China to Mexico Manufacturing Move Saves $1m

Pauline sources a new manufacturer in Mexico.

This electronics company supplied hand held electronic devices as part of their range, mainly to the US. In fact 95% of their market was in North America.

The parent company used to have the products manufactured in China by an Original Equipment Manufacturer (OEM) Company and then shipped to the US for distribution to their clients. This meant there were long delays between a client placing an order and them receiving the goods.

From a previous contract, where I spent three weeks in Mexico, I knew that manufacturing in Mexico was comparable in cost to manufacturing in China. With my network in Latin America I was able to examine the feasibility of having the OEM supply partner in Mexico instead.

The advantages were significant. Mexico is part of the USMCA which meant smooth import of the devices to the US. Additionally the distance between the place of manufacture and the client were reduced which cut down lead time – from order to receipt – from 45 days (sea), 20 days (air) right down to a maximum 15 days which came in at a much lower cost and, with revisiting the production line build requirements, an improved quality.

I led the project feasibility, partner selection, price negotiations and implementation of the new supplier.  The change also had a positive effect on the repair times for these devices which led to improved perception of the company and higher levels of client satisfaction.

This saved the company $1 million in the first year alone.

I have recently been recognised by the Department for Business and Trade for my experience with manufacturing and distribution companies looking to expand into the Latin and Caribbean markets. This means I am included within their External Referral Pool of service providers that help UK companies develop their business in the LATAC region.