4 Common Concerns U.S. Auto Parts Distributors Have About Outsourcing To Mexico
At the turn of the century, U.S. and Canadian companies started noticing the many benefits of manufacturing in Mexico. Today, over 35 billion U.S. and Canadian dollars have been invested into Mexican manufacturing facilities, and the number of U.S. and Canadian businesses outsourcing to Mexico continues to grow every year.
Manufacturing in Mexico is a great solution, but it still comes with a few unique challenges that may worry U.S. and Canadian businesses looking to outsource to their southern neighbor.
Let’s cover four of the most common concerns surrounding Mexican manufacturing:
1. Workforce Turnover
Jobs are becoming more plentiful in Mexico, and while it’s great for Mexican citizens, it can be somewhat of an issue for U.S. companies looking to outsource to Mexico. Often times, an influx of jobs in an area leads to a higher turnover than usual. That can create some production issues, such as:
- Problems with consistency in terms of quality and production time
- Loss of production process knowledge
- Communication issues
Your business is only as good as your manufacturer’s. If your Mexican manufacturing partner has low retention rates, your business will suffer. The good news is that you can avoid running into this problem if you do your research.
How To Alleviate This Concern
A company that treats its employees well is likely to have high retention rates. When you find a manufacturer you’re interested in partnering up with, it’s worth checking out their work environment before committing to anything. You can do this several ways:
- Visiting the manufacturer’s plant and try to gauge the employees’ feelings. Do they seem stressed out? Angry? Happy? Content?
- Asking the manufacturer outright about the compensation and benefits package they offer to their employees. The more attractive the compensation and package, the more likely their employees will stick around for a while.
Of course, you can play it safe and partner up with a manufacturer that has been around for decades and has a solid reputation.
2. The Language Barrier
Language barriers can lead to problems, including low productivity, production delays, and incorrect orders. They also make problems harder to solve. When it comes to any type of business relationship, communication is key. When you have a hard time communicating with your manufacturer, you may run into misunderstandings that can cost you a lot of time and money to fix.
Rest assured that there are many bilingual businesses in Mexico, with most employees at the top levels speaking English. It’s pretty easy to find an English-speaking Mexican manufacturer and establish a successful working relationship.
How To Alleviate This Concern
To find out if the manufacturer you’re interested in can communicate and collaborate with you without any barriers, cold call them. You don’t want to judge a manufacturer’s ability to communicate in English by looking at their website or speaking to a salesperson. You want to find the person (or support staff) you’re going to be collaborating with the most and find out how well you can carry a conversation with them.
If you’re feeling bold, you can also ask the manufacturer for their past and/or present client list. It’ll tell you how many long-term English-speaking clients they have.
Another way to find out is to go over there in person and speak to some of their staff on the floor. The more bilingual staff they have, the better.
Here at Intran, we have many bilingual employees because we understand the importance of communication.
3. Limited In-House Engineering Expertise
Many Mexican manufacturers don’t offer extensive in-house engineering expertise. That can lead to problems down the road regarding product design improvement and production processes. You shouldn’t let this fact turn you away, though, because there are manufacturers in Mexico that work with talented engineers. Intran is one of them.
How To Alleviate This Concern
The easiest way to put your worries to rest is to find out if the manufacturer you’re interested in has enough engineering resources. You can do this by:
- Asking about their design services and samples. They’ll be able to tell you if they have an engineering team that can help design or improve your products and solve any unforeseen manufacturing problems that may arise.
- Visiting the facility and meeting their engineering team. If they have one, that is. This is a good way to test their ability to produce an engineer on short notice. If they can’t do that, then they probably won’t be able to get one to provide immediate assistance during a production crisis.
It’s worth mentioning that a manufacturer might not have an official engineering team, but they might have a few senior staff on board who are capable and qualified to solve design- or production-related problems. The best way to find out how efficient they are is to look at their design samples and ask for success stories from other clients.
4. Different Communication Styles
The U.S. is pretty big on instant gratification. Because everything must be taken care of immediately, instant customer support is considered a right, not a privilege. The lifestyle in Mexico is much more laid back, so it’s normal for Mexican businesses to take a couple of days to respond to emails and phone calls.
Many tourists would find Mexico’s slower-paced lifestyle alluring, but U.S. businesses typically expect more from their partners. They can’t afford to sit around and wait for their Mexican partners to respond to their messages because they have to keep up with the pace set by their U.S.-based customers and competitors.
Good news: this issue is easy to solve.
How To Alleviate This Concern
To overcome some of the key cultural differences between U.S. and Mexican businesses, both you and your Mexican auto parts manufacturing partner can try to meet in the middle. A good way to start would be to read up on cultural tips and tricks for doing business in Mexico.
When you find a Mexican manufacturer that emphasizes U.S.-style customer service as one of their unique selling propositions, don’t bring them on board right away. You want to test them first to see if they’ll deliver on their promise. You can do this by contacting their customer service department. That way, you get a feel of how responsive they are with their regular customers. Contacting one of their salespeople is not a good way to find out the company’s responsiveness, as salespeople are trained to reply promptly.
If you’re pleased with a manufacturer’s response time and you decide to sign a contract with them, it can’t hurt to include a clause in the contract specifying acceptable response times.
With Intran, you don’t need to worry about any of the above concerns. Intran is an established business with decades of experience, many multilingual employees, low turnover, a lot of engineering expertise, and a U.S.-type approach to customer service.
Ready to learn more about manufacturing in Mexico? Contact us today.