Although there are manufacturing locations that offer lower cost labor than Mexico, it is wise, however, to make certain to examine all pertinent expense factors when determining where to site a manufacturing facility. Items to consider include:

• The cost of lost intellectual property
• The cost of additional inventory of goods in transit over long distances.
• The cost of additional safety stocks to ensure uninterrupted supply
• The cost of expensive expedited shipments.
• The cost of warranty claims, if a new facility or supplier has a long learning curve.
• The cost of engineer visits or resident engineers to get manufacturing processes right.
• The cost of senior executive visits to set up operations or to straighten out relationships with managers and suppliers operating in an alien business environment.
• The cost of out-of-stocks and lost sales caused by long lead times.
• The cost of remaindered goods or of scrapped stocks, ordered to a long range forecast that is never actually needed.
• The potential cost of your supplier becoming your competitor.
• Connectivity costs of many sorts in managing product hand-offs and information flows in highly complex supply chains across long distances in countries with different business practices.

Communication with Mexico is easier, closer, less expensive and quicker. Fewer time zones to cross makes connectivity between U.S. and foreign staff more effective and efficient. A location in Mexico means that travel time for product is measured in hours, not weeks. Additionally, shipping to and from Mexico is more economical, and allows US and Canadian firms to base their support centers (and the accompanying jobs) in North America.