As more global manufacturers seek to cut costs and risks in their supply chains, many are seeing locations across the Americas as prime destinations for new or expanding factories.
Large brands that were relying on factories in Asia to manufacture their products are deciding to make their investments closer to their end consumers in North America, said Leonard Marano, president of the Americas for Lectra.
Founded in 1973 in Paris and with 2,500 employees worldwide today, Lectra provides industrial intelligence solutions — software, equipment, data, and services — to the fashion, automotive, furniture and aerospace markets.
“Coming out of the pandemic, customers across all of our markets are rethinking their supply chain,” Marano told FreightWaves. “It’s not just the supply side, there’s the production side. We see a very strong desire to get products closer to the consumer, which allows for better control of inventory, better control of quality, reduces lead times and speeds up time to market.”
An example is one of Lectra’s newest customers, Mexico City-based Preslow, a retail apparel manufacturer. The company, which makes uniforms and corporate apparel, chose Lectra to help move manufacturing away from Asia and reshore more production back into Mexico.
Preslow, which counts Walmart as one of its biggest customers, had to rethink its supply chain when the pandemic disrupted workflows around the world.
“We were hit hard in 2020 because orders were being canceled and it was all a mess,” Isaac Presburger, Preslow’s sales manager, said in a news release.
Before 2020, around 40% of the outerwear Preslow produced was made overseas; now that number has fallen to about 20%. Preslow is making more of its apparel at its Mexico City factory — an estimated 1 million garments a year — using Lectra’s software and hardware.
Marano said when manufacturers are closer to their customers, it can help save money through production flexibility.
“When you’re close to the end markets, you don’t have to mass produce at the level that you have before. You could do smaller runs, which means the likelihood of you selling more of your product run completely, rather than having to write it off,” Marano said.
“It allows you to have quicker time to market, whether it’s apparel with a new shirt style or a new season coming out, whether it’s a new piece of furniture, or style of furniture that’s on trends, or the latest platform from one of the automotive OEMs. Having closer production to where it’s ultimately going to the consumer, it ends up being more sustainable and more profitable.”
Among Lectra’s client base, Mexico, parts of Central America and locations in the Caribbean have been the main beneficiaries of nearshoring so far, Marano said.
“We see it in Mexico, a lot in furniture and also apparel, as well as very heavily in automotive,” he said. “We also see it in areas like the Dominican Republic, Puerto Rico; we’ve seen a big increase in Central America, as well.”
To take advantage of the increase in manufacturing across the Americas, Lectra inaugurated its newest production facility in April in Tolland, Connecticut. The 229,000-square-foot facility is part of Lectra’s acquisition of Gerber Technology in 2021.
With the Tolland production facility, Lectra has a strategy of having three manufacturing sites to reach all of its global clients: Tolland for the Americas, Shanghai for Asia and Bordeaux, France for Europe.
“When you look at our manufacturing strategy, by having manufacturing in those three areas, we get to stay close to our customers as well,” Marano said.