Understanding Electronic Signature Lawfulness for Shipping in Mexico
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Your complete how-to guide - electronic signature lawfulness for shipping in mexico
Electronic Signature Lawfulness for Shipping in Mexico
In Mexico, electronic signatures are legally recognized under the Federal Law of Electronic Signatures. To ensure compliance with the law when shipping goods within the country, businesses must use electronic signatures that meet the specified requirements.
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- Launch the airSlate SignNow web page in your browser.
- Sign up for a free trial or log in.
- Upload a document you want to sign or send for signing.
- Convert your document into a template for future use.
- Edit your file by adding fillable fields or inserting information.
- Sign the document and add signature fields for recipients.
- Click Continue to set up and send an eSignature invitation.
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FAQs
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Is an electronic signature lawful for shipping documents in Mexico?
Yes, electronic signature lawfulness for shipping in Mexico is recognized under the Federal Law on Electronic Signature. Using airSlate SignNow ensures that your electronic signatures are compliant with these regulations, streamlining the shipping process while maintaining legal validity.
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What features does airSlate SignNow offer for electronic signatures in shipping?
airSlate SignNow provides a suite of features that enhance the electronic signature lawfulness for shipping in Mexico. These include customizable templates, secure cloud storage, and integration capabilities with various shipping platforms, ensuring a seamless document signing experience.
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How does airSlate SignNow ensure the security of electronic signatures?
The platform prioritizes electronic signature lawfulness for shipping in Mexico by utilizing advanced encryption protocols and authentication measures. This guarantees that your signatures are not only secure but also legally binding according to Mexican law.
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Are there any additional costs for using electronic signatures with airSlate SignNow?
airSlate SignNow offers a competitive pricing model that includes all features related to electronic signature lawfulness for shipping in Mexico. You can choose from various plans that cater to different business needs without hidden fees, making it a cost-effective solution.
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What are the benefits of using airSlate SignNow for shipping documents?
Using airSlate SignNow enhances the electronic signature lawfulness for shipping in Mexico by making the process faster and more efficient. Benefits include reduced turnaround times, increased transparency, and improved document tracking, which can signNowly enhance your shipping operations.
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Can airSlate SignNow be integrated with other shipping platforms?
Yes, airSlate SignNow is designed to integrate seamlessly with various shipping platforms, ensuring electronic signature lawfulness for shipping in Mexico is maintained throughout your workflow. This allows businesses to optimize their processes and maintain compliance effortlessly.
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Is there a mobile app available for airSlate SignNow?
Absolutely! The mobile app allows you to manage electronic signature lawfulness for shipping in Mexico on the go. You can send, sign, and track documents right from your smartphone, ensuring you have access to critical tools no matter where you are.
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when I first started looking at Mexico one of the one of the things I heard was it's very hard to find design it's very hard to find backwards and reverse engineering I heard that in Monterey where they've got the the Auto industry when I come to Guadalajara it turns out they do have this but the people that I'm speaking to from Caterpillar and you know the Monterey people and the Saltillo people don't do it so they say it doesn't you know it doesn't it doesn't exist but when I come down here yeah it exists hello everyone and welcome to the Altium on track podcast I'm your host Zach Peterson today we're speaking with Andrew Hubert professor at Holt University and a supply chain consultant he spent 20 years in Asia he's recently moved over to Mexico and he thinks that you should do the same Andrew thank you so much for joining us today great to be here Zach thanks for having me so um we don't have a lot of supply chain people or maybe not enough supply chain people on the show um but given all the events of the past couple years I think someone like yourself is very interesting to have on the show because you work Beyond just Electronics so maybe if you could tell us all what you do and a little bit about your background that would be very helpful okay um my main job is cross-cultural negotiation that's what I teach and that is how I do my job uh most of the time most of my time in Asia when I wasn't teaching business school I was training purchasing teams at places like Siemens uh Phillips um some semiconductor companies a lot of others you've never heard of but I was training Westerner Western um sorcers and what western uh procurement teams to interact with Chinese suppliers so that's how I've from from 2002 to 2012 I was living in Shanghai and I was teaching at NYU at the business school and I was training purchasing teams in 2012 um I started to Branch out a little bit I spent some time in Thailand spent some time in Vietnam doing much the same thing uh it was everything was going along just just swimmingly until covet hit and um