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Study to help develop regional manufacturing in the Texas-Mexico Corridor

Many manufacturers who moved operations to China and Southeast Asia with cost-savings in mind are now beginning to realize long-term bargains were not found in labor or logistics. In addition, there are problems with quality, an increased inventory in the supply chain, currency risk and a need to be closer to their markets.

The result is tremendous opportunity for regional manufacturing in the Texas-Mexico corridor.

To help Texas capitalize, the Texas Engineering Extension Service (TEEX) has partnered with Texas A&M University’s Global Manufacturing and Distribution Research Initiative to conduct the research and deliver findings in a series of conferences targeting industry and economic developers throughout South Texas and Northern and Central Mexico.

The Conference

What: South Texas Trade Competitiveness Study: Leading Global Supply Chain Throughput in South Texas (The second in a series of five conferences)

When: February 18, 2009 — Registration begins at 7 a.m.

Where: Hilton San Antonio Hill Country Hotel & Spa

Cost: Free, but registration required.

Who Should Attend: manufacturers, distributors, logistics providers, custom brokers, government, industrial park developers, real estate & commercial providers, economic development professionals

The morning session (7 a.m.-1 p.m.) is open to the media and general public. The afternoon session is for consortium members only.

Media: Media interested in covering the event should contact Chuck Glenewinkel

Office: 979.458.7758; Cell: 979.229.6453; E-mail: chuck.glenewinkel@teexmail.tamu.edu

The Consortium

The Mexico-Texas Trade Corridor Consortium, a membership organization comprised of major manufacturers, distributors and economic development councils, will serve as the catalyst for this research and will focus on increasing throughput, decreasing time and cost, and optimizing distribution and manufacturing operations in the region. The consortium is contributing more than $200,000 of research funding to the overall effort.

The study

To the vast majority of Americans, globalization has meant outsourcing large portions of its labor-intensive manufacturing to take advantage of low wages in Asia. However, overseas shipping presents extensive and increasing challenges such as quality control, logistics, and increasing wages. With these issues in mind, the need for stronger economic relations with Mexico — with whom trading is simpler and more symbiotic — is evident. Using the conferences and the consortium as a catalyst, Texas A&M and TEEX are exploring and attempting to describe and quantify the benefits and challenges of doing business with Mexico. Study areas include:

Identifying optimal places to do business: There are many factors for companies to consider when determining whether working with a potential supplier, customer, or distributor near the border would be profitable. Some are obvious, while others are not. Therefore, it will be valuable and practical for companies to have an equation that will provide the best decision based on a quantitative analysis of all factors considered by the consortium.

Infrastructure analysis: Another significant piece of the puzzle is identifying logistical strengths and weaknesses by analyzing the current infrastructure situation and the improvements that need to be made to create a healthy relationship between American and Mexican industries. These factors include necessary improvements in roads, rails, and ports, as well as a return-on-investment analysis on creating this needed infrastructure at the country, state, and city level.

Recognize market opportunities: Finally, the study will identify optimal conditions for industry clusters to develop around certain regions and point out characteristics that attract specific industries to the area. This is a very powerful analytical tool because it allows one to recognize market opportunities. It shows which factors determine a company’s success in the area based on the industry they serve. These include, but are certainly not limited to, government incentives, population characteristics, levels of education and educational programs, and the current and future job market. The team is also studying the area’s current needs based on the human resources challenges companies currently face.

Together, the three teams will provide a very thorough report on the Texas-Mexico region and will present strengths and necessary improvements for U.S. companies to work in and with Mexico. In a broader sense, it will promote business in the area by exposing its benefits, creating a trade relationship that is much healthier for the United States economy.

Contact Information

Kathy Fraser

Director of Marketing and Communications

They had great hands-on activities and materials which aided in the learning process for this course.

— Forensic Photography II
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