Faced with growing fears of political unrest, rising fuel costs and the threat of unforeseen supply chain disruptions, more and more U.S. companies are looking closer to home for dependable, alternative sources for supplies and manufactured products.
That’s the message Source One executives will take to Manzanillo, Mexico this week when they make a special presentation at the 2nd National Congress Manzanillo (CONAMA) 2011, a key international business conference taking place March 10-12. Source One is the first and only U.S. firm to be invited to participate in the international business symposium.
“The opportunities run both ways,” notes Steven Belli, Chief Executive Officer for Source One. “Mexican companies that can demonstrate a high level of industry expertise, creativity and reliability – and are able to market themselves effectively to prospective U.S. business partners – will find that the future is a bright one.”
Already Mexican companies have a number of inherent advantages that should be appealing to potential U.S. partners, he adds. Among them:
• The North American Free Trade Agreement limits costly import and duty barriers
• Reasonably priced labor
• A High level of English literacy in the population
• Lower Costs for Shipping Compared to Overseas
• Closer geographic and time zone proximity that makes it easier to visit and evaluate potential suppliers
A number of U.S. industries have already begun utilizing Mexican suppliers for their various products and materials, Belli says. Although it’s not necessarily a new phenomenon, he adds. Since the advent of the “maquiladoras,” assembly plants that were built along the U.S.-Mexico border beginning in the 1960s, U.S. manufacturers have sought out partners south of the border who could provide dependable, high quality, low-cost production services.
Today, much of the outsourcing activity is in high tech, where companies such as IBM and Oracle have been actively involved in the development of the Mexican IT industry. Last year, in a ranking by the NearShore Americas independent news blog, Mexico placed two of the top six Latin American cities for IT outsourcing.
Monterrey, which is a host for a number of prominent technology firms and is also an important hub for IT-specific education and technical training, placed first, while Guadalajara “the “Silicon Valley of Mexico” placed fourth.
Monterrey is also the center for one of Mexico’s growing clusters for outsourced aerospace-related work, Belli says. Indeed, the increasing competitiveness of Mexican-based aerospace suppliers recently raised alarms among their U.S. counterparts, when a threat to picket by labor leaders representing aerospace workers based in Seattle led to the cancellation of a MexicoNow Aerospace Industry Conference scheduled for early December.
In addition, the U.S. furniture industry has spent the past few years building up solid relationships with Mexican suppliers. Companies such as La-Z-Boy and Four Hands have turned to Mexican suppliers in part because the shorter supply chains make it easier to efficiently manage warehouses and inventory control.
For many U.S. companies, Mexico may be the best kept secret solution to their problems, Belli says. Compared to their experiences with overseas entities, "near-shore" suppliers in Mexico can offer a number of significant advantages. Even so, locating the right partner can be a significant challenge.
Source One professionals have been working with their colleagues in Mexico and Latin American to identify potential suppliers and to assess capabilities for increased business expansion, Belli notes. In addition, Source One has been working directly with potential suppliers to assist them in their efforts to reach out effectively to the U.S. marketplace.
Organizers of the CONAMA conference expect to attract an audience of some 500 participants representing leaders from government, businesses and universities throughout Mexico and Latin America with interests in international commerce, outsourcing and procurement, logistics, transportation and tourism.
Source One Management Services, LLC, based in Willow Grove, PA, is one of the leading strategic sourcing and procurement providers in the U.S. Its team of experienced sourcing professionals works closely with clients’ in-house staff to reduce spend, optimize existing budgets and increase the efficiency of operations by using proven sourcing and purchasing strategies, best practices, innovative technology, and an unsurpassed database of market intelligence dating back to 1992 to help clients achieve the maximum level of savings possible.
Note: Source One will be providing a live Twitter Cast during the CONAMA Mexico business presentation. Tune in for updates and to follow the proceedings as they happen.