Manufacturing’s Global Shift from China to Mexico

The foundations of global manufacturing are shifting on a scale not seen in 50+ years, and the pace is picking up faster than anyone expected. For decades now, China has been known as the “factory of the world.” If you wanted to produce cheaply, quickly or massively, you went to China. Consensus opinion saw China as the most strategically advantageous place to produce, and anywhere else seemed like a limitation or liability. But now that’s changing—faster than anyone expected.

More than any other global production location, Mexico has stepped into the gap created as companies all over the world are lessening their reliance on China. Manufacturers are rushing to setup Mexico operations to take advantage of the country’s available labor force, desirable demographics, open-trade approach and US proximity, among other benefits.

This paper will explore why companies are shifting from China to Mexico (or to China and Mexico) through the Mexico manufacturing successes of two companies that are Entrada Group clients with vastly different circumstances. One produces seasonal consumer recreational products while the other is a vertically integrated contract manufacturer that delivers custom end-to-end solutions from design through assembly and delivery.

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