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Mitigate risks with the aid of shelter companies

There is a picture of a beautiful city in Mexico that hosts several foreign companies in manufacturing.
14 Aug 2013

Every manufacturing business has risks in its supply chain, and it's the companies that are able to reduce the amount of threats to operations that will see greater levels of productivity and efficiency. Outside factors including natural disasters, political unrest, demanding customers and shorter product lifecycles are just a few of the disruptions that Gayat​ari Balaji, president of the BPO division at Xchanging identified as threats to a firm's supply chain in an article for Supply Chain Digital. 

By teaming up with offshore shelter companies in Mexico, manufacturers are able to focus on production, and allow these businesses to manage logistics and import-exports services. With reducing risks the No.1 priority for many manufacturers, decision-makers should evaluate their supply chain and realize where shelter companies can help them the most. Here are some of the common issues where manufacturers need assistance:

Financial forecasting
Few manufacturers are able to predict exactly how their supply chain will operate for the upcoming year. When production updates are constant and accurate, firms will have a better opportunity to meet expectations, despite disruptions Shelter companies can reduce the potential for stagnant inventory and slow moving receivables by providing import and export management services that ensure Mexican regulatory compliance, develop startup training for new clients and track freight on a per piece basis. Balaji wrote that when projections and actual demand aren't aligned, manufacturers can see a major strain on their finances. Having facilities in Mexico to manage inventory can make it easier to create on outlook for the remainder of the year.

Unexpected events can always throw off supply chains with little warning. However, if manufacturers are working with shelter companies in Mexico, they will only have to be concerned with production. By allowing offshore firms to effectively manage procurement, manufacturers will not have to be concerned with acquiring raw materials and dealing with suppliers in all corners of the globe. 

Reporting and monitoring
Shelter firms help support a strong supply chain ensuring all business processes keep up with production. By staying in communication with their clients, these businesses will be able to improve supplier solvency or supplier quality management to ensure supply chains will not fall victims to risks. Staying on top of all of the potential problems that manufacturers can face will allow firms to sustain a competitive advantage.

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