The Value of Supply Chain Visibility in Mexico
02.24.22
Supply chain visibility has always been an important part of running efficient operations for manufacturers. Having the ability to track materials, components, and shipments throughout the entire journey provides the logistical data necessary to improve the flow of materials and schedule for manufacturers.
However, the value of well-supported supply chain visibility goes beyond the initial scope of ensuring shipments are delivered on time and intact. It also involves meeting the sustainability needs of many manufacturers today, as well as managing accurate inventory to reduce space, costs, and risks that often are unavoidable when supply chain visibility is lacking.
There are several ways supply chain visibility has improved over time, though operating in Mexico lends itself to specific advantages. Put simply, supply chain visibility comes down to accessibility, and Mexico manufacturing offers this to foreign companies in ways manufacturing in China cannot.
Close Proximity
Technology has greatly helped U.S. and other foreign manufacturers track shipments and ensures compliance is met as it crosses international borders. However, the value of manufacturing in Mexico offers an additional benefit that manufacturing in China does not: proximity. The distance between the U.S. and Mexico allows manufacturers to establish strong, in-person relationships with suppliers and conveniently provide oversight when necessary to improve efficiencies.
It’s far easier for manufacturers to visit their factories in Mexico due to the closer distance versus facing the challenges of drastic time zone differences, extensive travel, and potential border entry restrictions when operating in China.
Transportation Flexibility
Additionally, there is flexibility and versatility when it comes to transportation options when manufacturing in Mexico. Determining the most efficient method allows companies to avoid delays due to congested entry points, allowing them to get goods to market on time. Unfortunately, shipment costs and delays have been part of a growing problem for U.S. manufacturers that have relied on China as their primary supplier. Cargo ships have been held up in ports for weeks at a time, coupled with a decrease in the number of truck drivers available to continue the logistics process.
Furthermore, sea shipping rates have increased dramatically on the cargo route from Asia to the U.S. West Coast, and air freight has increased by as much as 50% in some cases. These pandemic-driven challenges remain in 2022 as Covid lockdowns and diverted shipments continue to plague China’s supply chains.
In comparison, the supply chain in Mexico remains strong and transportation costs remain much lower (think: hundreds vs. thousands of dollars). Also, delivery time from the border region often occurs on the same day depending on the size of the shipment and how fast it clears customs.
Shelter Services
To streamline compliance and logistics, partnering with a shelter company like IVEMSA allows foreign manufacturers to focus solely on production. IVEMSA oversees the entire logistics process and handles any problems that may arise by communicating with the manufacturer’s chosen transportation brokers. Foreign companies can benefit from IVEMSA’s decades of experience and expertise in working with Mexico’s supply chain and their network of resources to help shipments make their way to their final destination on time.
Working with our shelter company helps keep your operations running smoothly. Learn more about we can help you reach your goals. Contact IVEMSA today.
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