How to Manufacture in Mexico: Simplifying Supply Chain Management

Efficient, cost-effective supply chain management is vital to maintaining a successful manufacturing operation in Mexico. From purchasing, to import and export administration, learn how a shelter services provider can help keep your company’s operation running quickly and smoothly in Mexico.

Important considerations for supply chain management in Mexico

Purchasing and supplier relations

A critical factor in establishing an effective supply chain for your manufacturing operation in Mexico is maintaining effective relationships with suppliers, vendors, and other parties. In addition to negotiating pricing, terms, and delivery of components for manufacturing, the team you choose to manage purchasing may also be responsible for managing maintenance and repair required at your plant. For newcomers to Mexico, building relationships with local vendors, as well as navigating cost-effective terms and any disputes that may arise, can be challenging. When starting or expanding an operation, it is essential to ensure that the purchasing team you select is well-versed in managing these vital functions.

Receiving components and materials

Your company depends on the timely receipt of necessary components to ensure that the production process runs smoothly. Coupled with the fact that many manufacturing operations aim to stay reasonably lean with regard to the supply of materials and components, interruptions or missed deliveries to this part of the supply chain can result in disaster. In addition to natural disasters and political unrest – factors which vary in Mexico depending on location – supply chain managers must be aware of other potential problems that can delay receiving. This applies not only to major suppliers but also to third- and fourth-tier suppliers. For companies inexperienced with supply networks in Mexico, or the nuances of these networks, it is complicated to account and plan for timely delivery.

Import of raw materials and export completed products

Delivery and export of manufactured components – and especially completed products – can be particularly tricky. Delivery to many destinations is likely, and the process is expected to work differently in different markets. The promises a manufacturer can make regarding delivery times in one location may be impossible to uphold in another. Cost differences in delivery also vary from country to country and can differ drastically. Issues of taxes, tariffs, charges, and regulations arise when exporting, and these can be tricky to navigate.

Choosing appropriate service providers to use for delivery is an integral part of supply chain management in Mexico. These providers can impact delivery times, shipping costs, and more. In-depth research on available providers is necessary if your company is attempting to increase agility or lower delivery costs.

Easier supply chain management with shelter services in Mexico

Given the many complexities of creating and managing a robust supply chain in Mexico, many companies opt to work with a shelter services provider. In contrast with building a supply chain from the ground up, shelter providers offer a variety of services to effectively perform purchasing, receiving/delivery, and import/export administration in Mexico. There are numerous benefits to working with a shelter services provider in Mexico, including:

• Reduced knowledge gaps. The shelter service provider is a repository of local knowledge and can navigate relationships with third party suppliers, delivery providers, regulatory bodies, and other entities. Companies new to manufacturing in Mexico often find this to be one of the most beneficial aspects of the provider relationship.
• Strong communication with suppliers. Communication is vital to every aspect of manufacturing in Mexico, especially when internal departments must work with external vendors – many of whom speak Spanish. This can become challenging for companies operating without the assistance of a shelter services provider. Beyond accurate tracking of delivery schedules and communication of crucial deadlines, shelter companies maintain the relationships necessary to set up efficient supply chains. Often, the local familiarity a shelter company has can introduce manufacturers to a previously unknown network of reliable suppliers.
• Improved flexibility and lower costs. Using shelter services in Mexico can present opportunities to increase agility or reduce costs. As experts in the local markets in Mexico, shelter service providers often know best practices for supply chain management in specific regions. They can help companies evaluate how often to take delivery of supplies, as well as quantity. For instance, it may be possible to receive less frequent but larger deliveries of stock to save money. Or, if a manufacturer currently dedicates an ample space for storage, leaner, more frequent orders can be evaluated. In either case, a shelter services provider often has the expertise to help companies improve supply chain efficiency and reduce costs.
• Improved location selection. Supply chain concerns are an often-overlooked aspect of selecting a manufacturing location that can drastically impact costs and flexibility in a manufacturing operation. Ideal sites balance labor market, real estate, and logistics factors in addition to considering the supply chain. Shelter services providers can help source locations that provide the best access to vendors, with easy transport of components and goods to and from your facility.

Learn more about supply chain management when manufacturing in Mexico

At Tetakawi, we have the know-how to build relationships with local and regional suppliers. As your trusted partner, our expertise in purchasing and supply chain management allows us to negotiate effective pricing and provide you with the best options for vendor selection. We also offer comprehensive services for site selection, which is critical to ensuring optimal location for your supply chain.

If your company is looking to implement improved supply chain strategies in Mexico, we can help get your questions answered. Learn more about our offerings for shelter services in Mexico and efficient, cost-effective supply chain management from a Tetakawi expert here.