Xavier asked:
When Mexico is compared to China, India, Bangladesh, Vietnam and other Asian off shoring countries, is Mexico the best choice?
Aubrey
When Mexico is compared to China, India, Bangladesh, Vietnam and other Asian off shoring countries, is Mexico the best choice?
Aubrey
The following criteria may help determine the cost-effectiveness of outsourcing in any particular geographic zone:
1. Whether the output (products and services) are meant for 100% consumption in the US or some are for re-export or all are for 100% export to other countries.
2. What type of quality of output you are looking for?
3. What is the Shipping-time required for the transportation?
4. What is shipping-cost for the same output if they are outsourced in the countries as mentioned by you?
For example, if the output is meant for consumption in the US and the shipping time (total delivery period) is too long, say 30-days from Asia, than 7-days from Mexico, and also the cost of shipping is say US$ 5000 from Asia than US$ 500 from Mexico, then it is advisable to have that product outsourced to Mexico.
On the other hand, if the product is for selling in Asia, Africa and Europe then it may be a good choice to outsource the same to any of the Asian countries mentioned by you.
We can assume that the quality of output for industrial and consumer items are better taken care in Mexico than in Asia, due to poor work-habit and lack of awareness for quality, than what you can find in Mexico.
So, these can be decided on case-to-case basis and also how much ‘noise’ the US public or politician can generate in outsourcing a particular item to any particular country.
Hope above helps.
Comment by ~slsmhu — February 14, 2009 @ 2:09 am
Let’s talk about China, Mexico and the U.S.
It is known that about 15 percent of what is exchanged in goods between U.S. and China is China buying from the U.S. With Mexico it’s about 35 percent.
As income grows in Mexico, we can expect that number will continue to increase. Also there are chronic shortages of materials in Mexico that the U.S. could serve if we were to build this relationship in a positive fashion rather than the way we have to date.
A simple example is fabrication. There is a shortage of fabricators in Mexico. The result is that a lot of firms are having a difficult time getting supplies.
You could build additional fabricators in Mexico but meeting U.S. regulations on a lot of these materials is not something Mexicans particularly want to do. So it’s more likely the fabricators would be in the U.S. near the border and shipping into Mexico.
Another area is technology. The U.S. has leading-edge technology, for example in automation, which is likely to grow in Mexico. There are many products that Mexico does without simply because distributors are not calling on them.
Please take a look at this page:
Comment by Flakita — February 17, 2009 @ 1:56 pm