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Is Nearshoring to Mexico Hitting a Wall? MES Offers Solutions for Resilient Supply Chains

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MES offers solutions for companies facing challenges with nearshoring in Mexico. The rising peso, high borrowing costs, inflation, and labor shortages are impacting Mexican suppliers. MES’s expertise in sourcing and supply chain management can help North American companies navigate these complexities and build resilient nearshoring strategies.

LEWIS CENTER, Ohio, Oct. 7, 2024 /PRNewswire-PRWeb/ — As a manufacturer based in Mexico, you were excited to hear about the benefits of nearshoring. The idea of relocating your operations closer to home and taking advantage of lower costs and quicker delivery times was too good to pass up. However, as the year 2025 approaches, you find yourself facing unexpected challenges that are stalling your nearshoring initiative.

MES is committed to helping North American companies achieve their nearshoring goals in Mexico. Our expertise in sourcing and supply chain management can help navigate the challenges and build resilient partnerships.

With the strained relationship between the US and China post-COVID, many manufacturers are focusing on nearshoring, often moving operations to Mexico. However, across various manufacturing processes—plastics molding, extrusions, castings (aluminum and iron), forgings, rubber, and chemicals—Mexico’s capacity falls short of North American market demands.

1.) USD to Pesos Exchange Rate: Most surveyed suppliers conduct over 90% of their business in USD. For the past decade, this has helped Mexican businesses combat inflation as the peso weakened. Recently, the peso has strengthened, likely due to the significant investments being made in Mexico. This shift has pressured prices and sales contracted between 2015 and 2023. For instance, a contract negotiated at an exchange rate of 20 with an annual value of $1 million now brings in only $700,000 due to the exchange rate change to 17 in 2023. This situation is beyond the suppliers’ control.

2.) High Borrowing Costs: Mexico’s borrowing interest rate is at a generational high. The costs of borrowing have increased significantly, and stricter underwriting has tightened credit lines. Many real estate and other loans are tied to USD, adding pressure on suppliers. If debt was written in USD instead of pesos, suppliers are paying 15% more for debt service due to exchange rate changes, in addition to a 5% interest rate increase. Suppliers with even minimal debt are struggling with payables, labor, and energy costs.

3.) Inflation in Mexico: The Big Mac Index, a proxy for inflation, indicates a significant rise in costs within Mexico. The majority party has implemented generous labor policies to improve living standards, and their recent election victory suggests these inflationary policies will continue, along with increased labor subsidies.

4.) Rising Labor Costs: From 2008 to 2021, inflation in Mexico was modest, and labor costs remained manageable, ranging from $6 to $8.50 per hour. The Labor Index rose from 58.09 to just over 100 in 2020 and has doubled in the past three years, putting additional pressure on manufacturers. Growth in delivery and e-commerce jobs offers similar incomes, making many young people reluctant to take manufacturing jobs.

Conclusion

Mexican manufacturers are becoming hesitant to provide long-term pricing, which is essential for Fortune 500 companies’ planning. They are also passing on labor and energy costs. If your Mexican supplier is unwilling to negotiate, giving capacity to other customers, or unable to meet delivery requirements, financial and labor issues are likely at the core.

North American customers should be empathetic towards these manufacturers. Sourcing and supply chain companies like MES have developed creative ways of working with suppliers that larger companies may not match. Contact us at sales@mesinc.net to discuss how we can help you navigate Mexico sourcing and supply chain challenges, leveraging a range of supplier engagement methods for resilient nearshoring solutions.

Over two-thirds of executives interviewed by McKinsey and other consulting groups have listed nearshoring as a top initiative. Investments in greenfield manufacturing setups and supplier development in Mexico are increasing. Despite these efforts, there are significant challenges facing Mexican manufacturing and its supply base.

Media Contact

Zach Hamner, MES Inc, 6143075159, zhamner@mesinc.net, www.mesinc.net

View original content:https://www.prweb.com/releases/is-nearshoring-to-mexico-hitting-a-wall-mes-offers-solutions-for-resilient-supply-chains-302245086.html

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Adyen appoints Ben Wong as General Manager, Southeast Asia and Hong Kong

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SINGAPORE, Oct. 7, 2024 /PRNewswire/ — Adyen, the global financial technology platform of choice for leading businesses, today announces the appointment of Ben Wong as General Manager, Southeast Asia and Hong Kong. In his new role, Ben will oversee the company’s commercial operations in the region, focusing on growth strategies and strengthening partnerships in key markets like Singapore, Malaysia and Hong Kong.

