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The Advantages Of Shelter Operations In Mexico

Author: Ive Msa
by Ive Msa
Posted: Apr 13, 2016
shelter operations

Companies that choose to expand across the US/Mexico border may enjoy a number of competitive advantages over their domestic competition. In the same way, these selections will be presented in different ways with varying levels of investment in labor and machinery.

Creating Shelter Operations is an increasingly popular option for companies looking for new ways to invest in Mexico.

By working beneath a shelter operation, an organization will work under the umbrella of another manufacturing firm which is established and licensed to operate in Mexico. This option presents smaller risks and requires smaller investments in capital. Such a shelter also allows the sheltered company to more easily overcome any cultural divides that may exist, thereby minimizing the difficulty of becoming acclimated to the business culture in Mexico.

ITEMS INCLUDED IN SHELTER OPERATIONS

As more companies begin to consider the option of installing operations in Mexico this way, it is generally expected that the "shelter" provided by the umbrella company should provide the following;

  • Start-up capital

  • Industrial facilities with necessary utilities

  • Sourcing of direct/indirect labor

  • Up-to-date regulatory compliances

  • An established logistics network

  • Stable relations with local government and union entities

  • Maintenance Repair Operations procurement

The amount of direct involvement the sheltered company wants to have in the everyday operations of the "shelter" corporation can be a matter for negotiations between the two organizations. These aspects of the relationship can be customized to suit each individual company's business needs. In the same way, companies can customize production schedules, MRP systems, quality systems, and more.

The terms of a takeover or buyout deal will be pre-negotiated. Multi-year agreements may also be available. Fees will vary, buy they will usually be structured around the occupancy of the space or facility, the size of the workforce, and the production time needed.

To learn more about the process of setting up a shelter manufacturing arrangement in Mexico, we recommend reading the case studies of organizations that have leveraged such an opportunity successfully.

About the Author

Ivemsa offers full shelter Mexico manufacturing services. Learn how Ivemsa can help lower manufacturing costs and maximize efficiency.

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Author: Ive Msa

Ive Msa

United States

Member since: Feb 01, 2016
Published articles: 11

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