in in one Fell Swoop I lost both you know between that and the trade War I lost both my careers I lost my China specialty devalued and uh teaching sort of went lowest common denominator online so I I think what a lot of people did after covet um sort of re you know we reshuffle the deck I didn't really start anything radically new uh I just started following my own advice I did the business environment analysis that I teach people to do uh I looked at the the strengths and weaknesses of uh of different uh different Supply chains and different business environments around the world and I chose Mexico I thought that Mexico's got some tremendous advantages especially for small and medium-sized Enterprises right now and that's really my specialty so I'm over here um sort of Paving the paving the the road you know clearing the the road for to bring over um my my old client from China who [Music] in my opinion are going to have a lot of trouble uh completing their their their their business Mission if they stay in China and try to Market and try to sell to the United States and we can talk about why but um I I don't think it's going to come as a big shock to many of your listeners well sure I I think and anybody that's listening and hears you know X China is going to come up with two or three different reasons that make sense for them um but I think probably the bigger question is why Mexico and why why maybe Latin America more broadly we've actually talked with uh someone else on the show um his name is uh case England and um he they have a facility in Taiwan and then they have a facility in Colombia and so Latin America more broadly might seem like a good opportunity if you're trying to geographically diversify your supply chain and your manufacturing base right now I am looking at the major challenge to any cross-border business as government regulation okay I see compliance cost and compliance costs are are becoming unmanageable Logistics is becoming more unpredictable and more difficult and um regulations are you know there's a transaction risk that we didn't have before 2018 when our trade War our trade war with China started uh Mexico is uniquely positioned because of you can call it nafta2 the real name is usmca the U.S Mexico Canada agreement here in Mexico we call it tmac but that puts Mexico top of the you know top of the list as far as uh production sites as far as emerging market Emerging Market candidates for large-scale factories large-scale production so yeah Latin America has a lot to offer Colombia is actually the the other thing I look at the other the other entity I pay attention to for production Latin America has a lot to offer in terms of raw materials and resources but Mexico Colombia I don't know who else I guess that's really it um have a production base that is suitable for the US the only difference you know the key difference for me is Mexico is part of that trade agreement uh the usmca after two and Mexico has the the physical border a 2 000 mile physical border with the United States 40 official ports of Entry worse comes to worse you can drive a pickup truck to your factory and and get your stuff and that was the big frustration during you know the the the second half of covid when you couldn't unload a boat right I remember hearing about uh you know a lot of uh uh shipping container uh vessels that were like stuck just parked outside of of the LA Port we're parked outside of LA and then parked outside of Shanghai it was right it was a it was a parking lot for boats and I don't expect that to happen again because of covid but hey that's a possibility and B as we'll discuss there are other things that could disrupt shipping and sure once that happens yeah the first time it happened I think it was uh 21 2021 when it first happened everyone was like this is shocking um you know we'll all pull together we'll figure this out but 2023 2024 suppliers and partners and customers aren't going to be quite as forgiving this this is in the market now we know that there are going to be Logistics problems or potentially we know that U.S and and China are you know in the state of some degree of hostility with one another and that disrupts that has the potential to disrupt to disrupt shipping um so Mexico has uh has you know a good trade agreement with the United States in my opinion it's going to be the last Trade Agreement the United States signs for quite some time um it's got the the facilities it's got the educated uh well-trained Workforce yeah there are problems with Mexico and we'll we'll talk about all of that but uh because of the proximity because of the um the the regulatory the favorable regulatory environment between the United States and Mexico uh and the cost base of producing in Mexico I think there's a lot there's a lot to look at here yeah there's a lot to unpack and what you just described um but you mentioned the trade agreement aspect which I think is probably one of the last things people have have thought about when they're looking at where to produce especially in maybe moderate volume where the trade issue can create a real you know cost differential between two different locations um 20 tariff on a lot of goods coming out of China yes yes that's going to go away anytime soon so that 20 right there um equal you know it equalizes a lot of the disadvantages of having to move production that's a hefty number so you mentioned that you think the the trade agreement with Mexico is probably the last one the U.S will sign but if if companies are looking elsewhere in Latin America do you think there would ever be any impetus to maybe develop a similar Trade Agreement like maybe with Colombia there is for me I'm a big fan of that um and if anyone at the uh you know at this who do this Trader Goods if there's anyone at uh Commerce or does anyone from the from the body Administration listening yeah we should definitely be extending