Shelter companies make the learning curve associated with manufacturing in Mexico a much shorter one.

Manufacturing in Mexico may, at first glance, seem to be a daunting option for small to medium-sized firms.  As is the case with operating in other foreign nations, manufacturing in Mexico brings with it many challenges and the need to familiarize company leadership and operations staff with the intricacies of running a business within the borders of the country.    In addition to locating a city in which to operate, companies that will engage in manufacturing in Mexico must seek and find industrial space in which to house their production activities.  Once this task has been completed, a company that is manufacturing in Mexico must go through the process of registering itself with the Mexican Government’s equivalent of the IRS.  That agency is called the “Secretaria de Hacienda y Credito Publico,” or “Hacienda” for short.

In addition to bringing it production processes, raw materials and machinery with them, companies that wish to conduct manufacturing in Mexico activities must also recruit personnel that is familiar with the complexities of doing business in the country.   Finding the right human resource talent to staff a plant can sometimes be a long, difficult and costly process.  This is where the services of a shelter company can be of great value to firms that are initiating their manufacturing in Mexico activities.  Shelter companies in Mexico perform all the tasks that are considered to be “non-core” capabilities.   These activities include those related to:

• Recruitment and Human Resources
• Labor Relations
• Mexico Import and Export Services
• Payroll and Benefits
• Mexico Accounting
• Supply Chain Services
• Mexico Purchasing and Vendor Management
• Facilities Management
• EH&S Compliance Services

By manufacturing in Mexico under the shelter service model, companies can take full advantage by using the capacity for conducting non-core functions that the shelter company has developed over the years.  In essence, rather than spending the time and money needed to staff and create an in-house capability to perform these functions, companies can start up and continue their manufacturing in Mexico by “plugging into” the infrastructure that the shelter company has put into place.    This allows companies not only to enter the market through a mechanism that is set up and run by experts but also allows them to focus fully on their core manufacturing functions.

When considering the possibility of manufacturing in Mexico, decision-makers must be aware of the fact that there are several versions of Mexican shelter companies that offer services in the marketplace.  The first type is called a “full-service” shelter.  In this version of the business model, companies enter Mexico under the business license of the service provider.   Client companies are seen as “departments” of the shelter company and do their manufacturing in Mexico in an environment that reduces both risk and liability.  Another feature of full-service shelter companies is that they own real-estate and provide manufacturers with industrial space in which they can make their products.

Another version of the shelter company in Mexico is comprised of services only.  In this mode of operations, firms manufacturing in Mexico contract with the shelter company for the non-core services listed above.  They do, however, contract with a third-party to secure industrial space in which to elaborate their products.

The third type of shelter company allows firms that have decided to do their manufacturing in Mexico to choose the services that they require  “cafeteria” style from the full menu of offerings that it makes available.  Companies choose the services which they prefer to do in-house.

Remember, interested parties can receive Mexico manufacturing information on a weekly basis by SMS Texting the word Tecma to 96000.