Business Leap Frontier

Mexico is well known for the varsity of products being manufactured in Mexico and this might be one of the reasons for Mexico manufacturers ranking 12th in the world economy. Mexico manufacturers produce both domestic level and international level products. Many manufacturers who started their manufacturing in Mexico with simple assembly operations have now turned out into magnificent companies with complex manufacturing operations involved.

The products include television, automobiles and personal products. Mexico manufacturers are as good as China manufacturers, or even better skilled in some industry. The impact of Mexico manufacturers on US economy is the same as the impact of China manufacturers to the Asian economy. The ‘Bracero program’ which was signed between United States and Mexico started as the beginning of the manufacturing development in Mexico.

Mexico manufacturers used commonly five types for implementing the manufacturing in Mexico:
1. Contract Manufacturing :
In this method, the firm manufactures product on behalf of another firm. The contract will be usually predetermined and the payments would be fixed independent of the profit.

This method was preferred if the work required 25 or less individuals or if the work to be performed is sporadic kind. Manufacturers who look for high quality looked for firms which have the capability to meet their quality standards. In the beginning a minimal amount of work is assigned to the contractors. If the contractors continue to meet the standard, then large capital would be invested.

2. Joint venture :
In this method, two or more related Mexico manufacturers establish an agreement and sets up operations in Mexico. The two manufacturers need not be of the same product manufacturers, but they can be related to a complex product in Mexico manufacturing. For example, the firm which markets transportation vehicles could joint venture with the firm which produces brake systems.

This method of implementation helped many Mexican manufacturers in achieving the objectives. But this method has lots of challenges involved. The organization culture must be synchronized. Goals and objectives should be clearly defined. If these challenges are met, then outcome would be definitely profitable.

3. Wholly-owned subsidiary :
These form of manufacturers acts as single body. Manufacturers can establish itself in Mexico. A well planned and maintained subsidiary of this kind can be more productive. But, there is also a high amount of risk involved. For this type of manufacturing setup, the firm should have clear understanding of various customs, employment and labor laws. Professional advices should be taken for setting up the facilities. Investment should also look into the effort, time and the efficiency of the product.

4. Shelter Manufacturing :
In this method also, the firm will have full access to their own quality and production. For this type, legal presence in the country is not required. Investment in physical and human assets is reduced in this method.

5. Outsourcing :
In this type, Mexico manufacturers hire people to work on foreign products. This method looks very similar to the contract based manufacturers except the fact that workforce is inexpensive in this method.