uh the the usmca the the issue those I can remember I'm a negotiator and this is what I do I train negotiators the issue here is that's not within my power to negotiate that's not a variable for me it's a given it's part of the environment so yes I would love to see Nicaragua and Colombia and and Paraguay um and um uh Peru but I don't think it's going to happen there's a possibility of Colombia I I've never been to Columbia I've got to become clean here I don't know Colombia that well but on paper when I do my business environment analysis uh Columbia looks good to me but Colombia I see I I could I would definitely uh like to see um usmca Extended to include Colombia and possibly Panama possibly uh Peru but again that that's a bit that's a great thing for business people to discuss I don't think government people are discussing that sure that's understandable um so in terms of the business environment in Mexico and probably elsewhere in Latin America what are some of the challenges for any company that wants to move some of their supply chain to Mexico or maybe all of their supply chain to Mexico because when we talk Electronics manufacturing right it's more than just the circuit boards and the assembly I mean there's there's Plastics there's there's mechanical Fasteners there's sheet metal I mean you know wire and cables and the list goes on and on and design and software too uh sure yeah you know I'm plugging I'm in Guadalajara at the moment so I'm sort of plugging the uh the work I'm doing right now yeah I'm meeting with a lot of design people and I'm meeting with a lot of software people uh because Guadalajara has turned itself is in the process of turning itself into a software and Design Center um as far as supply chain as far as Electronics in in Mexico uh there's good news and bad news let's let's start with the challenges and the first challenge is supply chain and sourcing um I just had a long conversation with a designer uh this past week he said all of the pieces exist in Mexico you can find uh the the design you can find parts you can find processors but the problem is they're not in the same place and not everyone knows where they are in other words if you if you want something designed you'll come to Guadalajara they can do the backwards the reverse engineering they can use the 3D prototypes they can do look and feel they can do the complete design I said where do you have it produced he said China I said wait a minute that's not going to work where in where in Mexico can we have this done well you can go to karetoro for this sort of metal processing and you can go to Lyon for for this I think but and I contrast that with my conversations in Shenzhen where if I went to um I'm holding up my my little Bluetooth mouse if I went to a factory not a designer not a consultant if I just showed up at the factory and said I want to produce this but I don't know how to do it by the time I got up and left the meeting with it from that factory manager in Shenzhen he would have arranged my entire sourcing plan I might not have the molds I might not have intellectual property I might be stuck with him forever that's a different issue but he would know Within by the end of business that day where to Source everything that is something that is a challenge here in Mexico uh so things are going to things take a little bit longer to arrange for for just that reason also at the very high end of the semiconductor level you're not really going to find you you might not find the talent in Mexico that you would be able to access in in Asia this is really interesting because you know you're it it sounds like in Shenzhen if you were to talk to that same same person um they they have a list of people in their back pocket that they know they can call I can call this company for the design this company for the the plastic the enclosure so on and so forth and they they just have this list probably because they deal with it so much is that fair to say it's because they have to deal with it so much that they've been like economically forced into having that list ready to go on a moment's notice it's it's also a matter of policy and a matter of culture on a policy level China put all the manufacturing in one place this was a plan you know the the whole rise of China from you know I first started going to China in in 1996 because I'm old um so when I first went to China there was a Guangdong special economic zone Shenzhen special I was a special economic and you need a special Pat there's a special passport to get in you couldn't leave the Zone uh and they were already building and re-rehabilitating uh older factories this was always the plan to put everything in one place now you in addition uh Chinese culture Chinese business culture uh puts a premium on guanchi on your connections you're supposed to have really good networks that that for for a Chinese business person that is just a sign of competence they like that and then you know if this predates predates um WeChat and all the social social numbers they all when I first went to China it was free social media and it was still a big deal um I was interested I worked for an electronics company uh on the ground in like 2002 and I was introduced to someone who said he used to be in the Army he has very very good connections that was his qualification for being one of the senior partners he was he just knew people he knew people knew people who knew who knew people Mexico is just the opposite Mexico smart people keep their mouths shut it's a family business the culturally speaking business here was organized around family units the the the the the Father the patron ran the business all decisions went through him and if you're a smart business person you present the boss with the information he needs and that's it he makes the decisions so the idea of building a really broad Network um it's more of a family thing or a