Lecture Oct 11th SLC PDF

SGM3 Global Supply Chains Management of Supply Chains - Industry level (context Mexico), Porters Diamond, Purchasing and strategic sourcing Jacqueline Bürki, Omar Serrano & Sherban Leonardo Cretoiu with coaches: Angel Facio Mandujano & Jorge Mauricio Mancilla  Source: Harvard Busine...

SGM3 Global Supply Chains Management of Supply Chains - Industry level (context Mexico), Porters Diamond, Purchasing and strategic sourcing Jacqueline Bürki, Omar Serrano & Sherban Leonardo Cretoiu with coaches: Angel Facio Mandujano & Jorge Mauricio Mancilla  Source: Harvard Business Review – March-April 1990 – p. 73-93 Berner Fachhochschule | Haute école spécialisée bernoise | Bern University of Applied Sciences Berner Fachhochschule | Haute école spécialisée bernoise | Bern University of Applied Sciences  Mexico beyond stereotypes…. or Mexico on steroids! 4 Berner Fachhochschule | Haute école spécialisée bernoise | Bern University of Applied Sciences  World Economic Outlook in 2050 https://www.pwc.com/gx/en/research-insights/economy/the-world-in-2050.html 5  GDP 2020 Nominal – World Bank 9  WEF – Global Competitiveness Report 2019 10  WEF – Global Competitiveness Report 2019 11  WEF – Global Competitiveness Report 2019 12 https://fortune.com/ranking/global500/ FORTUNE GLOBAL 500 ▫Companies HQ in 35 countries ▫139 companies HQ in USA ▫128 companies HQ in China ▫233 companies HQ in RofW ▫4 companies HQ in Mexico https://fortune.com/ranking/global500/ 14 https://www.americaeconomia.com/negocios-industrias/multilatinas/ranking-multilatinas- 2021-la-globalizacion-no-se-detiene https://www.americaeconomia.com/negocios-industrias/multilatinas/ranking-multilatinas- 2021-la-globalizacion-no-se-detiene Main trade partners Comparison 2000 x 2020 17 Source: The Economist What makes a country attractive/competitive? ❑ Institutions and Legislation ❑ Labor – Talent – Knowledge ❑ Location ❑ Resources – natural endowments ❑ Culture – Values ❑ Trade and Investment Agreements ❑ Size of the Domestic Market ❑ Pre-existing Supply Chain 18 Berner Fachhochschule | Haute école spécialisée bernoise | Bern University of Applied Sciences  Mexico, the Diamond, Chance and Government 20 Berner Fachhochschule | Haute école spécialisée bernoise | Bern University of Applied Sciences 21 22 23 25 https://www.dof.gob.mx/nota_detalle.php?codigo=5704676&fecha=11/10/2023#gsc.tab=0 26 FDI in Mexico – 2000 to 2022 ❑ US$ 671 billion accumulated FDI ❑ 2023 US$ 36 billion ❑ 2024 US$ 38 billion (estimate) ❑ Main Sectors: automotive, metal-mechanic, machinery, medical devices and equipment, domestic appliances, electronic equipment. ❑ In the last 4 years only 7% comes from new investor companies. 27 Challenges for Mexico ❑ Regional Diversification of Exports ❑ Development coordination – North-South ❑ High value-added economic sectors ❑ Energy Infrastructure ❑ Water shortages ❑ Housing shortage 32 Challenges for Mexico ❑ Operational costs up between 2% to 3% due to (in)security issues. ❑ How to develop and better remunerate Human Resources ❑ Corruption ❑ Rule of Law 33  Mexico Automotive Industry Facts and Trends 34 Berner Fachhochschule | Haute école spécialisée bernoise | Bern University of Applied Sciences Facts and Trends in Automotive Industry and EV Over the next few years, Mexico will receive 15 billion dollars of investment in EV auto parts, according to the Industria Nacional de Autopartes. The USMCA/T-Mec Agreement dictates that 75% of assembled parts must originate in member states. Output of EVs in Mexico was projected to have an increase to 223,640 in 2023 from 79,471 in 2022 (OMRON, 2023). At least eight OEM plants are already assembling or planning the production of EVs in Mexico, featuring such names as: General Motors Co, Ford Motor Co, Stellantis, BMW, KIA, Tesla, Volkswagen with their Audi unit and Nissan. (González, 2023; Hermosillo, 2023; The Economist, 2023). 40 Facts and Trends in Automotive Industry and EV The most important clusters for producing auto parts and components are Guanajuato (featuring 21% of EV or registered EV auto parts and components manufacturing plants), Coahuila (14%), Querétaro (14%), Nuevo León (13%), Chihuahua (9%), and San Luis Potosí with 9% (OMRON, 2023). EV and related manufacturing in Mexico is still export-led; local demand for EVs is still low due to high prices, a lack of subsidies for consumers, the high cost of installing charging devices at home, and few public charging stations. Only 1.53% of Evs produced in Mexico were sold locally in 2022 (Hermosillo, 2023). 41