Inshoring is a turnkey operations model for manufacturing in Mexico with a local operations partner. It is a proprietary model of Prodensa, aimed at virtually eliminating the operational liabilities of manufacturing in Mexico. A turnkey model, in this case, refers to a pre-existing launchpad in Mexico in which to start your manufacturing operation, in record time.
The inshoring model aims to simplify manufacturing operations in Mexico for U.S. companies.
In the inshoring model, Prodensa provides manufacturing services from our Houston, Texas entity. This entity has a pre-existing Mexican maquila program and tax benefits certification. Utilizing Prodensa's binational operations structure reduces your exposure to an international regulatory environment.
Prodensa acts as the Importer of Record as well as Mexican business owner in front of all authorities. You choose the location and building, and we process the paperwork. Prodensa imports the raw materials through the IMMEX program. You oversee production and quality via a technical services agreement. Prodensa then acts as Exporter of Record of the finished product.
Inshoring was designed to truly eliminate the exposure of doing business in a foreign country, while leveraging the cost-effective manufacturing solution that Mexico provides. The turnkey opreationsl model provides many benefits for manufacturing in Mexico, including:
Speed-to-market can be crucial for suppliers considering nearshoring operations with their clients. A manufacturing company with a straight-forward production process and materials could be up-and-running in as little as 4 months.
The value in inshoring lies in a pre-existing entity in which to launch your own manufacturing operation. This implies that the entity is shared by other companies as well. This limits the ability to take ownership over the entity at a future date; the Mexican entity will always belong to Prodensa.
Additionally, the inshoring model requires certain ownership over machinery and equipment to be transferred to Mexico under consignment, in order to comply with program requirements. In compliance with the IMMEX Program, the finished goods must be exported, physically or virtually. No goods can be sold to the Mexican market.
Nearshoring will most likely continue over the long-term, despite challenges to certain supply chains and the local business environment. Operational partners exist to help navigate the rule changes while facilitating the best practices of world class manufacturing organizations.
Inshoring is one of the turnkey operations models that Prodensa offers for doing business in Mexico. To explore the value of inshoring, check out this case study.