From natural disasters to global pandemics and other demand surges, unexpected disruptions big and small can expose vulnerabilities in the manufacturing supply chain. In this post, learn about supply chain management in Mexico and the importance of creating a sound contingency plan.
In Mexico, the supply chain is one of the most critical aspects of creating a successful manufacturing operation. Despite the country's robust infrastructure and well-established manufacturing industry, it is essential to understand how supply chains in Mexico work. There are three important factors to consider:
Purchasing and supplier relations. Maintaining effective relationships with local vendors and suppliers is critical to effective supply chains. Excellent communication is key, as supporting these partnerships is vital to the negotiation of pricing, terms, and delivery.
Shipping and receiving of materials. Successful operations depend on the timely receipt of components for production to run smoothly. Many manufacturing operations aim for a lean supply of materials, but interruptions or delays can drastically impact this part of the supply chain.
Delivery of completed products. Running a manufacturing operation often involves delivery to many destinations. The delivery process is also likely to work differently in different markets. Differences in costs, taxes, and relations can be tricky to navigate when exporting to destinations worldwide.
Why is a supply chain contingency plan important?
In today's modern economy, supply chain disruptions are simply a reality of doing business. However, relatively few companies have a detailed and tested contingency plan for responding to these potential disruptions – large or small. Those that do have a distinct advantage.
In essence, a contingency plan will prepare you for when one company in your supply chain is in trouble. A good contingency plan will not only allow you to react to any problems successfully, but it will also allow you to be proactive and minimize a percentage of potential loss before it even occurs.
No supply chain is immune to disturbance. However, the causes of business disruptions are many, and several of the most prominent ones have nothing to do with the weather. Some common reasons for supply chain disruptions include:
Whether the result of a natural disaster or a loss of data, disruptions can wreak havoc in an otherwise seamless operating system. Notably, a disrupting event does not have to directly impact your business to cause devastation to your supply chain. For instance, problems at one of your suppliers (or even further, one of their suppliers) can halt production.
Advanced planning is the key to combating supply chain disruptions. On the eve of a weather disaster, scrambling to create and implement a rushed, potentially disordered contingency plan can cause more harm than good. Your organization can proactively prepare for unexpected interruptions using these best practices for developing a supply chain contingency plan.
Practice is an often-overlooked step in effective planning. Your response team and all other relevant staff should be debriefed on what must be done in the event of a crisis. Excellent communication and cross-training are crucial to ensuring that your team is well-prepared if disruptions occur. Additionally, executing contingency plan drills will help ensure that the contingency plan is viable as well; even if Plan B is well-reasoned on paper, this does not guarantee it works successfully in practice.
Many precautions can be built into your standard operations ahead of time, such as backing up data offsite or ordering raw materials from several suppliers instead of just one. This way, you will not only be planning to position your business for more competitive manufacturing, but also mitigate some of the effects of today's incredibly lean supply chains.
Shelter services in Mexico can make contingency planning easier
Given the complexities of managing a robust supply chain in Mexico and effectively developing a contingency plan, many companies opt to work with a shelter services provider. Beyond offering a range of supply chain management services, there are numerous benefits to working with a shelter services provider in Mexico:
If your company is looking to build a supply chain contingency plan, we can get your questions answered. To learn more about our offerings for supply chain management, supply chain contingency planning, or related shelter services in Mexico, contact a Tetakawi expert here.