5 Questions to Quickly Evaluate a Shelter Services Partner
10.04.23When nearshoring to Mexico, there’s the option of setting up a standalone entity or operating under a shelter company. Most U.S. manufacturers agree working with a Mexico shelter services partner is key to their production strategy. However, there are several to choose from, all which may offer similar services and benefits.
Therefore, it’s best to first assess if a shelter model is the most beneficial option and then, decide which shelter company is the best fit. Here are five questions to help make the right choice.
1. Do I have the capacity to handle this on my own?
The answer is probably not. For U.S. manufacturers nearshoring to Mexico for the first time, it’s best to work with a shelter services partner. Even industry experts aren’t sure about where to start in terms of site selection, recruiting, and compliance.
All of the administrative responsibilities necessary to launch production are included when operating under a shelter. Plus, it minimizes a manufacturer’s risk and liability of doing business. There is a learning curve when operating in a foreign country, and it’s beneficial to have a qualified team to ensure everything is set up smoothly.
2. Is it necessary to maintain production control?
Though some may consider operating as a standalone entity or employing contract manufacturing as a solution, a shelter company provides benefits the other options do not. If maintaining operational and intellectual property control is a priority, then the shelter model is the way to go.
Though a shelter company can also provide Mexico shelter services to standalone entities; ultimately, they still assume all risk and liability without the protection of the shelter umbrella. Additionally, manufacturers that choose contact manufacturing do not maintain full oversight over their production, processes, or property.
3. Am I equipped with the right technology?
A key part in working with a shelter services partner is to improve economies of scale. This is achieved through access to supply chain management and inventory technology that maintains compliance and allows operations to run more smoothly.
In addition, having both U.S. and Mexico trade and compliance experts is necessary to keep current with changing regulations to avoid penalties and avoid setbacks. Usually, U.S. and other foreign manufacturers don’t automatically have the compatible technology or local expertise necessary to operate in Mexico.
4. How transparent is the shelter services pricing?
Pricing is a key factor when evaluating a shelter services partner. IVEMSA is transparent and offers one price for the full suite of Mexico shelter services. There are no hidden costs or surprise fees, as is often the case with other shelter companies. Therefore, manufacturers can plan and budget according to their specific needs.
5. Does the shelter company have a good reputation?
Though industry expertise should be assumed with any shelter services partner, a longstanding reputation in the industry helps manufacturers make the connections they need to be successful. With everything from expansive recruiting networks to established government contacts, IVEMSA provides nearly 40 years of shelter services experience and solutions.