In my last posting I wrote about the emergence, at least
according to New York Times writer, Chris Anderson (“Mexico: The New China”),
of a San Diego / Tijuana industrial hub that he believes will rival the Hong
Kong / Shenzhen nexus.
What might make San Diego / Tijuana as an alternative for
US manufacturers? Anderson sites several
- A shorter supply chain allows for small batch
production and shorter lead times.
- Just in time manufacturing allows for running
changes rather than having to wait until current inventory has sold through.
- Reduced risk from a constant on-site presence
reduces downstream costs. If there is
something wrong in production, the company learns about it as it happens rather
than waiting to discover it once the order is received.
- Wages in Mexico, due to Chinese inflation
over the last decade, are now more in line with China’s pay rates.
I would add that:
Producing near the US border
can result in one or two additional product turns for companies and retailers.
Company principals can, if
they wish, shuttle to the factory on a daily basis. This constant presence on the manufacturing floor
can reinforce that company’s business culture.
The ability of Mexican
trucking companies to now cross the border is off to a slow start but, should it develop as
expected, could create even shorter delivery times.
It will be interesting to
see if we see a migration of companies to the San Diego area. If you are producing in Mexico, planning to or
thinking about it; let us know if you think that the San Diego / Tijuana hub is
something toy and play companies should be considering.