Still an Optimal Time to Take Advantage of Supplier Nearshoring

Currently in China, “Zero COVID” policies continue to be implemented that imply extensive confinements. According to The Inter-American Development Bank (IDB), there are estimates that suggest around 79% of US manufacturing companies in China have already started or have plans to relocate part of their operations to North America and Mexico.

A big wave of companies from various sectors are landing in Mexico due to some advantages of Mexican market and supplying base:

  • Qualified labor
  • World-class infrastructure
  • Capacity to receive additional volumes (some commodities)
  • Fast and secure supply chains
  • USMCA that facilitates trade between Mexico, United States and Canada.

This nearshoring movement, that has brought new and bigger demand for products and services in Mexico, has resulted in Mexican suppliers improvement, not only in capacity and capabilities but in a “New way of Thinking”.

Strategic sourcing focuses on maintaining a continuous process that attempts to achieve the ideal number and mix of capable suppliers that allow the organization to continue its supply chain.

This has to be taken in mind by Purchasing Organization while developing their Strategic Sourcing Strategies and take advantage of supplier Nearshoring.

Here is a summary of the approach APD follows working with clients on Mexican supplier identification projects (with excellent results):

  1. Identify the Critical Attributes that the customer need that new suppliers have. (Ideal Supplier Profile)
  2. Search and engage with potential suppliers to review their Capabilities, Capacities and their willingness to be part of the project.
  3. On site assessment to validate supplier´s information gathered in the engagement.
  4. Support or Lead RFQ stage to get a cost validation
  5. Support on the Sourcing Process to new suppliers.

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