Barbie, Mattel, and Near-Shoring

Barbie, Mattel, and Near-Shoring
Mattel, like many companies, are bringing some production back to North America, while also maintain production in Asia. Mattel has consolidated its North American manufacturing operations into a single factory in Monterrey, Mexico. However, Barbie is still made in Indonesia and China.
Demand is hard to forecast and geopolitics are unstable. Manufacturers need to be global and local at the same time despite added complexity to supply chains.
The primary reason to onshore production is for flexibility rather than to decouple from China. Near shoring allows companies to be more responsive to changes in consumer demand. Low cost production can be sent to Asia.
Mexico has the advantage of neighboring the United States. Demand for a product in America can be measured, then production can be tuned accordingly in Mexico, and the product can be quickly transported to the United States for distribution. It also benefits from a free trade agreement which allows the flow of goods.
Labor costs in Mexico are somewhat competitive to South-East Asia.
The infrastructure in China is superior to Mexico.
The recent influx of investment and manufacturers into Monterrey, Mexico will Lilley put a strain on infrastructure like roads and housing.
Hopefully the local and federal authorities in Mexico will recognize the demand and need for more robust infrastructure to support manufacturing in Mexico.
Works Cited:
https://www.reuters.com/business/retail-consumer/toymaker-mattel-expands-mexican-plant-nearshoring-push-2022-04-01/
https://www.brookings.edu/blog/up-front/2023/02/27/mexico-at-the-crossroads-the-golden-opportunity-of-nearshoring-and-energy-policy-as-its-achilles-heel-under-usmca/
https://www.economist.com/business/2023/03/23/what-barbie-tells-you-about-near-shoring

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