A Singaporean native, Ben joined Adyen in 2016 in a technical role where he acted as a technology consultant to deliver strategic counsel to enterprises, at a time when the payments industry was in its nascency. Since making the switch to sales in 2017, Ben has led the company to major successes across retail, ecommerce, hospitality industries. His technical acumen, coupled with a deep understanding of the market and merchants’ needs has also allowed him to guide the commercial teams to deliver cross-channel payments excellence to businesses in Singapore.

Prior to Adyen, Ben spent half a decade working in fintech, information technology and project management. His tenure at previous organizations built a strong foundation for technical expertise and problem-solving skills in the fast-evolving payments industry.

“We are thrilled to have Ben in this new role, bringing his expertise and insights from working with customers in different sectors to the broader region,” said Warren Hayashi, President, Asia Pacific at Adyen. “Singapore, Malaysia and Hong Kong have been pivotal markets for us and with Ben’s demonstrated experience in Adyen, we are confident that he will lead the region to address the ever-evolving needs of our customers.”

“I am honored to step into this new role and contribute to Adyen’s continued growth,” said Ben Wong, General Manager, Southeast Asia and Hong Kong at Adyen. “My deep roots in the industry fuel my drive for creating exceptional experiences for consumers and building strong, lasting partnerships with our customers. I look forward to driving the business forward and achieving sustained growth for our customers and us in a region filled with immense potential.”

About Adyen

Adyen (AMS: ADYEN) is the financial technology platform of choice for leading companies. By providing end-to-end payments capabilities, data-driven insights, and financial products in a single global solution, Adyen helps businesses achieve their ambitions faster. With offices around the world, Adyen works with the likes of Meta, LVMH, SHEIN, Uber, L’Oréal, Cathay Pacific, Grab, Klook, and Singapore Airlines. For more information, visit adyen.com.

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CogX Unveils Innovative Knowledge Networking Platform, Proxxi AI, at the CogX Leadership Summit

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New platform uses pioneering “Expert-in-the-Loop” model that matches questions from users with the best specialists to answer them – all assisted by state-of-the-art AI

LONDON, Oct. 7, 2024 /PRNewswire/ — CogX Group Ltd, the tech community and online platforms group, which brings together the sector’s leaders and innovators from across the world, will showcase today its new knowledge networking platform, Proxxi AI, an “expert-in-the-loop” model that connects users and specialists to provide bespoke answers to their questions, assisted by state-of-the art AI.

Proxxi AI will be unveiled later at CogX’s London Leadership Summit at the historic Royal Albert Hall. Proxxi AI understands user questions, identifies the best available experts, assists them with answers based on their own trained “proxxi”, and features a broad range of subjects to deliver the best of AI, but with human oversight.

The live stream of the Summit will be available on YouTube from 10 am here.

Proxxi AI aims to play a leading role within a global knowledge management marketplace projected to grow beyond $1 trillion by 2026 (MarketsandMarkets), with organisations seeking faster, reliable, and lower-cost ways to access expertise and stay ahead of the curve.

Employing the latest large language models (LLMs), Proxxi AI will continuously learn and improve each expert’s proxxi and ranking. The platform will initially be accessed via Slack, Teams, and the CogX Insights app. Shortly after it will be available via API for web and mobile app developers. It supports a broad range of use cases for startups and enterprises, governments, universities and research institutions.

CogX will be demonstrating Proxxi AI at today’s Leadership Summit throughout the day.

Also announced today is the organisation of CogX’s businesses — CogX Ltd (UK Events and the CogX Insights app) and Proxxi AI (Knowledge Network)— under CogX Group Ltd  enabling the community to connect both in-person at our events, and through its two online platforms.

Charlie Muirhead, Founder and CEO of CogX, said:

“CogX’s mission is to convene our community to address the question: How do we get the next 10 years right?  To do so, we need to connect the right people to the right expertise, just when they need it.

So we’re hugely excited to be sharing Proxxi AI today at the Leadership Summit, which will instantly connect people to subject specialists through Slack and Teams our own CogX Insights app, and shortly after via our API for web and mobile app developers.

By blending AI-driven insights with trusted expert oversight, we will empower organisations, large and small, to better navigate the rapid technological changes taking place and enhance their overall performance.”

Notes to editors

About CogX

Co-founded by Charlie Muirhead in 2017, CogX is a tech community and online platforms business that convenes inspirational events featuring leading voices from a huge range of sectors. The community brings together entrepreneurs, business leaders, academics, investors and policy makers both in-person, and online.

More about CogX Leadership Summit London

Taking place at the Royal Albert Hall – the historic venue that hosted the 1851 Great Exhibition, a showcase of the 1st Industrial Revolution – the CogX Summit will focus on the 4th Industrial Revolution, an era of technological convergence that will change the way we live and work.

