Medical Device Manufacturing in Mexico
Medical device manufacturers view Mexico as a cost-effective nearshore location of choice for the fabrication of products that range from medical apparel to disposable devices and technically sophisticated precision instruments.
Manufacturers in Mexico shipped a total value of $5.2 billion worth of medical devices to the United States in 2008. This amount represents an almost 100 percent increase in product volume when compared with the value of items that were shipped in 2003. The United States consumes 92% of Mexico’s medical device exports, while current exports of medical devices from Mexico to the U.S. outpace those originating from China by a 2:1 ratio.
Recently, a study that was conducted by Princeton, N.J. – based Boyd Company, Inc. compared overall costs in labor, utilities, land, taxes and transportation for a hypothetical 325 person, 175,000 square foot medical device production plant.
When compared with the costs in several U.S. cities, Mexico proved itself to an attractive economic alternative.
Costs in some of the U.S. cities included in the study were calculated as follows:
- San Jose/Palo Alto, CA $30.7 million
- Fairfield, CT $29.3 million
- Manchester, NH $27.6 million
- Sioux Falls, SD $22.6 million
Boyd Company’s calculation for the cost of such a plant, when sited in Mexico, to be about $17 million.
Mexico medical device manufacturers benefit not only in terms of cost, but also enjoy:
- Shorter supply chain supports a lower total delivered cost
- Reduced working capital (inventory) supporting ROIC objectives
- Shorter time to market resulting in shorter time to commercialization
- Proximity to sources of technical support and markets that require customized production.