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Strategic Sourcing For Manufacturing Services Dearborn MI / May 2015 Salomon Noble INTERMEX Industrial Parks PROPRIETARY INFORMATION
Think Mexico, Think Intermex
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Strategic Sourcing For Manufacturing Services
Dearborn MI / May 2015
Salomon Noble
INTERMEX Industrial Parks
PROPRIETARY INFORMATION
Think Mexico, Think Intermex Strategic Sourcing Fundamentals
1. What ? 2. Where ? 3. How ? 4. Why ? 5. How Much ?
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The Thinker / Le Penseur Auguste Rodin 1904
26 Tips throughout the presentation ! PROPRIETARY INFORMATION
Think Mexico, Think Intermex
1.0 WHAT Product ?
Full - Assembly Sub - Assembly
TIP 1 / Engineering, Visuals, Routings, Tooling, “Golden Standard” TIP 2 / Phased Transition, Technology Transfer Plan & Certifications
3 PROPRIETARY INFORMATION
Think Mexico, Think Intermex
2.0 WHERE ?
TIP 3 / The 3L Rule: Location, Location, Location
4 PROPRIETARY INFORMATION
Think Mexico, Think Intermex
3.0 HOW ?
TIP 4 / Risk Optimization while maintaining Total Operations Control Tip 5 / “Worry Free” Soft landing strategy through a Shelter Program
Wholly Owned Foreign Subsidiary “WOFS”
Contract Manufacturer “Sub-Contractor”
OPERATIONS CONTROL EXPOSURE
Total Greatest
Minimal None
The Shelter Program Total None 3.1
5 PROPRIETARY INFORMATION
Think Mexico, Think Intermex
SHELTER’S SUBSIDIARY
COMPANY CUSTOMER
SHELTER & REAL ESTATE
PROVIDER
Raw Materials Equipment Tech. & Train. Management
Personnel Production
Core-Processes Finished Goods
SERVICES Human Resources
Administration & Acct. International Commerce
Environmental Overall Compliance
INVOICE Shelter Fee
Industrial Facility Lease “Pass Thru” Expenses
3.1 HOW / “The Shelter at a Glance”
TIP 6/ Guarantee Mexican Law, rules and regulations COMPLIANCE TIP 7 / OUTSOURCE NON-CORE Manufacturing Support Services
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PROPRIETARY INFORMATION
Think Mexico, Think Intermex
4.0 WHY ?
TIP 8 / Focus on What you do Best! Tip 9 / Leave the Rest to the Shelter Provider
TIP 10 / Maximize your Operation’s Competiveness !
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ECONOMIES OF SCALE $$
PROPRIETARY INFORMATION
Think Mexico, Think Intermex
4.1 Examples WHY ?
TIP 11 / Many corporations “Landed” in Mexico THROUGH THE SHELTER PROGRAM
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Think Mexico, Think Intermex
5.0 HOW MUCH ?
TIP 12 / Get a Cost Model from your Shelter Provider TIP 13 / Pro-forma the Operation’s Expenses by City/Market
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THE SHELTER COST MODEL
PROPRIETARY INFORMATION
Think Mexico, Think Intermex
THE SHELTER COST MODEL “3 Steps” to Pro-forma
10 PROPRIETARY INFORMATION
Think Mexico, Think Intermex
STEP 1: Industrial Sector & Processes Match
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Sector / Process Aeronautic Automotive Medical Electronics Appliances Other
Assembly
Sheet Metal
Precision Machining
Injection Molding
Extrusion
Other
PROPRIETARY INFORMATION
Think Mexico, Think Intermex
STEP 2: Populate Questionnaire / Planning Premises
Cost Model does not include: Non Recurring Expenses (NRE), Raw Materials, Equipment & Depreciation, “Ex-Pat “Costs
Case Study 1 / Automotive wire harness assembly
Location:Sector:Process:
Product:
Year 1 Year 2• Direct: 100 400• Indirect Hourly: 0 0• Indirect Salary: 44 136• Total Headcount: 144 536
Shift:
Facility Size:
Exchange Rate:
75,420 Sq. Ft.
Chihuahua, Chihuahua, MexicoAutomotiveWire Harness assembly.Wire harness assembled parts for the automotive industry.
1st. Shift (total cost based on 1st. Shift only)
Shipments:Inbound (4)Outbound (4)El Paso, TX$13.00 pesos per $1.00 usd$14.50 pesos per US dollar
PROPRIETARY INFORMATION
Think Mexico, Think Intermex
$6.41 $4.84
$1.21
$1.05
$1.10
$0.57
$0.39
$0.17
$1.53
$0.38
$1.30
$0.65
$-
$2.00
$4.00
$6.00
$8.00
$10.00
$12.00
$14.00
100 400
USD
$ /
Dire
ct L
abor
Clo
ck H
ours
Direct Employees
Step 3: Pro-forma Operation Expenses Automotive wire harness assembly Operation Chihuahua Cost Curve
Total Cost / Direct Labor Yr. Hrs.
Shelter Fee
Building Rent
Logistics Cost Facility Op. Expenses
Personnel Related Cost
Labor Cost
$ 11.92
$ 7.67
PROPRIETARY INFORMATION
Think Mexico, Think Intermex
Location:Sector:Process:
Product:
Year 1 Year 2• Direct: 85 200• Indirect Hourly: 0 0• Indirect Salary: 27 56• Total Headcount: 112 256
Shift:
Facility Size:
Exchange Rate:
107,470 Sq. Ft.
Chihuahua, Chihuahua, MEXICOAutomotivePlastic Injection MoldingPlastic molded products for the automotive industry.
1st. Shift (total cost based on 1st. Shift only)
Shipments:Inbound (6)Outbound (6)El Paso, TX$13.00 pesos per $1.00 usd
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Cost Model does not include: Non Recurring Expenses (NRE), Raw Materials, Equipment & Depreciation, “Ex-Pat “Costs
Case Study 2 / Plastic Injection / Plastic molded components
$14.50 pesos per US dollar
PROPRIETARY INFORMATION
Think Mexico, Think Intermex
$7.62 $6.16
$1.08
$1.00
$1.51
$0.93
$0.59
$0.37
$2.46
$1.05
$1.52
$0.89
$-
$2.00
$4.00
$6.00
$8.00
$10.00
$12.00
$14.00
$16.00
85 200
USD
$ /
Dire
ct L
abor
Clo
ck H
ours
Direct Employees
Automotive Plastic Injection / Chihuahua Cost Curve Total Cost
Shelter Fee
Building Rent
Logistics Cost
Facility Op. Expenses
Personnel Related
Labor Cost
DIRECT LABOR
$ 14.78
$ 10.40
PROPRIETARY INFORMATION
Think Mexico, Think Intermex
Cessna – 472,000 Sq.Ft. Campus
Intermex at a Glance
• Established 1971
• 5,000+ employees nationwide
• ISO 9001: 2008 certified
• Over 200 customers from 10 different countries
• One of the most important Shelter Provider and Industrial Real Estate Developer in Mexico
• First “Silver” LEED Certified Industrial Sustainable Building in Mexico
INTERMEX
Textron Bell 120,000 SF Chihuahua city
PROPRIETARY INFORMATION
Think Mexico, Think Intermex The Future is Now … !
Lets make a Deal!
PROPRIETARY INFORMATION
Think Mexico, Think Intermex
Salomon Noble CEO Intermex Industrial Parks www.intermex.com [email protected] Tel +52 (614) 439 – 4012 Mobile +52 1 (614) 345 – 9464 Think MEXICO, Think INTERMEX !!
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PROPRIETARY INFORMATION
