Mexican Factories Gain With Supply Chain Reset

The latest data shows that the Mexican suppliers are gaining ground as manufacturers reset their supply chains after growing global disruptions. 

According to the procurement bids firm Jagger, big manufacturers in America solicited chemicals, products and construction materials and other goods from six times last year as many suppliers in Mexico as they did in 2020.

The report also showed that the number of suppliers in China that received procurement bids fell by 9% in 2021, the firm said, using data from its 30 biggest USA manufacturing customers with an average of more than $30 billion in annual revenues.

Pressure on Mexican suppliers will increase as more companies reorganise their supply chains, add more suppliers, and bring some production closer to the end-user. The effort aims to enhance resilience and reliability after a series of shocks to the supply network caused by the outbreak of Covid-19, port shortages, extreme weather events and geopolitical conflicts.

The chief executive of Jagger, Jim Bureau has said that the suppliers tend to be closer to the buyer and its customers. He also said that the company saw a 514% increase from 2020 to 2021 in Mexican suppliers receiving bids from its big US buyers and a 155% increase in Latin American suppliers receiving the same bids over the period.

Another survey of 2,000 US and UK chief executives by Proxima Group found that 15% has moved production closer to their home countries or sourced from suppliers in nearby regions, and 26% were looking to do the same.