relationship it's a pure relationship thing here in Mexico whereas in China it's more of a business thing so in in Mexico once you break into that Network everyone knows everyone but if you're an outsider you're an outsider that's really interesting because I I think if you uh if you think about what was happening with electronics production you know 40 years ago uh everybody had like a captive production or supply chain and so because of that I think at some point everyone was Reinventing the wheel as far as what they had to build and the specialty and so at some point it made sense to have like EMS companies that just were good at production and to build out that kind of network like that and it doesn't sound like that same culture of specialization and building these kind of Highly specialized Services really exists in Mexico is that a fair way to look at it Mexico multiple economies um as the the the SME level at the the small and medium-sized Enterprises you've got two types of of Mexican business one is the craft oriented simple material non-electronics business they make furniture they they make you know tables and chairs that's the example I'm always given um they're very very good at what they do they put a premium on craftsmanship they do not put a premium on production and efficiency so when you come to Mexico uh the level of workmanship is very very high the level of project management is very very low and this is you know one of the things I'm one of the things I'm here for um this someone is going to develop this uh I'm putting it together there are other people who are putting together these these networks that are you know in in Asia and in China these these networks were just sort of part of the environment they were given here there is a great deal it's siled that's the expression the the the term I use so someone in uh Guadalajara will know everything about Guadalajara but he won't know anything about what's happening in Lyon a few a few hundred miles to the west where they're doing all the electronics production for medical devices or in Korea where they're doing all the sophisticated electronics for uh the Aerospace industry or along the border where they're making cars and autos well I mean you know better than I nowadays A car is just an electron a series of electronics devices with wheels so the know-how is here but it is siled within companies and within cities so we're within regions so every region has its own is developing its own specialty but what what hasn't happened yet is that we haven't built uh there wasn't the Alibaba of of Mexico this is like the holy grail for for uh people I talk to everyone wants the Alibaba of alibaba.com of uh of Mexico and it just it doesn't exist I don't know if it ever will so that was that was one thing I was I was just wondering is is the challenge because these like pervasive marketplaces where anybody can join and offer products and services don't exist and you brought up Alibaba of Mexico I think if you had that or like the digikey of Mexico if you want to focus specifically on electronics and you can go into other Industries as well I think that would make a lot of sense but I wonder if that kind of service is the type of thing where if you build it they will come and if there's a cultural barrier to that kind of networking um in among different players in a particular industry maybe if you build it they won't come um the customers will come will the will will the fact you know will the the uh the factories come that that's what I mean yeah that brings us to another issue um right now there is not that much contract Manufacturing in Mexico and the contract manufacturing that exists is like Flextronics they're coming from overseas they're coming from the U.S and more and more they're coming from China which is going to be the wild card here because that might fix things in a way we don't want them to be fixed but uh it's a possibility there isn't a native Mexican version of um uh Foxconn or Electronics it's all coming from overseas they don't particularly like that business the I mentioned before there were two there were multiple economies let's switch uh the focus to the the big Advanced production uh these are well let's use the Auto industry because that's really what built the this kind of business in Mexico uh the auto the American automakers have been producing in Mexico for like 70 or 80 years it goes way back a fact on auto Factory in Mexico looks just like an auto Factory in the United States that happens to be in Mexico they have it looks the same they have ISO 9 000 9001 whatever your ISO you want um they are they they all talk about being Six Sigma Black belts and following the Toyota way or the caterpillar away or the GM way uh and they were really into it they are on this a Mexican Factory manager is on the same org chart as HQ which is a huge operational difference from trying to build in China where you've got a 12 hour time difference and a big big culture Gap um you know here it's it's when I'm talking to you from Mexico uh from Mexico we're in the same time zone pretty much in the old days one of us would be losing sleep right now if I were in China because there's a 12 hour or 11 hour time difference so these American or these International multinational companies do that again these multinational factories that are being built now are cutting edge they are really really good at what they do but their supply chain is not dependent on Mexico their supply chain is global so they're bringing in containers of of everything they need and it is not having a huge impact on the contract manufacturing business in in um in Mexico when the Chinese come in that may change it may not change that remains to be seen but so far the contract manufacturing that does exist here is large scale for servicing that multinational that's sophisticated large-scale multinational production effort so