As part of the series, read the first blogs, "Is your Multitenant Shelter Holding you Back?", "5 FAQs about Transitioning from a Multitenant to a Dedicated Shelter" , "Unveiling the True Cost: Multitenant v. Dedicated Shelter in Mexico" and "Embarking on your Dedicated Shelter Journey: Transition Success".
The allure of a dedicated shelter in undeniable. Greater control, increased efficiency, and reduced risk are all tempting propositions for companies frustrated with the limitations of multitenant setups. These have been the primary motivators for clients that reach out to Prodensa for support in transitioning their manufacturing operational model in Mexico. We are sharing our tips for a successful transition.
A dedicated shelter operation in Mexico can have great benefits for manufacturers seeking local support while also mitigating the risks of operating in a shared environment. However, the transition itself can be a complex undertaking. Here, we address key areas of concern and offer actionable tips to ensure a smooth move to your dedicated shelter:
Proactive communication is key. Many stakeholders will have a role in the shelter transition, including corporate leaders, local leaders, employees, project managers, current shelter operator, suppliers and local authorities.
A project management plan should cover timelines, potential disruptions and a clear communication process for addressing concerns and managing documentation in an effective manner. There are simultaneous activities that span different parts of the company including Human Resources, Finances, Legal, Environmental, and Trade Compliance. Sharing information is crucial, and a clear leader must have daily control over the necessary activities. The timeline is tight and every day counts.
The realistic goal is to transition the production operation and the employees smoothly, minimize production downtime to the extent possible, and ensure the new operation is ready to go in order to minimize financial or compliance issues. Time is money and mistakes could cause major setbacks.
Its important to consider that some employee benefits may be affected during the transition, such as the reclassification of governmental benefits tied to the employer, as an example. An effective and transparent communication strategy will be crucial so employees understand the process, any impacts, and any compensation adjustments or new perks that may be introduced to offset these adjustments. Since the benefits package can be reestablished in the new entity, there can be a number of possibilities to navigate. A benchmarking analysis would improve the competitiveness of the new benefits and perks package.
Where certain restrictions over corporate identity may have restrained you in the multitenant shelter, a dedicated operation provides the freedom to fully transfer your corporate culture. Consider activities where HR can engage employees for the upcoming transition.
Some services included in the multitenant shelter will need to be sourced and hired, if required, such as cleaning, medical, vigilance, etc. By bringing these services in-house, though, a certain level of cost control can be verified.
Depending on the new entity, certain services and KPIs are going to change. The financial reports will need to be constructed, and corporate bylaws will need to be written. Taking a step in the direction of independence opens up your operation to an endless world of growth possibilities.
By staying vigilant about potential pitfalls and prioritizing clear communication with your dedicated shelter partner, you can navigate the transition with confidence. Remember, a dedicated shelter can be a powerful tool for growth and efficiency, but a smooth transition is essential for maximizing its benefits. Don't underestimate the importance of careful planning, thorough research, and open communication throughout the process.
Over the past decade, PRODENSA has been a leading force in guiding manufacturing companies through the intricate process of transitioning from shared shelter operations to fully independent entities. With an extensive and successful track record across key Mexican industrial regions such as Baja California, Querétaro, Hermosillo, Monterrey, and beyond, we have supported clients across a diverse range of industries and business models.
Our approach is highly customized, designed to meet the specific objectives and needs of each client. Whether the goal is transitioning to a dedicated shelter under our management or establishing a wholly-owned subsidiary, PRODENSA provides comprehensive support in critical areas such as regulatory compliance, operational efficiency, and risk mitigation.
As an authority in this field, PRODENSA offers unmatched expertise in navigating the complexities (and sometimes ambiguousness) of Mexican law, with a particular focus on international trade and compliance regulations. Our deep understanding of Mexico’s regulatory landscape, coupled with decades of practical experience, has earned us the trust of both private sector companies and government agencies alike.
Our unwavering commitment to ensuring a seamless transition sets us apart. We proactively identify and address potential challenges, ensuring that client operations continue without disruption. By leveraging our proven methodologies and in-depth industry knowledge, we help our clients optimize their operations, minimize risk, and position themselves for sustained success in the dynamic Mexican market.
I invite you to sit down with one of our expert advisors to explore the possibilities and discover how PRODENSA can support your business in achieving success and growth in the Mexican market.