EMSNOW Mexico Executive Interview: Juan F. Fregoso and Julian Searle, Supply Chain Resource Group

EMSNOW Mexico Executive Interview: Juan F. Fregoso and Julian Searle, Supply Chain Resource Group

Supply Chain Resource Group (Formerly Riverwood Solutions Inc.) helps OEMs and Brand Owning Enterprises (BOEs) optimize their operations. The company provides operations consulting and managed supply chain services to technology product companies on a global basis.  As such, they see what is happening ‘on the ground’ as OEMs make their manufacturing decisions in response to geopolitical events. EMSNOW Mexico caught up with Supply Chain Resource Group’s Juan F. Fregoso, Managing Director, Mexico and Europe Ops and Julian Searle, Vice President Business Development to find out what they are seeing.

 

EMSNOW: Please give us a general overview of your business in Mexico.

Juan FranciscoIn Mexico, we focus our service offering in three models:

VOT: Virtual Operations Team, where we offer Purchasing and planning support to foreign companies mainly from USA, we act as an extension of their materials team with highly skilled bilingual resources that can jump in at any time to help scale the growth of our customers at a lower rate. We work together to determine the metric (i.e. number of PO’s /month) to determine the resources needed to perform the activities. The key advantages of this service are, we are in the same time zone; we offer direct virtual interaction with sourcing teams based on US; we have a wide knowledge of different ERP systems such as: BAAN, SAP, NetSuite, Oracle, etc

In addition, we provide document control services with experienced resources in setting up and maintaining Item Masters, BOM’s, AVL, ECN’s/ECO’s etc

HOST Services HOST℠ (Hybrid Outsourced Services Team) Model provides highly skilled local resources in the world’s low cost manufacturing centers to help OEMs manage their supply base and improve supply chain performance without adding fixed costs or internal infrastructure.

scrgSOFT Landing Services: We act as a fully independent advisor and we work with our customers hand by had to determine the best way to settle in Mexico, providing key decision making information such as:

    1. Cost of land
    2. Lease rates
    3. Labor rates in main manufacturing areas of Mexico
    4. Contacts (suppliers, customers, executives)
    5. Connections (government, local chambers)
    6. Partners (Legal, Accounting, HR and Real Estate)

With a robust set of information we help our customer to determine: Make or buy (establish their own operation vs outsourcing from a local supplier); Ideal location’ Green Field, Brown Field (either leasing or building); General contractor bid process and Project management (even with tenant improvements)

 

EMSNOW: What are you seeing in the market this year; what are the positive trends?

Lots of new business opportunities, the fact that T-MEC (the new NAFTA agreement) is around the corner and with the tariffs war between USA and China, both these trends will make Mexico the place to be.

We have been getting requests from our customers to support either project transfers from China to Mexico or sourcing support for local players for several items that range from high tech complex products to simple power supplies. The current and potential future import tariffs are making Mexico competitive again on commodities that were no longer a fit for the region

 

EMSNOW: What are the challenges in the region this year?

To recover the skills and mind set of high volume – low mix products, this requires an even higher focus on efficiency as the gross margins are lower and there will be no more room again for mistakes. These projects coming from China will need an immaculate transfer and execution; the communication between teams, even within the same company, will be key for success. Mexico has faced a similar scenario back in the 2000’s but we were the “senders.”  Now we will have to act as “receivers” and we need to rely on the accuracy and robustness of the information from the new “senders;” this process will really challenge the so called “ww process standardization” of the Tier 1 and 2 players, that is always shown in sales pitches as a competitive advantage but now is the time to test it in real life.

 

EMSNOW: What has been the impact of the change in the government on your business? On the overall industry?

It is too soon to evaluate the impact, either good or bad, but the fact that the new government is in line with the T-MEC agreements made by the previous administration, is a good signal of continuity. There has been a slow down on the process of getting Federal Incentives for foreign companies, but it is mainly driven by the new management running the government offices that allocate those resources, it is a matter of months to get back to normal.

 

EMSNOW: What is the impact of the U.S. tariffs on China on your business?

Definitely, it is a situation that will benefit Mexico, therefore, the economics around it will positively impact overall business dynamics. As mentioned before, we are getting lots of requests for support on either transfers of projects from China to Mexico or sourcing support of local suppliers.

Manufacturing in China is not going to simply stop; there are a lot of great resources and skills in China that our customers depend on. Depending on the market and the needs for alternate or non- tariff supply lines there is clearly a lot of business picking up in Mexico.

EMSNOW: What are the unique opportunities for growth in Mexico?

I don’t see a “unique” set of opportunities, I see the consolidation of current business models such as Mid-Vol/Low-Mix, BTO, CTO and an overall growth of the industry with the additional high-mix/high volume projects coming back to Mexico. tThis could mean close to double digit growth in the EMS industry this year.

EMSNOW: Anything else you’d like to share with our readers?

Innovation, new technologies and business dynamics are changing the industry, however, good communication keeps being the basic foundation of business practices.

Recent Video

Loading...

Follow Us

Grow Your Knowledge

Subscribe to
EMSNOW's DAILY BRIEFING


It's how the industry starts every day. EMS News, Data and Insights.

Don't miss another post!

That's it, you're done!


Recent Videos

Share This