it's not working its way down you can't go shopping for electronic parts like you could in China you know I wonder if uh it would take like a Foxconn or a TTM to come in and set up shop with electronics production and probably a lot of other uh you know ancillary uh components that go into Electronics assemblies as well to really drive the native uh group of companies to get out of that siloing that they do I I think on on some level I understand it because it's kind of this mentality of like you know we worked hard to build our relationships and our capacity and our capabilities and we don't want to interface with anybody else because someone else might take that from us so I I kind of get that mentality but at some point if you really want to scale you have to team up with other companies and you have to develop those supplier relationships I agree with you I feel the same way um unfortunately a lot of Mexican Factory owners do not yet but I'm pretty sure that that tide is turning it's turning here a little bit because we have you know on the on the design side when I first started looking at Mexico one of the one of the things I heard was it's very hard to find design it's very hard to find backwards and reverse engineering I heard that in Monterey where they've got the the Auto industry when I come to Guadalajara it turns out they do have this but the people that I'm speaking to from Caterpillar and you know the Monterey people and the Saltillo people don't do it so they say it doesn't you know it doesn't it doesn't exist but when I come down here yeah it exists so I had lunch with the other day I had lunch with a guy who does reverse engineering and 3D prototypes so someone's gonna put the pieces together it might end up being me or someone like me or it could be Foxconn or and Flextronics Plantronics um or it could be the the the next gen of um of Mexican entrepreneurs yeah I that's another kind of wild card here is if the next generation of entrepreneurs maybe see what happens in other countries and other cultures and then they say hey getting out of your Silo is actually very valuable especially if you're running a manufacturing operation and you want to scale it and then they start to undergo that you know networking and marketing kind of you know initiative to try and and Link all these different companies together and eventually maybe become that broker that knows where all those different services are and can work with a an oem let's say or maybe a company that wants to produce a moderate volume in Mexico and provide all those Solutions well that brings up an interesting point the whole concept of OEM and contract manufacturing is a little bit different here um when Mexicans talk about OEM they are it looks to me a lot like a wholly owned subsidiary there's a little bit of a a different difference in the phrasing they don't really like con until up until recently up until now they haven't really liked contract manufacturing um because it's go it's contrary to the way the the two ways they do business from a craft you know from the Craftsman Workshop type type uh um type setup they don't like it because it's too variable and from the you know they just they say no I don't want to ramp up and they'll look it right in the eye and say no I don't want I don't want any more business which coming from Asia is very strange to hear but here they have more coming from America it's very strange to hear all right good too um they they but they have that Craftsman approach in the family business approach On The Other Extreme uh I'm talking to these Factory managers who could definitely do it but these guys were trained by General Motors or they were trained by caterpillar if they don't have an entire end-to-end production plan including a bill of materials and a budget and a sort you know sourcing they'll walk away they say no you don't have a product you've got a mark You're a marketer you're not a producer and again coming from the north coming where it was uh recently coming from Monterey that's that's the insult you're not you don't have you're not a manufacturer you're a marketer in Asia that's okay it's actually good they like that because it enables them to dual you know use their their Network to do all the design work in Mexico they don't like that because they're basically you know you know Detroit or Irving Texas or you know they're trained to be Factory managers they are not trained to be marketers or so that I guess I guess that puts the burden on the customer if it's let's say it's a small meeting business they want to produce moderate volume assemblies in Mexico they have to go through and find all of those different people figure out the logistics how you're going to get you know let's say it's boards how you can get boards from one Factory over to the assembler how are you going to get the the chips over there where are you going to get the Plastics the Fasteners the cables all of that stuff okay true but with one added twist you're expected to do the the assembly or production work yourself Mexico yeah Mexico is set up for to build factories okay so that's a big big difference uh when you go to some when you go to um you know you talk about entering the Mexican uh the Mexican market for production they are going to ask you how big your factory how much space you need how many you know square feet you need for your factory and that's what it's set up for um like I said Flextronics is here in in this town and there's a lot of design work in this town they have they've been the people who've done traditionally done uh design for for products including Electronics have done the design here and then sent the sent the work over to Taiwan or China for production that is changing but the the assumption is still that you will set up your own Factory at least for assembly and Mexico is set up for that they have I told you about the the um usmca the