Electing to manufacture in Mexico must be a strategic decision. Firms wishing to source from Mexico in a “quick and convenient” manner with the desire to find a Mexican supplier who “Already makes our product” or who simply wish to “buy finished product” out of Mexico will not be successful. The Mexican sourcing process is highly complicated when compared to other countries and regions due to raw material availability, supply chain integration issues, Mexico’s complex business culture and a variety of other reasons. Looking for a quick fix out of Mexico to manufacture one’s product will result in a colossal failure in nearly all cases.
Our process is one in which we strategically analyze all aspects of a product and/or component(s) prior to making recommendations to the client and moving forward with a comprehensive Mexico supply chain localization strategy. In many cases, not all parts and components, or even raw material will be readily available or competitively sourced from Mexico. Thus, a comprehensive strategy for nearshoring a product, family of products, parts or components is essential. In most cases, our general Mexican sourcing process goes as follows:
Pre-Analysis Phase:
Execute NDAs
Receive client specs and samples at our offices in the USA or Mexico.
Perform sample analysis for Mexican manufacturing viability (competitiveness, overall supplier capacity and quality)
Develop strategic souring/supply chain development and integration strategy for the client – including timelines, deliverables, and budget.
Implementation Phase:
Contact Mexican Suppliers for RFIs
Receive RFIs
Meetings with Mexican Suppliers to review capabilities and overall interest in nearshoring project (virtual and in-person)
RFQs from Mexican Suppliers
Analysis of first round of RFQs (nearly always off from client’s target pricing)
Second/third rounds of bids from Mexican suppliers
Client visits to supplier facilities in Mexico
Additional negotiations on-site in Mexico (pricing, volumes, deliverables)
Client and Mexican manufacturers agree to final pricing and deliverables
Contracts are signed
Mexican suppliers begin ramp-ups under client supervision and supervision of SOUTHWARD sourcing team
Tooling is produced and/or moved to Mexico
Production begins