Contract Manufacturing: Strategies for Starting Manufacturing Operations in Mexico
Starting manufacturing operations in Mexico involves a series of critical steps and milestones that new manufacturers must navigate. According to Juan Carlos Posada, Business Development Manager at Grupo Prodensa, the process begins with securing legal possession of a facility. “It all starts with having legal possession of a facility, ownership of a facility,” he explains. This foundational step is crucial as it allows manufacturers to officially start setting up their operations.
Once the legal groundwork is laid, attention shifts to human resources and regulatory compliance. Hiring the first employee marks a significant milestone, signaling the commencement of operational activities. Simultaneously, securing essential permits for international trade, such as the IMEX program and importer registry, along with conducting an environmental impact study (EHS), ensures compliance with local regulations. These steps are vital for establishing a solid operational base. Posada emphasizes, “We always need to focus on having the right permitting from EHS to be able to accredit that you will be starting operations in Mexico.”
Prodensa’s approach to supporting new manufacturers involves a partnership model where clients focus on product quality and development, while Prodensa handles operational compliance. “We focus on the back end of all the administrative tasks that have to be fulfilled for the client to focus and have all their energy based on the quality of their product,” says Posada. This division of labor allows clients to concentrate on perfecting their products without being bogged down by administrative tasks. Ensuring that manufacturing processes meet all regulatory standards is a key part of Prodensa’s support.
One of the most challenging aspects of starting manufacturing operations is executing the first export. This process involves navigating various regulatory and logistical hurdles, including coordinating with government agencies for permits, securing utilities like electricity from CFE, and establishing relationships with key stakeholders. Achieving the first export is a significant milestone that requires careful planning and execution. Posada notes, “One of the biggest challenges is to be able to relate with other parties that are involved regarding permits such as the government to provide permits CFE to provide to you the utilities that you require, such as electricity.”
The trend of nearshoring, where manufacturing processes are relocated closer to the target market, has created new opportunities for companies operating in Mexico. However, this trend also presents challenges in maintaining quality and efficiency to meet client expectations. Nearshoring allows manufacturers to reduce costs and improve supply chain efficiency, but it requires robust planning and execution to be successful. “Nearshoring in Mexico has been able to help these manufacturing companies to start up operations,” Posada mentions, highlighting the advantages and challenges of this approach.
Effective project management is crucial for ensuring successful manufacturing operations. Detailed planning and efficient execution are necessary to meet client expectations and achieve project milestones. Using project management tools, Prodensa helps clients plan and execute their manufacturing operations efficiently, ensuring that all regulatory and logistical challenges are addressed. Posada states, “With the correct know-how and knowledge, we can guarantee that we can fulfill the outcomes expected by the clients.”
A noteworthy success story from Prodensa involves a client who was able to perform their first export within three months of finalizing their lease agreement. This rapid turnaround time highlights Prodensa’s expertise in facilitating smooth and compliant manufacturing startups. “One of my best experiences was guaranteeing that one of my clients was able to perform its first export in a three-month period,” Posada recalls. Such success stories underscore the importance of effective project management and consultancy services in overcoming initial challenges and achieving operational goals.
Starting manufacturing operations in Mexico involves a series of strategic steps and milestones that are essential for success. By focusing on legal ownership, human resources, permitting, compliance, and strategic planning, manufacturers can overcome initial challenges and capitalize on the growing nearshoring opportunities. Prodensa’s role as a partner in this journey ensures that clients can focus on product quality while leaving the complexities of compliance and operational setup to the experts. Posada concludes, “It’s practically a partnership where they focus on the product and we focus on having compliance and making sure that we have the correct resources to be able to develop a product.”
Discover Prodensa’s Comprehensive Services
Are you ready to take your manufacturing operations to the next level in Mexico? At Grupo Prodensa, we specialize in providing end-to-end solutions that ensure your business complies with all local regulations while allowing you to focus on what you do best – delivering high-quality products. Our expertise in project management, compliance, and operational setup has helped numerous companies successfully launch and expand their manufacturing operations.
Discover how Prodensa can support your business journey and turn your manufacturing goals into reality. Visit our website or contact us today to learn more about our services and how we can help you navigate the complexities of starting manufacturing operations in Mexico. Let us be your trusted partner in achieving operational excellence and driving your business success.
