market.
Inexpensive but skilled Maquiladoras Labor
With wages that are up to 80% lower than in the U.S., you can save big on your labor costs without compromising on quality.
Tax Incentives
Mexico offers a range of tax incentives and exemptions for manufacturers, making it even more affordable to do business here.
Free Trade Agreements with 44 Countries
There are 44 countries with which Mexico has free trade agreements. Manufacturers from the United States and Canada have access to Mexico through the United States-Mexico-Canada Agreement (USMCA).
The Impact of Reshoring on Supply Chain Management and Logistics
In this blog post, we will explore the impact of reshoring on these critical functions and discuss the challenges and solutions for effective supply chain management and logistics in a re-shored environment.
Why U.S. Companies Are Moving Their Supply Chains From China to Mexico
Does Mexico have supply chain issues? In spite of the fact that all exporting companies face supply chain challenges, Mexico seems to face fewer challenges than other manufacturing countries, such as China. Supply Chain Brain has a list of reasons why companies are moving their supply chains from China to Mexico.
Ground Transport
Goods can be imported from Mexico via ground transport in a matter of days or even hours. This is never an option for goods manufactured in China, from which everything must come by ocean or air. The former is very time consuming (it can often take weeks), and the latter is very expensive.
"Trusted Partner" Status for Customs
The U.S. offers two programs that help facilitate faster and easier Customs processing for U.S.-Mexico trade: FAST and C-TPAT. Initiated after 9/11, FAST is a trusted traveler/trusted shipper program that allows expedited processing for commercial carriers who have completed background checks and fulfill certain eligibility requirements (much like TSA Precheck for air travelers). FAST certification is for drivers; C-TPAT is a broader program that shippers must apply for. Once a company is certified for C-TPAT, its drivers can then apply for FAST. There are no such programs for U.S.-China trade.
A Transparent Landscape
There are also new modern options for transport that make Mexico attractive. Companies can coordinate door-to-door transportation between the U.S. and Mexico, including procurement of trucks on both sides of the border, customs clearance, insurance, financing, and reporting. This allows manufacturers to focus on their core competency, rather than logistics, and can also reduce the need for big in-house shipping and logistics teams.
Small Language Barrier
Spanish is the second-most common language spoken in the U.S., making it relatively easy to communicate with partners in Mexico (and find bilingual staff and vendors).
Spanish is the second-most common language spoken in the U.S., making it relatively easy to communicate with partners in Mexico (and find bilingual staff and vendors).
Explore Other Resources
Please explore these other useful resources to better understand reshoring manufacturing:
Are You Ready to Begin Manufacturing in Mexico? Contact Us for a Free Consultation
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