Strategic Relocation: Balancing Efficiency and Social Impact
STORY INLINE POST
By Luis Ize Ludlow | President of Honeywell México and General Manager of Advanced Materials, LATAM -
Tue, 04/23/2024 - 10:00
Bringing the supply chain closer is a rapidly evolving trend and a strategic business approach among companies looking to optimize their operations, minimize costs, and enhance their competitiveness in the global market. As a prime location, Mexico is an attractive destination for this strategy, leveraging its proximity to the United States, its skilled workforce, and its continuously growing technological infrastructure.
So far, the Mexican government has announced a record 174 investments related to the influx of companies and the strengthening of operations for those already established in the country, totaling US $74 billion.[1] However, beyond the economic benefits, it is important to acknowledge the key roles that operational efficiency and social responsibility play in the potential success of our country through this business strategy in the medium and long term.
This privileged position is substantiated by Mexico's political stability, solid macroeconomic foundations, and financial resources that are poised to drive change. Such a shift is underpinned by programs primarily focused on integrating value chains through financial inclusion, targeting the most disadvantaged areas in terms of economic and social development.[2]
At Honeywell, we recognize the potential for economic growth and social development that come from providing automation and sustainability solutions. With our support, companies can thrive in an increasingly promising Mexican market.
Attracting, Developing Companies in Mexico
Neighboring one of the world's largest consumer markets, we can provide companies with opportunities to reduce delivery times and logistics costs associated with transporting products and services.[3] Furthermore, the modernization and expansion of Mexico's transportation and communication infrastructure have significantly enhanced connectivity between the country's regions and the rest of the world, facilitating agile supply chain management.[4]
Operational efficiency is further bolstered by Mexico's highly skilled and competitive workforce. The country's professional talent offer has diverse technical and professional skills, ranging from engineers and scientists to information technology specialists and advanced manufacturing experts.[5] This amalgamation of human talent and strategic location positions Mexico as a center of excellence for production and service delivery for companies globally.
At Honeywell, we are confident that we can help consolidate these relocation strategies in Mexico, since we have more than 80 years of experience doing this for our clients and our own operations. This is supported by our 19 facilities in the national territory, which include industrial plants, business and customer support centers, and R&D centers that operate with great success, and from which we design and deliver technologies and innovations to Mexico and the world.
Our technological process solutions and products have helped industries such as energy, healthcare, aerospace, retail, logistics and travel implement their energy efficiency strategies, while providing them with the most advanced technologies to automate their facilities and operations. Our solutions helped increase their productivity, reduced their costs, improved the safety of their workers and made their operations more efficient.
The expertise, infrastructure, global technological offerings, and in particular our own experience, are key qualities that have enabled us to better serve our customers given our focused portfolio, which is aligned to the main challenges we see reflected today under three important social and economic mega trends: automation, the future of aviation, and the energy transition. Through this approach, Honeywell is poised to progress alongside its stakeholders in Mexico toward a sustainable business ecosystem.[6]
CSR: Beyond Economic Benefit
Corporate social responsibility (CSR) is another fundamental pillar in Mexico to continue to build a prosperous future. Companies opting to establish themselves in the country should commit to ethical and sustainable practices that uphold labor rights, protect the environment, and contribute to the development of local communities. In an increasingly socially and environmentally conscious world, CSR has evolved into a pivotal factor for the long-term reputation and viability of organizations.[7]
Commitment to social responsibility is not merely a matter of business ethics but also a prudent commercial strategy. Companies embracing sustainable practices tend to appeal more to conscientious consumers and mitigate reputational risks.[8]
The scope of socially and environmentally responsible business conduct encompasses various areas: philanthropy (the most well-known), ethics (rooted in values and principles), corporate policies and accountability, product life cycles or value chains, regulatory requirements, and commercial commitments (recently emphasized). These diverse facets of CSR signify emerging paradigms in productive development that foster economic growth within a sustainability framework.[9]
In Mexico, one of our key objectives is to take advantage of innovations, at a global level, and apply them responsibly to benefit sustainability in this country. Therefore, our broad portfolio of automation solutions contributes to reducing our carbon footprint.[10]
Technological Innovation: Competitiveness Driver
Technological innovation plays a pivotal role in the success of relocation of supply chains in Mexico. Adopting advanced technologies, such as artificial intelligence and automation, empowers companies to enhance the efficiency of their processes and offer superior-quality products and services.[11] Moreover, technological innovation can stimulate the development of novel products and services, penetrate new markets and create opportunities for highly specialized employment.[12]
Honeywell has worked closely with local authorities to recognize the importance of technological innovation in driving the country's competitiveness and economic growth. Our purpose is to develop and promote the adoption of innovative technologies in the business sector.
Establishing a solid innovation ecosystem is vital for the future of companies seeking to have a competitive place in the future in Mexico. This requires investments in technological infrastructure, the promotion of research and development, and the creation of strategic partnerships between the government, the private sector, and academic institutions.
Another of the main challenges for consolidating relocation in Mexico is democratizing industries, which will attract more investment and diversify businesses throughout the country. With this in mind, we will continue working as facilitators for all those companies that seek to enter and understand this new business ecosystem.
Operational efficiency, social responsibility, and technological innovation are fundamental elements. Only through a collaborative and forward-thinking approach will we be able to fully take advantage of the benefits in this country and ensure that technological transformation and sustainability drive economic and social growth.
[3] Economía de Estados Unidos | Datos macro | datosmacro.expansion.com (www. datosmacro.expansion.com)
[4] Proyecto de Integración y Desarrollo de Mesoamérica | Agencia Mexicana de Cooperación Internacional para el Desarrollo | Gobierno | gob.mx (www.gob.mx)
[6] https://www.honeywell.com/us/en/press/2023/10/honeywell-to-realign-portfolio-to-three-powerful-megatrends-automation-future-of-aviation-and-energy-transition
[7] Responsabilidad Social Empresarial | Secretaría de Economía | Gobierno | gob.mx (www.gob.mx)
[9] La responsabilidad social corporativa en un marco de desarrollo sostenible | CEPAL
[10] ESG Report Honeywell
[11] Qué es la inteligencia artificial y su impacto en los negocios (tec.mx)
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