The Summit is being held on Monday 7th October 2024, and will bring together over 100 world-class speakers, and host over 20 editorially curated salons and mixers to answer the central question: “How do we seize the AI opportunity?

Leaders from Google, OpenAI, Microsoft, NVIDIA, Meta, Hugging Face, Northern Data, Stanford University, and companies at the forefront of generative AI will join over 2,500 delegates to discuss how to apply AI safely and responsibly today and improve productivity and drive business growth.

The live stream of the Summit is available on YouTube from 10am here. (https://shorturl.at/lj3HP).

 

 

View original content:https://www.prnewswire.co.uk/news-releases/cogx-unveils-innovative-knowledge-networking-platform-proxxi-ai-at-the-cogx-leadership-summit-302268326.html

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LG Innotek Becomes Industry’s First to Use AI to Prevent Input of Defective Raw Materials in Production

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Achieved early detection of cause of defects in raw materials through AI, becoming “first to overcome this challenge in the industry”Applied to high-value semiconductor substrates, analyzing raw material defects in only one minuteReduces defect analysis time by up to 90%

SEOUL, South Korea, Oct. 7, 2024 /PRNewswire/ — Today, LG Innotek (CEO Moon Hyuksoo) announced the development and application of the industry’s first “Artificial Intelligence (AI)-based inspection system for incoming raw materials”, designed to detect defects at the point of receipt and prevent the use of substandard raw materials in the process.

LG Innotek applied its AI-based inspection technology, developed by combining material information and AI image processing technologies, to the RF-SiP (Radio Frequency System-in-Package) process. Recently, the technology was also introduced for the FC-BGA (Flip Chip Ball Grid Array), and is expected to further enhance the competitiveness and quality of LG Innotek’s high-value semiconductor substrate products.

Previously, incoming raw materials underwent only a visual inspection before entering the production process. However, the continued advancement of semiconductor substrate technology changed this. Even after improving all in-process defect causes, failures in reliability evaluations continued to rise. This led the quality of incoming materials to gain attention as a decisive factor affecting reliability evaluations. 

The core raw materials (i.e. Prepreg (PPG), Ajinomoto Build-up Film (ABF), and Copper-Clad Laminate (CCL)) that comprise semiconductor substrates arrive as a mixture of glass fibers, inorganic compounds, and other components. In the past, air voids (gaps between particles) or foreign particles generated during the material mixing process did not significantly impact product performance. However, as substrate specifications, such as circuit spacing, have become increasingly stringent, the presence of air voids and foreign particles, depending on their size, has started to cause defects.

As a result, it is virtually impossible to identify which part of the raw material is responsible for the defect using traditional visual inspection methods, which has become a significant challenge for the industry.

If we were to compare one lot of raw materials mixture (unit of raw materials with the same characteristics that goes into the production process) to a batch of cookie dough, it is impossible for the eye to perceive the concentration of salt or sugar in a certain portion, the number of air holes in the dough, or the number of foreign particles.

LG Innotek has found a way to overcome this industry challenge with AI. Its “AI-based Inspection System for Incoming Raw Materials” has been trained with tens of thousands of pieces of data on the composition of materials that are either suitable or unsuitable for a product. Based on this, it analyzes the components and defective areas of semiconductor substrate raw materials in only one minute, with an accuracy rate of over 90%, and visualizes quality deviations in each lot of raw materials.

By using AI machine learning to visualize, quantify, and standardize material configurations optimized for quality, LG Innotek has been able to prevent defective raw materials from entering the production process. The company can change the material design based on the quality deviation information visualized by the AI system, allowing it to ensure that the quality of the raw materials lot is uniform at a suitable level before entering the process.

An LG Innotek official commented, “With the “AI-based Inspection System for Incoming Raw Materials”, the time required to analyze defects has been decreased by up to 90%, and the cost of resolving the causes of defects has been significantly reduced.”

LG Innotek plans to enhance the AI system’s detection capabilities by sharing raw materials-related data with customers and suppliers in the substrate sector through digital partnerships.

Additionally, the company aims to expand the system’s application to optical solutions, such as camera modules, where the image-based detection of material defects can play a crucial role.

LG Innotek CTO S.David Roh said, “With the “AI-based inspection system”, we will complete LG Innotek’s unique AI ecosystem, which delivers exceptional customer value by identifying causes of product defects early in the production process.” He added, “We will continue innovating in digital production technology to create top-quality products at the lowest cost and in the shortest time.”

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