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News Desk: Mexico Still Ranks as Top 'Near-Shoring' Choice


With continued rising labor and other manufacturing costs for overseas imports from China and other countries, "near-shoring" increasingly is being viewed as an opportunity to better serve US demand, according to a recent report by AlixPartners LLP (New York), a global business advisory firm.

The company says about half of C-level and other senior executives of manufacturing-oriented companies interviewed see near-shoring as attractive. Manufacturing inside the US is viewed as the most attractive choice for such re-sourcing, by 35% of those surveyed, up from 21% in a similar survey a year ago. According to the AlixPartners Manufacturing Re-shoring and Near-shoring Outlook Survey, 50% of executives interviewed in the current survey view last year’s top choice, Mexico, as the top choice again this year.Image Courtesy AlixPartners LLP

The survey results also suggest that rising domestic demand in developing countries such as China may encourage even more near-shoring and reshoring in the West in the future, as companies in China and other developing markets redirect their capacity toward local consumption rather than export, with over a third, 34%, of executives predicting that would be the case.

"A lot has been written of late about America’s manufacturing rebound, and there certainly has been a very impressive rebound; however, Mexico still remains the near-shoring locale of choice for companies looking to overcome the higher costs of doing business today in places like China," says Foster Finley, managing director at AlixPartners and co-lead of the firm’s Transportation Practice. "As manufacturing costs have increased in China and elsewhere in Asia, the cost and time factors involved in shipping goods across vast distances are magnified and, whether it’s in Mexico or the US, any company that’s not at least considering alternative manufacturing sources closer to their home market is certainly missing an opportunity."

As in last year’s survey, lower freight costs and improved speed-to-market were the two most-cited advantages expected from the decision to near-shore. Thirty-seven percent of executives cited hoped-for lower freight costs, up from 34% in the 2011 survey, and 31% pointed to speed-to-market, up from 28% a year ago. Significantly, and perhaps hand-in-hand with both of those, 26% cited lower inventory costs as the biggest expected advantage, up from 20% last year.

"While total cost parity certainly doesn’t exist today, the gap between manufacturing in North America and in places like China has narrowed dramatically, especially when shipping and inventory carrying costs are factored into the equation," notes Russ Dillion, a director at AlixPartners. "Company leaders, at an increasing rate, are realizing that customers don’t have the patience to wait three to four weeks for their products to cross the ocean. Today’s speed of business usually won’t allow for that."

The outlook for the security and safety situation in Mexico, an important factor in any decision to relocate manufacturing there, was essentially unchanged in this year’s survey. About half of those surveyed each year, 45% last year and 43% this year, say they expect modest improvement in the security and safety situation, while 13% said they think it will "worsen somewhat," vs. 14% in last year’s survey. Only 4% predicted the situation will be "spiraling out of control," down from 7% who thought that a year ago.

The survey also asked executives in this election year about the US government’s role in promoting the reshoring of manufacturing jobs to America. While a majority say there are useful actions the government can take (including cutting corporate tax rates), a sizeable number (31%) say there is nothing at all the government can do, and only 3% note that lower healthcare costs—a big part of this year’s political debate—would lead to more reshoring.

The AlixPartners Manufacturing Re-shoring and Near-shoring Outlook Survey was conducted March 7 to April 27, and included responses from 116 C-level and other senior executives in manufacturing-oriented companies that sell into the US market. Respondents were from a broad range of middle-market (at least $100 million in annual revenues) and large companies, in a broad range of industries, including automotive, aviation, consumer products, durable goods and packaging. For more information on the report, visit


Additive Manufacturing Surging


Additive manufacturing and 3-D printing are riding a wave of popularity, as lower-cost 3-D printers make their impact along with increasing adoption of direct metal manufacturing methods. The additive manufacturing industry’s compound annual growth rate (CAGR) was 29.4% in 2011, according to the latest Wohlers Report 2012, an in-depth analysis of additive manufacturing (AM) and 3-D printing worldwide recently released by Wohlers Associates Inc. (Fort Collins, CO).

The latest Wohlers Report marks the 17th consecutive year of its publication, a 287-page report including 30 charts and graphs, 55 tables, and 219 photographs and illustrations. The annual study was created with support from 71 service providers, 27 system manufacturers, and the valuable contributions of 57 co-authors from 21 countries. Along with noting additive manufacturing’s CAGR of 29.4% last year, the report states the CAGR for industry’s 24-year history is 26.4%, and the AM industry is expected to continue strong double-digit growth over the next several years. By 2015, Wohlers Associates believes that the sale of AM products and services will reach $3.7 billion worldwide, and by 2019, surpass the $6.5 billion mark.

Additive manufacturing is the process of joining materials to make objects from 3-D model data, usually layer upon layer, as opposed to subtractive manufacturing methodologies. Additive manufacturing is used to build physical models, prototypes, patterns, tooling components, and production parts in plastic, metal, and composite materials. AM systems use thin, horizontal cross sections from CAD models, 3-D scanning systems, medical scanners, and video games to produce parts that can be difficult or impossible to produce any other way.

"No other organization has access to this depth of data and statistics," says Terry Wohlers, president of Wohlers Associates and a principal author of the new report. The information is used to track industry growth, provide views and perspective, uncover trends, and offer insight into the future of additive manufacturing. Major new parts on applications, materials and processes, and front- and back-end considerations were added. The final part of the report concludes with 19 trends that are expected to shape the future of the technology and industry.Image Courtesy Wohlers Associates Inc.

