Nature

Mexican factories win in supply chain overhaul

New data suggests Mexican suppliers are gaining ground as manufacturers reset their supply chains amid growing global disruption.

Last year, major U.S. manufacturers sourced chemicals, construction products and materials, and other goods from six times as many Mexico-based suppliers as in 2020, according to the procurement software firm Jagger. Meanwhile, the number of suppliers in China that received supply offers fell 9% in 2021, Jaggaer said, using data from its 30 largest U.S. industrial customers with an average of more than 30. billions of dollars in annual revenue.

The pressure for suppliers in Mexico comes as more companies say they are resetting their supply chains by adding suppliers and moving some production closer to end users. The effort aims to build resilience and reliability following a series of shocks to supply networks caused by Covid-19 outbreaks, port bottlenecks, extreme weather and geopolitical conflicts. .

“If you’re a manufacturer and you had strategic relationships with one or two suppliers that produce the same or a similar good, now we see that same manufacturer having relationships with three or four different suppliers,” Bureau said. , managing director of Jaggaer, based in Morrisville, North Carolina.

Added suppliers tend to be closer to the buyer and their customers, he said. The company tracked a 514% increase from 2020 to 2021 in the number of Mexican suppliers receiving offers from its large US buyers and a 155% increase in the number of Latin American suppliers receiving offers during the same period.

At the same time, the company found that these manufacturers sourced goods from 26% fewer suppliers in the Asia-Pacific region.

A separate survey of 2,000 US and UK chief executives by London-based procurement and supply chain consultancy Proxima Group found that 15% had moved production closer to their home country or were sourced from suppliers in nearby areas, and 26% were considering doing so. .

Companies are looking to build redundancy into their supply chains, said Tom Stringer, who leads the site selection practice at Chicago-based consulting firm BDO USA LLP.

“This ability to go from one to two to three or four vendors for different items to make sure they stay on the shelf and are available to the consumer,” he said, “it’s is a big problem that is being solved right now.”

Write to Lydia O’Neal at [email protected]

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Appeared in the print edition of April 2, 2022 under the title “American companies turn to Mexican suppliers”.


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