Case Study: Nearshoring Cost Framework (Asia vs. Mexico)

Situation

$350M Asian Apparel Manufacturer wanted to build a strategy for Near Shoring to diversify and enable their global footprint.  Zefyr worked with this factory group to look at a Landed FOB cost model comparison of Asia (China, Vietnam, & Cambodia) vs Mexico.  Our goal was to share what Landed Margin looked like fully loaded.

Objective

Research & create factory market data including the information below:

  • Landed Duty Calculator: Evaluating total cost frameworks and comparison for both Cotton & Poly

  • Worker Salary Analysis: Providing Mexico projection over the next 5 years, showing what the client could expect for an average salary including wages & benefits with a review on risk & mitigations

  • Cost Per Minute Study: Comparing Asia vs Mexico including Direct, Indirect, SG&A & Shared Services

  • Material Cost Analysis:  Deep dive on yarn & material costing parameters reviewing risk & mitigation strategies

Results and Deliverables

Zefyr prepared analysis and insights to guide the next stage of Nearshoring Strategy

 

Cost Framework

Built a cost framework for factory to use to calculate landed duty, & transportation to utilize on any style that wanted to run

Country Matrix

Built country matrix framework to compare countries & locations

Leadership Presentation

Built a Brand leadership presentation for client to review and align strategy on costing model & benefits of NearShoring

 
 

15 Style Analysis

Market data & analysis to inform the cost model showing where factory has a competitive advantage to Asia

3 Tier 2 Suppliers

Identified yarn & material suppliers in region that best optimized their cost matrix

 
 
David Kelley