The study covers all aspects of additive manufacturing, including its history, applications, processes, manufacturers, and materials. It documents developments in the past year, covers R&D and collaboration activities in government, academia and industry, and summarizes the state of the industry in countries around the world. It also tracks the extraordinary growth of personal 3-D printers, machines priced under $5000, with the majority in the $1000–$2000 range. A free PDF executive summary of the $495 report can be downloaded at



Patent Awarded


Controls developer Fanuc FA America (Hoffman Estates, IL) announced that Fanuc FA and Jerry Scherer, an engineer with Fanuc, recently were awarded a patent, US 8,135,491 B2, for the development of the company’s CNC Adaptive Control System for on-demand integrated adaptive control of machining operations. This adaptive control system was developed to increase machine tool productivity with Fanuc FA America’s iAdaptS adaptive control solution.

Fanuc’s CNC Adaptive Control System measures the present value of the spindle load and then compares this value to a present value of a target spindle load. The adaptive controller is configured to control the feed rate of the machine tool relative to the workpiece to maintain the present value of the spindle load approximately equal to the present value of the target spindle load using one or more calculations of the first feed rate value, the first feed rate dither adjustment value and the second feed rate dither adjustment value.

This adaptive control system is the base technology in Fanuc FA America’s iAdaptS solution that improves material removal and minimizes cycle time by automatically optimizing the cutting feed rate based on the actual spindle load. Additionally, integration of the iAdaptS software solution within the CNC now eliminates the need for mounting hardware, simplifying installation while improving the capabilities of the original iAdapt product.

The company’s original iAdapt product introduced the concept of roughing cycle productivity to CNC customers. The "On Demand" control feature simplified the use of the adaptive control by making it easy to set up and operate; iAdaptS extends tool life by keeping roughing tools fully loaded, putting the heat into the chips rather than the part. As a result, there are fewer minor stoppages, which further increases productivity and reduces labor costs.





Additive manufacturing developer 3D Systems Corp. (Rock Hill, SC) has acquired Bespoke Innovations Inc. (San Francisco), a startup builder of prosthetic medical devices and healthcare solutions. Although the company expects to make additional R&D investments before it can commercialize new Bespoke products, 3D Systems announced that it affirms the company’s previously announced guidance of $330 million to $360 million in revenue and $1.00 to $1.25 Non-GAAP EPS. The company does not expect this acquisition to be material to its revenue for the remainder of 2012.

3D Systems plans to integrate Bespoke into its growing healthcare solutions services and leverage its integrated scan, design and print technology and know-how to develop and commercialize a full range of innovative, ventilated and lightweight custom-fit prosthetics, orthotics and orthopedics.

"This is an exciting and timely development that fuses together essential Bespoke and 3D Systems technologies to deliver an expanded range of life-enhancing, cost-effective treatments for the benefit of patients and providers alike, within existing insurance reimbursement codes," says Scott Summit, co-founder of Bespoke Innovations.

"Bespoke products can deliver extraordinary individualization and style to an underserved audience through its extraordinary designs and proprietary scan-to-print technology," says Abe Reichental, 3D Systems president and CEO. "We plan to fast-track additional Bespoke products to market and to enhance their affordability and availability through our technology and manufacturing infrastructure."

Automated material handling developer Intelligrated (Mason, OH) announced that it has entered an agreement to be acquired by a holding company owned by the Permira funds in a transaction at a valuation in excess of $500 million. Intelligrated’s management, led by founders Chris Cole and Jim McCarthy, will maintain a significant stake in the company as part of the transaction and will continue to lead the company.

"This is a very exciting new chapter for our company, and we are thrilled that a world-class investment firm such as Permira has recognized the growth potential in our business," says Chris Cole, CEO of Intelligrated. "This is a strong endorsement for Intelligrated and our highly talented workforce, and we look forward to taking advantage of the unique global perspective and industry insight that the Permira funds will bring. We are pleased that they recognize our ability and commitment to providing mission-critical, high-speed automated material handling systems, software and service."





The Web address for Willington Nameplate Inc. was incorrectly given in some versions of the May 2012 issue of Manufacturing Engineering. The correct address is





Thermadyne Holdings Corp. (St. Louis) announced that it has changed its name to Victor Technologies Group Inc. and the name of its wholly owned subsidiary Thermadyne Industries Inc. to Victor Technologies International Inc. Victor is the company’s strongest and most established brand, celebrating its 100th anniversary in 2013.

Victor Technologies provides solutions for cutting, welding and gas control equipment under brand names that include Victor, Tweco, Arcair, Thermal Dynamics, Thermal Arc, Stoody, TurboTorch, Firepower and Cigweld.



Web Updates


Waterjet machine builder Omax Corp. (Kent, WA) has launched its Omax and Maxiem Mobile Web sites for its OMAX and MAXIEM product lines. These content-rich sites provide on-the-go customers with enhanced, quick access to important waterjet-related information including new product details and event announcements, available from the convenience of mobile devices. Compatible with a variety of mobile devices, the Web sites are simple to navigate and easy to read, prioritizing key content via advanced mapping features. For more information, see and


This article was first published in the July 2012 edition of Manufacturing Engineering magazine.  Click here for PDF



Published Date : 7/1/2012

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