With all the recent supply chain disruptions and escalating transportation costs, offshoring manufacturing operations halfway across the world is a business strategy that is quickly losing its allure. The problem is that bringing manufacturing back to the U.S. is not economically feasible either.
For one, there is already a serious labor shortage, and it is estimated that as many as 2.1 million manufacturing jobs in the U.S. will go unfilled between now and 2030. You can’t run a business without people willing to do the work.
Rethinking Manufacturing Alliances
So, how can American manufacturing stay competitive? By adopting an ally-shoring strategy and exploring manufacturing in Mexico with Tetakawi, a shelter services company with a world-class infrastructure carefully built over the 34 years they have been doing business in that country. They have supported 75 companies of all sizes, and from different corners of the world, with a wide range of turn-key logistical, administrative, and advisory services designed to swiftly facilitate the transfer of manufacturing operations to Mexico.
The shelter service company also helps manufacturing organizations reduce the risk of setting up and running their manufacturing operations in Mexico. By working through Tetakawi, companies don’t need to establish a foreign subsidiary in Mexico. Tetakawi takes care of the buildings, permits, licenses, workforce recruitment, and other local needs so companies coming to Mexico can focus on their core businesses.
What is Ally-Shoring?
U.S.-based manufacturing companies started nearshoring and setting up manufacturing operations in northern Mexican border towns in the 1960s and were soon followed by some large corporations who appreciated the benefits of having a facility in Mexico.
Ally-shoring takes this type of arrangement one step further. It is a spin-off of the concept of nearshoring that has gained in popularity after the pandemic exposed the vulnerabilities of relying on China and other distant locations for the manufacturing of products. This also holds true for the sourcing of materials and components which was being done through complicated supply chains with tentacles to all corners of the world.
This relatively new concept is being promoted by The Brookings Institute, a nonprofit think tank in Washington, D.C., and is supported by the Biden administration. Ally-shoring encourages businesses to rethink manufacturing and supply chains across all sectors by focusing on developing relationships with trusted partners closer to home, such as Mexico, that share American values.
Making this transition is, of course, easier said than done. The good news is that partnering with Tekatawi can help companies navigate the highly complex challenges that come with setting up a manufacturing facility in Mexico, such as:
- Attracting and retaining the right workforce and local expertise
- Ever-changing regulatory compliance requirements
- Legal, tax, and business ramifications
These services can be particularly helpful to small and medium-sized businesses that might not have the in-house resources to make a move or open satellite locations in Mexico on their own—but they are also relevant to large corporations who need “boots on the ground” and experienced partners who understand the local business landscape.
Compared to the U.S. and many other countries, Mexico has lower operating costs, a willing and available labor force, and is in close proximity to American and Canadian markets.
Ally-shoring with Mexico also helps address the issue of the labor shortage. The average age of manufacturing workers in the U.S. is 55 years and they are quickly approaching retirement, On the other hand, most manufacturing workers in Mexico are in their 20s and could potentially spend their career with a local manufacturing organization.
A strategic partnership with Tetakawi helps streamline the process of opening and growing a manufacturing operation in Mexico. They manage over 5 million square feet of industrial real estate and have over 25,000 skilled people on their payrolls. With this type of infrastructure, they can quickly adapt to changing economic situations and scale operations as businesses grow.
Manufacturing in Mexico is growing by leaps and bounds. Demand for goods continues to grow, but there aren’t enough people available to fill all the positions. In addition, long-distant manufacturing partnerships and complicated supply chains are no longer sustainable.
Ally-shoring in Mexico is an attractive solution for manufacturing companies that want to make changes to their current operations.
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