The SupplyChainBrain Podcast
A Manufacturer Moves From China to Mexico. How’s That Going?
Oct 25, 2024
Jonathan Egan, CEO of Fabcast Solutions, shares his insights on the strategic shift from China to Mexico for contract manufacturing. He discusses the benefits of nearshoring, including cost savings on energy and labor. Egan recounts the challenges of establishing a new facility, addressing infrastructure issues, and navigating tariff changes. He emphasizes the reliability of Mexico's workforce and the evolving industrial landscape, particularly in the Bajio region. Egan highlights the importance of local talent in ensuring a smooth transition and successful operations.
22:24
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Quick takeaways
- The manufacturer transitioned from China to Mexico to capitalize on lower energy costs and a more favorable labor market amidst geopolitical tensions.
- Securing adequate electricity and infrastructure emerged as significant challenges during the company's move, highlighting the critical need for reliable utilities in manufacturing.
Deep dives
Transitioning Manufacturing to Mexico
A contract manufacturer successfully transitioned operations from China to Mexico, capitalizing on factors like lower energy costs and labor availability. The shift was prompted by geopolitical tensions and constraints faced in the U.S., leading clients to consider Mexico as a favorable alternative for production. This strategy aligns with the broader trend of nearshoring aimed at reducing reliance on distant manufacturing hubs. The company rebranded to reflect this focus and established a facility in San Luis Potosi, poised for production launch.
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