the new NAFTA well Mexico has something on the other side called emacs and if um you want to bring in equipment you want to bring in materials you want to bring in um you know raw materials or components you can bring all of it in duty free provided provided you ship it out they don't whatever you make it out um sorry whatever you make whatever you make you have to ship it out well for all for export they don't want you selling into the Mexican market it's called sometimes it's called a shelter organization a shelter system because they have a law a set of laws that makes everything you do tariff free low or no Duty or rebate the the the the um the value-added tax that you have to pay it's um it's it's set up for for the um production that gets exported it's very strange because I mean if you're if you're producing let's say you're producing the next I'll use the iPhone we always use that as an example let's say you're producing the next iPhone like you want to sell that internationally wouldn't you want to sell some of those to to Mexican citizens I mean you can even if you produce it here you can but you'll be paying a tariff or you'll be paying duties I shouldn't say tired you'll be paying duties on every on all the materials just like a regular a regular product this is an incentive they like export for for Mexico and we'll this this could be a good lead into Mexican government policy um Mexican government likes employ high employment they like new technology and they like protecting their domestic Market so that's that's what I was thinking yeah it's all about protecting the domestic manufacturer who is going to be allowed to sell locally so you know you you American company that's producing all these you know electronic devices you got to ship them out because there might be a Mexican producer that's producing the same thing and we want to make sure Mexican money gets spent on something produced in Mexico and keeps the money in the economy that seeing that that's the logic that governs uh that governs Mexico Mexico is um much more willing to adjust the market they nationalize stuff uh they have a lot of policies that are not very pro-business at the at the national level on the state Municipal level they they're much more pro pro industry and much more pro-business and that's where the interesting things are happening which is but that leads to more of this siloing because the infrastructure in Monterey is very very different from the than the infrastructure and the legal structure in places like Leon where it's a little bit rougher I see so there's a lot of very there's a lot of variants within the with from different different business centers in in Mexico well I suppose if if you're planning to geographically diversify your electronics manufacturing base and supply chain you know initially Mexico looks really cool because it's got you know water on both sides of the country so shipping is easier and then of course you've got one big huge End Market just to the north of you United States and then of course Canada but um a lot of these challenges uh really have to play into the business strategy if that's really going to be your plan it's it it sounds like this is only going to be something where maybe it's an American company selling in the American Market that is trying to diversify themselves away from whatever centralized situation they're in in Asia and maybe that's the strategy that makes the most sense you've got three things to consider yes simple answer yes um number one you don't have to move you're not required to move a hundred percent of your production out of China or out of Asia into Mexico has uh because of the the the the cost basis here it still makes sense as a transshipment point it still makes sense as uh you know for assembly and packaging and processing and and shipping uh so so maybe you do the boards in China and you ship the semiconductors from the US to your assembly plant in Mexico you assemble it in Mexico then you export it back to the U.S and Europe and and Australia wherever else that's that's one possibility the second possibility that I'm just trying to see and I have a lot of I'm very interested in this one don't forget you've got a very sophisticated uh production and electronics pay uh design base in the United States so sure like Texas where tsmc or gsmg setting up in Arizona but places like like Texas and Arizona and California are also right across the border and there is a lot of you know Hopscotch if you go back and forth Mexico is really good at design really good at assembly um they've got the right cost structure uh Mexico has you know there are a lot of problems with the infrastructure in Mexico but roads airports uh Rail and you know regular ports are not the problem it's very easy to ship it's very easy to move stuff around and every you know all the the production centers you see here uh in Mexico are all on major highways and if you're making in in Monterey we're talking about two hours to Laredo I think it's only two hours or to Brownsville uh it's two hours to the Border and if you're a Tijuana and uh Juarez they're they're even closer so and they've got laws so that the trucks get preferential treatment they can just drive across there's a no there's a Zone within 25 miles of the border on either side and the trucks don't really have to stop so it's set up for this Mexico is set up for this kind of production um but the two caveats are one you need your own Factory and two you have to know where stuff is yeah makes sense makes sense so the two the the the the scenarios I'm discussing with people are one um moving transitioning gradually into into a Mexican production base so you're not just pulling up Stakes you're not burning you know burning your your factory in uh China or in Vietnam to the ground you're still going to import components but the the low Tech the lower Tech stuff can be done