Companies that research the initiation of manufacturing in Mexico operations often do so with the timeframes that they have been tasked to work within in mind. It has been The Offshore Group’s experience that, with knowledgeable guidance, most manufacturing projects in Mexico can be ramped up for production in a period of ninety days. What follows is a brief verbal sketch of what that ninety day period looks like.
- The first phase of the project consists of Mexico manufacturing facility construction (4 - 6 months) or Lease property improvements (30 – 60 days).
During this period a new building is constructed for the incipient Mexico manufacturer’s occupancy, or an existing lease space is fitted up to the specifications and requirements of its new tenant. Activities underway during this phase of the Mexico manufacturing project include:
- Preparation of physical drawings
- Determination of IT specifications and requirements
- Solicitation and receipt of bids from contractors,
- Contracting of utility services, as well as
- Construction of the Mexican industrial building and its subsequent inspection.
- The second phase in the ramping up of a Mexican manufacturing facility consists of putting together the staffing that will enable production to occur. Positions to be filled will include direct labor production workers, engineering staff, quality control personnel, plant management, etc.) With the aid of an experienced partner, the process of staffing the new Mexico production plant can be achieved in 30 – 60 days. Specific activities required to staff operations include:
- Recruitment of both direct and indirect Mexican labor
- Selection of direct and indirect workers
- Hiring of those Mexican workers selected to work in the production facility
- Training (both on and offsite)
- The third phase in initiating Mexico manufacturing operations is the formation of the supply chain. Work on issues related to this critical area of manufacturing operations typically last for a period of 30 - 90 days and consist of the following tasks:
- Sourcing for the Mexico operations
(This sourcing is typically done in the United States and/or in Mexico. It is suggested that MRO items be sourced and procured in Mexico, however).
- Addressing important Customs issues. During this period raw materials, components and equipment are classified and valued, rules and requirements are reviewed and personnel are trained in Mexican customs rules and regulations.
- Researching freight and logistics services providers, determining shipping costs and contracting with service providers
- The fourth step that must be addressed to begin manufacturing in Mexico is the actual production start-up phase. With experienced assistance, this stage of the Mexican manufacturing project can occur within 60 – 90 days. Items that are executed during this period include:
- Shipping and setting up the Mexican production plant machinery and equipment
- Shipping materials required for the production of finished goods
- Procuring MRO items to be used during the course of production
- Production of the first articles for shipment to end users
Although it is noted in the first paragraph of this post that they typical start-up time noted by The Offshore Group over the years has been ninety days, it must be kept in mind that this timeframe is within the context of firms that partner with Mexican shelter companies to initiate and maintain their Mexican operations. Shelter companies typically have started up numerous such operations, and have the people, procedures and expertise in place to ensure that things happen on time, risk reduced and an orderly fashion. Manufacturers initiating wholly- owned subsidiaries in Mexico may have a different experience as to the time it takes for them to begin manufacturing and shipping product under the maquiladora program in Mexico.