Manufacturing Industry

The manufacturing industry in Mexico faces unprecedented events. The sector is being transformed by restrictions on the border, pandemic confinement, economic recession and new regulations. The North American region, since their integration with the US industry, finds the Mexican industry sector as a highly dynamic and competitive one.

Published on August, 2020 Ana Karen Tello & Jorge Juarez
The sector encounters severe restrictions for the return of their employees, impacting economic activity indicators and employment such as turnover and productivity. Also, the decline of the internal consumption has resulted in the drop of income and inventory levels. On the other hand, the new USMCA regulations increase costs and force a restructure of the value chain.

Companies should start a process that can make their supply chain more transparent, pinpointing vulnerabilities and creating emergency protocols. The different organizations will have the capacity to view their direct and indirect suppliers with the purpose of identifying weaker inputs and mitigate risks. The companies with transparent chains will also have visibility of their clients and supply chains.

Given the period of uncertainty we live in, companies should have competent foreign trade teams, as well as lean on experts in order to avoid delays in the manufacturing plant supply. As a result of the drastic changes in the demand resulting from COVID-19, we recommend diversifying the supplier portfolio as well as production.  It is vital to determine the most vulnerable point within the supply chain, identifying the major risks associated with each one of the parts and inputs. 

(PDF Article Only Available in Spanish)
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