Mexican Auto Industry

Lean production involves producing more with less inventory, time, money, labor and space. Some of the characteristics of lean production include, integrated continuous workflow, just in time processing, production based on orders instead of forecast, total quality control, minimum inventories at each stage, preventing defects rather than inspecting for defects and quick changeovers of the machines (Dennis, 2007).

Honda and other Japanese manufacturer choose the Midwest because of a few reasons. One of the reasons is accessibility. The Midwest has access features such as the five great lakes, Erie Canal, Ohio River and Mississippi river. Another reason is that the region has access to mineral resources required for heavy industrial production. In addition, the region has a relative location to Megalopolis (Ōno, 1988).

Just in time, production involves receiving goods just as they are needed in the production process. The major advantage of the just-in-time production is that it ensures that there is a buyer for any item produced thus reducing inventory costs. In addition, the customer needs are met given that the issue of stock outs is non-existent in the just in time production strategy (Dennis, 2007).

Two important location requirements of just in time production for suppliers are the accessibility and infrastructure. In just in time, the supplier supplies inventory when required in production meaning that the lead-time should be short. This means the accessibility of the area and the infrastructure available will determine how fast the inventory gets to the production plant.

Auto manufacturing is expanding in Mexico due to several reasons. These include duty free imports and tax credits in Mexico, Mexico’s proximity to the U.S. and Canada, affordable labor and the environmental benefits.  For Mexico to increase auto manufacturing there is need to reduce the criminal activities along the border. In addition, though most of the infrastructure is advanced, some roads are not in good condition.


Dennis, P. (2007). Lean production simplified a plain language guide to the world’s most powerful production system. New York: Productivity Press.

Ōno, T. (1988). Toyota production system: Beyond large-scale production. Cambridge, MA: Productivity Press.

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