probably better here in Mexico so you can transition uh the other thing that we we can use Mexico for is uh the shift from just in time Inventory management to just in case Inventory management and you can warehouse and store and you know accumulate you keep your your your uh your stock here in Mexico so that if those votes stop moving between Ningbo and Los Angeles you you can still do business you won't have empty shelves uh and you're you're at your customer store like we saw during the I think was 21. during the yeah makes sense I totally ramp up your your Mexican production yeah I think maybe the other the other instance here is you know you're right I think companies aren't totally you know burning their factories to the ground as you said in Asia but if they're planning something new and they're going to keep that other Factory online maybe this is a location that makes a lot of sense for some of the reasons you cited that's a good a good way to look at it yeah don't forget you we're so close to the customer that you can make changes um you know almost real time whereas if you're trying to make changes to your design in in China or in Vietnam you get like a two-month lag because of because of the shipping yes that's a good point I now I think anyone that follows the news and maybe follows like a deglobalization hashtag even on social networks um they have probably heard of uh Apple moving uh some of their production to India and have probably thought well if Apple's doing it then maybe I should do it too okay um the folks at Folks at Apple are smart people and I I don't think they would move to to India if they thought there was going to be problems producing Electronics so um that brings up the question does India also make sense if your goal as a company is to geographically diversify your your production and your supply chain India is good India seems to be a really good option for a lot of people but uh there are a couple of downsides on India that we have to talk about everyone's here okay um India does not I'm always wary of using Apple and Samsung as our as our our test case because these these people are you know Tesla just I I understand but they're they're like the big ones that are visible and so people look at them and I think it's easy to to kind of boil down their strategy to maybe something that might work sense at a smaller level I agree with you that it doesn't always make sense India can be difficult um maybe it's gotten better since I I have my encounters India is not hasn't been and remember I do International negotiation uh as my job India is a tough one uh it's tough to manage uh the government is difficult the the labor situation is is better but they have uh unions and they have um vocal proponents of their own interests um it doesn't it's a it's a it's it's tough to manage and it doesn't really cure all your geopolitical ills you know there's sure it's um but maybe if you maybe if you wanted to produce closer to Europe if you're selling into the European market does India make sense is India like the Mexico equivalent for Europe um no I think Eastern Europe is well okay okay so so maybe Serbia would be better for for or Poland um India is um an option but again it doesn't really you know right now I'm worried about political risk and geopolitical risk and India is not going it's going to be a half step thing is yeah I put India in the same category as Vietnam if you've already done your negotiations if you have a plant or you have a relationship already fine it's it will serve you well for a while but uh in you know we live in very very unsettled geopolitical times and there are a lot of there's a lot of there's a lot that can go wrong so yeah India if if you know I I've nothing against India I mean I'm not going to raise any red flags there uh like in China I know things are going to be bad I know because I've been going on India I I'm I'm I'm more of a wait and see kind of guy um I know that India is is wants the the business I don't know for sure that they can do the business and I'm not sure that in a year or two we won't be having similar problems with India that we're having with China well you just mentioned that that you know China would be bad from the cost perspectives I think you said you know costs are going to go up and that's just been the broader Trend regardless um I think India when people look at India they'd say Well India makes sense for the technical skills but I think as the technical skills have gone up that also pushes the cost up so at some point you're not necessarily looking at India as the lower cost option there's got to be something else there that causes you to put your new production or assembly facility in India and maybe the contrast is you know can I actually sell into India if I'm going to put a factory in India is that going to be allowed whereas Mexico you can't really do that without paying duties um I'm not 100 sure what the situation is like in India the population's big they're not I don't know the size of the middle class there um in Mexico the middle class is growing um to the point where costs are going up we're starting to have a little bit too much of a good thing here in Mexico there is a middle class Market that's developing they are used to paying the duty here they're used to you know right now they're it's either iPhones or Oppo or or you know the Chinese Brands the Chinese Brands pretty much own the market uh the non-apple the non-iphone market uh here in Mobile um I don't know as far as production goes uh I think as far as I'm concerned the jury is still out on India because I haven't heard I've heard good things but I don't know if um if the verdict is in yet uh on Mexico I know that on Mexico I know that sophisticated uh multinational you know sophisticated multinational factories are producing at the same quality as they are in the United States okay well that's comforting