What Really Matters When Choosing Manufacturing Partners?

Sourcing Factors

Based on Apparel Magazine’s Sixth Annual Apparel Research Study & Analysis we recently asked, “Are Companies Really Looking for Cost Savings in ALL the RIGHT Places?” Another study area focused on factors for choosing a sourcing region/partner. Here are the most critical factors for 2012 along with the corresponding percentage of respondents. These components further support the case for textile assemblies in Mexico:

  • Cost (30%): Boston Consulting Group forecasts that the fully loaded cost of hiring Chinese workers will be 25% higher than the cost of using Mexican workers by 2015.
  • Quality Programs (25%): Mexican manufacturers have all the higher quality certifications implemented in their operations including ISO 9001: 2008 and Six Sigma disciplines.
  • Product Development Capabilities (15%): Near-shoring to Mexico reduces time during the development process and speeds products to market.
  • Lead time (10%): Products made in Mexico can reduce lead time to a one week turnaround.
  • Social Compliance (10%): Almost all employment relationships in Mexico are based on contracts that include salary, a detailed work-schedule, vacation and “rest periods”, holidays and overtime conditions.
  • Established Region/Historical Relationship (5%): Mexican manufacturers have over four decades of experience in working with North American companies.
  • Accessibility of Raw Materials (less than 5%): Mexican manufacturers located on the U.S./Mexico border have better accessibility to reach supplies and bring in raw materials.
  • Financial Terms (price stability) (less than 5%): Mexico is one of the most stable economies in Latin America.
  • Trade Preferences (No response): Manufacturers need to be more interested in trade agreements. Mexico has the largest network of international trade agreements that foster trade benefits with 44 countries. This allows manufacturers to both make their product in Mexico and export from Mexico.

These advantages make Mexico the right place to turn for textile manufacturing.

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