Your company has decided to start manufacturing operations in Mexico but do not know where to start from? Site selection is within the first steps after after performing a feasibility study. Nevertheless, most companies do not know that choosing the right site involves a thorough examination of multiple factors.
This blog post will navigate you through a site selection, we will explore the detailed steps necessary for finding the ideal industrial building for your operations.
Geographical Location
- Proximity to Borders and Ports: Businesses that rely heavily on exports should consider locations near the US border or major ports like Veracruz and Manzanillo to streamline logistics and reduce shipping costs.
- Proximity to Suppliers: Proximity to key suppliers can reduce lead times and transportation costs of raw materials and components.
- Free economic zones: Being relatively close to a free economic zone such as a “Recinto Fiscalizado Estrategico” can be an important point to take into account for site selection, if it goes according to the business strategy.
Infrastructure
- Transportation Networks: Access to highways, railroads, and airports is crucial for efficient supply chain management. The quality of local roads and the availability of public transportation for employees should also be assessed.
- Utilities: Reliable access to water, electricity, and gas are essential. Evaluate the capacity and dependability of these utilities in the prospective area.
Labor Market
- Availability of Skilled Workforce: Depending on the type of workers required, Mexcentrix can guide you on which location can suit best your company needs and to guide you to regions with a high concentration of skilled labor relevant to your industry.
- Labor Costs: Wage levels can vary significantly across Mexico. Balancing cost with the quality of labor is vital for long-term sustainability.
Regulatory Environment
- Local Regulations and Incentives: Some states provide an more attractive incentives package for foreign investor than other. This will also depend on the amount of investment and employment generation.
Cost of Living and Quality of Life
- Employee Attraction and Retention: Areas with a higher quality of life can attract and retain skilled workers more effectively. Consider factors such as housing, education, healthcare, and recreational facilities.
- Cost of Living: The cost of living can impact wage expectations and overall operational costs. Balancing affordability with quality of life is important for both business and employee satisfaction.
Security
- Crime Rates: Assess the security situation in potential areas. High crime rates can affect employee safety, supply chain security, and overall business operations.
Selecting the ideal site for your business in Mexico involves a comprehensive evaluation of various factors. By considering geographical location, infrastructure, labor market, regulatory environment, supply chain proximity, cost of living, security, and cultural aspects, businesses can make informed decisions that align with their strategic goals. A thorough site selection process not only enhances operational efficiency but also contributes to long-term success and sustainability in the vibrant Mexican market.
Collaborating with a shelter service provider like Mexcentrix can streamline and accelerate the site selection process in Mexico. Our team of industry specialists will analyze your unique market requirements to identify the optimal location for your operations. Contact us!