Logistics and Manufacturing Issues in Maquiladora Operations

In: International journal of physical distribution and logistics management, Volume 20, Issue 4, p. 13-21

Abstract

Maquiladora operations have become increasingly
popular during the past 10 years. The driving force
behind this popularity has been the dramatic
devaluation of the Mexican peso, which has made
Mexican labour among the lowest cost in the world.
However to take full advantage of maquiladora
operations additional logistics costs are incurred in
supporting the Mexican production/assembly
facilities. The logistics/manufacturing cost trade‐offs
inherent in maquiladora operations are explored
empirically. While logistics costs were found to
increase and logistics performance decreased, most
of the firms involved in maquiladora operations
considered their operations to be highly successful
based on product cost savings.