Amid the geopolitical flow and the re -calibration of the supply chain, companies are increasingly weighing strategies close to the desire without cutting ties completely with China.
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“Many companies have adopted” China +1 “or, repeatedly,” China+many ” – maintaining strategic relations with Chinese suppliers while building capacity in alternative areas such as Mexico, Vietnam or Eastern Europe”, the administrative director of Mia in Latin America, Ivan Hernandez has been clarified.
The logical basis behind this double approach lies in the confluence of factors: “cost, infrastructure, geopolitical risks, proximity to the main markets, and supplier performance data,” he explained.
While some industries convert operations into low -risk sites or closer to home, others remain deeply linked to the ecosystems of mature manufacturing in China. Hernandez referred to the electronics sector as a major example: “For some sectors, such as electronics, China remains indispensable because of its maturity in the ecosystem – although large brands have begun to increase production elsewhere in Asia, such as Apple’s iPhone manufacturing in India.”
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For industries like Toys, dependence on Chinese manufacturing is still absolute. Hernandez pointed out that “a recent poll of QIMA, 97 percent of companies in the game sector said that China was among the three best main suppliers.” “The American Games Association indicates that 80 percent of the games sold in the United States are made in China.” This firm dependency makes diversification not only complicated, but economically stressful. “The creation of production in new areas is an expensive and intense process of time, so companies in such sectors have no choice to exit from China overnight.”
Geopolitical shock waves
While the Covid-19s was the initial tremor that revealed the fragility of the excessive supply chains that focused, the continuation of global conflicts kept companies at maximum alert.
“Five years ago, Covid-19 was a huge vigil invitation to supply chains, highlighting the risk of laying all eggs in one basket,” he remembers. This awakening has now become a guidance principle. “Diversification is not new – but the new highlands of geopolitical instability accelerate this trend.”
“After years of managing the supply chain” in a timely manner, the “JUST In-Scase” option again. Companies now see repetition and geographical flexibility as efficiency, but as insurance connections, “added.
Whether the war is in Ukraine, US -Chinese tensions, or turmoil in the Red Sea, these flash points affect corporate strategies on a basic level. Hernandez stated: “Both the war of Russia, Krin, commercial tensions between the United States of China and red marine turmoil have confirmed the cost of excessive focus in any region,” which shows that geographical diversification is no longer optional but the necessity of work.
Mexico moment
While companies seek alternatives to Asia, Mexico is increasingly placed as a close power – for a good reason. “Mexico has benefited from its proximity to the United States, the skilled workforce, and commercial agreements such as USMCA, which, even under the volatile trade policies of the current administration, have not yet spared the worst tariff,” Hernandez explained.
Unlike other emerging production centers, Mexico provides a unique suggestion of value: a mixture of cost efficiency and logistical synergy. “It provides competitive manufacturing costs and increasingly strong logistical structure,” he continued. Besides the infrastructure, the cultural and operational proximity to the United States adds to the call. “North American companies are Mexico as an alignment partner from a time area, which speeds up decision -making and delivery.”
This is not just a theoretical transformation – it is supported by data. “In a recent survey, Keima found that US -based companies are Mexico as an important supply chain like local suppliers,” Hernandez revealed.
Hard Rudd Home
Change production near the house may seem like a hard medicine for issues today, but Hernandez was fast to refer to operational obstacles: “The challenges include limited suppliers, quality contradictions, and lack of experience in local compliance.”
To address these gaps, companies take a gradual and support approach. He explains: “Companies gradually relieves risk on board new suppliers, investing in training programs, and benefiting from third -party audits to measure performance and ensuring fixed standards.” However, even in Mexico, risk mitigating comes with its own challenges, especially about security. Hernandez said: “Companies must also navigate the increasing risks related to organized crimes and drug trafficking,” Hernandez said.