because that's another another issue that comes up is is quality control and you know that's another news item that came out with you know Apple moving production to India's they were having some quality issues yeah so I think if you have that culture of quality like you have in Mexico um it makes it a lot easier to move production there or plan new production there and be able to sleep at night yeah that that's a known you know that's a given that's that that's that's known uh when GM sets up a plant here or when caterpillar sets up a plant here it's uh the the the the the expectation is that uh quality will be within the U.S within the US tolerances I think it's GM has moved all their their uh EV stuff down the electric vehicle stuff down here these are are Cutting Edge factories that GM is building I think it's GM you know GM is doing the the construction by their own standards you know with with people they know so it's not going to be as much of a question mark As as India seems to be but that being said I've heard good things about India as far as their quality of the factors I just haven't seen it I don't think it's really a known quantity yet um and the distance you know the distance bothers me sure sure well we're running a little low on time but um I think it's maybe a final thought I just wanted to ask you um what would be some advice given all of the stuff that we've talked about what would be some advice that you would give to companies that are maybe planning new production in one of these areas that we have mentioned or just planning to geographically diversify generally whether it's Electronics or whether it's part of all of the the components that go into their assemblies um time is not on your side it's already late it's okay uh that's what I would say um in in many parts of Mexico uh they're at capacity already don't forget the multinationals have been doing this for for five years at least the multinationals have been you know splitting their supply chain there's now a U.S block supply chain and a China block supply chain uh and the the Western you know the big multinationals have already taken up a lot of capacity uh and you know they're building from the ground up here in Mexico and they don't even have enough land to build on uh I know from my time in Vietnam they're not really looking to build small factories Samsung um was able to you know create but they had to build their own port but Samsung was able to set up a giant operation in Vietnam I don't know that there's not much excess capacity for um for contract Manufacturing in Vietnam going forward um India I'm not sure of Thailand I know is is not um it's not as flexible as it used to be people have been moving out of China and you know they've been doing that anyway because of costing but since 2018 when our our trade you know our trade War our trade kerfuffle started to develop um you know the multinationals had you know made the adjustments and a lot of larger companies have already made the adjustment so if you're still like saying well maybe Vietnam or maybe Mexico I would invest in in a couple of plane tickets and I would in I would investigate and I would start the second thing I would say for the smes and for the small and medium-sized businesses is develop a transitional strategy figure out a way to get your your foot in the door I would prefer it to be Mexico but even Vietnam you're going to have this you're going to run into the same issues where it's not going it's not going to be a quick adjustment it's not going to be a matter of weeks you know to to transition into Mexico in a meaningful way you're looking at six months to two years I don't know the situation in India but I would be surprised if everything was finalized uh without incident um yeah this is going to be I think for a lot of especially American companies still running Supply chains through China um they're not re they think everything is going to run on China time they think everything is running on Shen's end time and the rest of the world just doesn't work that way so it's already late in the day figure out a transitional strategy and do a business environment analysis to figure out what is right for you don't listen to the first you know don't stop at the first uh the first piece of news because again China is one of the most over analyzed markets and one of the most over covered uh economies in the history of the world but once you leave China it's very hard to get to get uh usable business intelligence on these other places and this is one of the things I've been finding in Mexico it's very hard to get business intelligence on Mexico that's one of the things people have me doing and um it's uh no one else no one's ever going to be the factory of the world the way Shenzhen and Guangdong were uh where you could just show up at the Canton Fair and spend a couple of a couple of days uh in this giant trade show and walk out with all your supply chain taken care of that doesn't happen anywhere else and it certainly doesn't happen in Mexico so time is on your side you need a transition a transition plan and um your gonna have to put in some legwork or hire someone who might work yeah well I think that's all very excellent advice and um hopefully as these Trends continue and as the situation globally develops we can have you back on to discuss more of these issues good hopefully we'll see you down here in Mexico sometime soon well thank you very much uh to everyone that's out there listening we've been talking with Andrew Hubert professor at Holt University and supply chain consultant if you're watching on YouTube make sure to hit the Subscribe button and you'll be able to keep up with all of our tutorials and episodes as they come out and last but not least don't stop learning stay on track and we will see you next time [Music] thank you [Music]
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