Mexican maquiladoras: helping or hurting the US/Mexico cross‐border supply chain?

Purpose – This study aims to report on the current issues facing the maquiladora industry in Mexico and the cross‐border supply chain and to present suggestions for improving the situation in the future. Design/methodology/approach – Phenomenological interviews were conducted with managers overseeing various aspects of the cross‐border supply chain. The resulting data were analyzed using a grounded theory methodology to uncover theoretical linkages. Findings – The results of this study show that maquiladoras experience many of the same problems as other companies in terms of managing the cross‐border supply chain. Key factors such as distance, comparative advantage, and integration of the workforce cause problems everyday for the managers involved. Research limitations/implications – This was an exploratory investigation of the issues with a small number of informants and future research needs to be done to gain additional insights. As North American Free Trade Agreement enters its second decade, and the focus on global supply chain efficiency becomes primary for all manufacturers, solving the problems discussed in this paper becomes even more paramount. Practical implications – In addition to low‐cost manufacturing, distance and integration are critical issues for companies to understand in their pursuit of a low‐cost strategy for competitive advantage. Originality/value – The major contribution of this paper has been an improved understanding of the impediments to success in the Mexican maquiladoras. Many of the issues discussed in this paper would also apply to other global supply chains and numerous other countries.