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