CASE STUDY:
A California manufacturer of thermal insulation products for different industrial applications
The Inshoring Model for manufacturing in Mexico
PROJECT OVERVIEW
This goal was met within the first 8 months, but growth did not stop there. Business was great and within 3 years the operation had reached 150 employees and was had acquired an additional 10k ft2 mezzanine to add production space.
An expansion is underway, driven by successful growth in their market. In fact, their sales grew 60% during their first 3 years due to a great improvement in their turnaround time. The company is transferring operations to a new, 110k ft2 industrial space, with plans to grow to about 200 employees in the near future.
THE INSHORING MODEL
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Sergio Vindiola
Operations Manager
- Located in Mexicali, Baja California
- PRODENSA Project Manager since 2015
- Experience with more than 20 manufacturing start-up projects in the region
The Background
Coming off an unfavorable experience with a contract manufacturer, our client prioritized the protection of their intellectual property. They had been frustrated to learn their partner was supplying to their competitors as well.
The project drivers:
- Take full control over manufacturing and quality processes and connect the production process with new prototyping
- Provide easy access to their existing manufacturing footprint as well as suppliers
- Find operational partner in Mexico so they did not have to rely on their corporate team to administer the operation
The Decision
There were multiple options to provide the necessary support for our client according to their business plan and goals. After walking them through different operational models and assessing their goals, the client chose the Inshoring Model.
Decision factors:
- Trusting PRODENSA to administer their facility, applying over 40 years of best practices learned from various industries
- Ability to have IMMEX operations with VAT Certification in place from day one allowed them to protect their cash flow
- Time-to-operation was a key driver as a new contract was being signed that required an increase in production
CHALLENGES
- Relatively low budget for design, implementation and marketing
- 8-week time constraint for the whole project
- Website must match existing digital corporate identity
- Website should be deeply integrated into the HubSpot solution
- Design & development from scratch is not feasible
- Customer would like to be able to edit content and structure
- Website must be implemented in three languages
- Webdesign must match modern design standards
OUR SOLUTION
Inshoring provided our client a domestic manufacturing solution with risk-free access to the cost-benefits that Mexico provided for their manufacturing operation.
Their initial location consisted of a 25k ft2 industrial building in San Luis Rio Colorado, just across the border from Yuma, Arizona.. Their workforce quickly grew to 60 employees, meeting their first phase goal in 6 months. Soon after their operation housed 90 employees, and another 10k ft2 of production space was acquired via a mezzanine.
At the same time, their clientele grew and they were taking on more product orders. The quick ramp-up of their facility allowed them to exceed customer demands, slashing turnaround time from 2 months to just about 3 weeks. Their sales quickly grew by more than 60%, and their plans quickly turned toward continued growth in the region.
After 3 years of continued growth, the client has set their sights on a larger production facility. They are moving to a 110k ft2 facility in the same town, allowing them to preserve their hard-working employees. Currently at 150 employees, their growth will allow them to grow to about 200, and continue taking on more orders and new clients.
The new facility gives them more production space and more capacity for store inventory which will further improve their turnaround time. Their transition has a built-in plan for growth, with the potential to expand their product offering.
The Inshoring Model provided our client protection to their cash flow during the crucial ramp-up phase while allowing them to meet new contractual demands in the most agile way. After 3 years, the client continues growing thanks to the speed-to-market and partnership with PRODENSA through the Inshoring Model.
