Many companies fed up with global supply chain issues that are causing serious interruptions to their businesses are now taking a hard look at reshoring and establishing manufacturing operations in Mexico. One of the first steps these savvy organizations are taking is finding the best site selection consultants who are familiar with the ins and outs of the local markets to help them find the most suitable location possible.
photo credit: Cottonbro Studio / Pexels
Because the site selection process involves assembling, evaluating, and weighing a wide range of variables and relevant information, it is often too complicated for a manufacturer to manage on their own. This is particularly true for those located in other countries that may not be up on the latest trends and conditions in the various Mexican business sectors.
For example, it may be difficult for a foreign entity to know that certain areas of Mexico specialize in automotive operations, while others attract aerospace, electronics, and other types of manufacturing companies. This type of insight might sway a relocation decision one way or another.
Tetakawi is well-versed in the complexities of setting up a manufacturing operation in Mexico. They have up-to-date site selection data and long-standing relations with key stakeholders in manufacturing locations throughout the country.
How an Advisory Partnership Should Work
After putting together a project team with representatives from operations, human resources, facilities, logistics, compliance, and other essential functions, project requirements will be clearly defined and incorporate the needs of each business unit.
While each project and business are different, there are certain universal requirements that will form the basis of the business relationship. Once these are identified, information will be used to create a list of viable sites.
Industrial areas in Mexico are located throughout the country and are in urban areas as well as in regional clusters. In addition, a company needs to make some internal decisions such as if it wants to purchase or lease a property, build from the ground up on a piece of land or repurpose an existing building. The decisions that need to be made are extensive and should be discussed thoroughly.
From there, the team will wade through the information and compare each of the sites according to a number of variables, including demographics and education levels of the local workforce, competition in the area, employment drivers, infrastructure, logistics and transportation, tax and other incentives offered by the government, compliance requirements, safety concerns, supply chain considerations, and more.
Once the potential sites have been narrowed down to a few top candidates, the project team will do on-site due diligence and meet with local leaders and officials. Tetakawi can help guide these conversations to ensure all questions are fully answered.
In addition, Tetakawi will help manufacturers get a firm grasp on what the local labor environment is and what can be done to reduce and control turnover to create a sustainable workforce. They can also guide a company on what skills may be required and organize the appropriate training to support growth in the future.
If more than one location is needed, the inbound and outbound logistics between the two sites need to be considered to ensure goods and personnel can move between the two operations easily.
What Happens After a Location Is Identified
As the number of potential sites are narrowed down, the team should simultaneously start conversations with property owners or managers to nail down the terms and conditions available for a lease or purchase.
If the site is managed by a shared services company, this is when labor costs should be spelled out, as well as any and all economic incentives being offered as part of this umbrella arrangement.
When Tetakawi is involved, it uses reliable and real-time data to create customized comparisons of the risks and benefits of each site so that a manufacturer can make a well-informed decision.
A Long-Term Relationship
Even after a deal is done, Tetakawi stays by your side to make sure that its manufacturing partners file the necessary reports and remain in compliance with the many rules and regulations in Mexico. This way, the manufacturer will continue to reap the benefits of the many incentive programs available and avoid unnecessary penalties that come with noncompliance.
By following an organized and well-researched path for site selection and the launch of a new manufacturing operation, companies will be confident that they are optimizing their presence in Mexico for years to come.