Staying Logistically Competitive When Manufacturing in Mexico
12.10.19
To fully benefit from manufacturing in Mexico, it’s essential to be competitive in terms of logistics. There are several complex areas that must come together in a smooth, efficient way in order to be effective and more importantly, stay compliant. These include coordinating transportation, inventory management, and supply chain technology.
When best practices are implemented in these areas, it creates a streamlined process and improves the way a manufacturer operates while maintaining top-quality performance. For new companies that want to start manufacturing in Mexico, one of the greatest advantages is partnering with a shelter services provider that has proven systems in place and ready to go. A shelter provider that has significant experience and expertise in the field can help to reduce costs and increase productivity for your business.
Coordinating Transportation for Delivery Efficiency
A top area of logistics is coordinating transportation. The scheduling timeline and transportation costs are reduced significantly based on location and one of the advantages of nearshoring to Mexico is proximity. However, to maximize savings, logistics must follow protocol with regards to traceability and safety, as well as the use of cross-docking and/or multimodal transport.
- First, introducing a well-structured traceability process shows the location of products as they’re being transported. This gives businesses stock control and allows for any necessary coordination with distributors en route.
- Second, the use of cross-docking may result in lower costs and faster delivery times, which benefits both the manufacturer and its consumers.
- Third, multimodal transport ships and receives products and materials more efficiently, especially when moving goods internationally.
When working with a shelter services company, an assigned representative guides transportation logistics from a manufacturer-owned or sub-leased warehouse on the U.S. side. The goal is to ensure accuracy of all products, materials, and paperwork waiting to be processed and scheduled in a timely manner.
Inventory Management to Maintain Accuracy
Inventory management is important to ensure the proper distribution of materials to meet demand, but also to verify that everything is labeled and recorded accurately for customs compliance. This is necessary to maintain as part of the IMMEX program. Additionally, items can stall at customs if every entry isn’t exactly matched to the products being shipped.
Speed and efficiency are key but attention to detail is crucial in order to keep the flow moving smoothly. This logistics measure can create a bottleneck if not handled appropriately. Companies can stay competitive by implementing coding standardization to identify products and materials. Other best practices include:
- Following a standard classification practice to prioritize materials according to level of importance
- Managing inventory levels to reduce storage costs and optimize shipping costs
- Providing accurate documentation of all products, materials, and equipment for customs
These protocols are already set in place under a shelter; whereas a company that’s working as a standalone entity loses time by creating new systems, learning about customs compliance, and uncovering faster ways to review inventory without diminishing accuracy.
To maintain accurate records when dealing with hundreds (if not more) products a day, it’s best to work with a shelter services company like IVEMSA that has a strong reputation of reliability when working with inventory management.
Supply Chain Technology for Increased Productivity
As a third way to stay competitive, supply chain technology makes a difference in how processes are run. System automation provides information illustrating logistical areas that can be refined. Some of the systems commonly used are:
- RFID or radio frequency identification systems – This technology works similarly to barcoding by tagging or labeling products with a device that stores pertinent information into a secure database.
- Sales and operations planning software – These kinds of tools help businesses to align logistics and functioning of multiple areas of the company and encourage collaborative planning and forecasting.
- TMS or Transportation Management Systems – TMS covers real-time product tracking and outlines efficient transportation scenarios to optimize shipment needs.
These are a few of the technological advances manufacturers can use to stay logistically competitive when manufacturing in Mexico and achieve success in the most efficient and cost-effective way possible.
When looking for ways to improve logistics, partnering with a shelter services company provides familiarity with the process of coordinating transportation, inventory management, and supply chain technology, among other industry best practices.