The Scoop on Mexico Sourcing (Part 2)

Last week, I had the chance to catch up with German Dominguez in Chicago. German, who is based in Mexico but has worked extensively in the United States as well, is an expert on sourcing in his native country. We had the chance to connect over a bunch of issues, ranging from categories which are best suited to the manufacturing environment in Mexico through to tips on supplier development in the region. This is the second post in a three-part series.

In the initial post in this series, we touched on the inexperience of many suppliers in handling complicated cross-border JIT and VMI programs. Compounding the challenge when it comes to these types of initiatives are border waits. Currently, depending on the crossing location, it can take anywhere from 2 hours to half a day to cross the US / Mexican border. This is unacceptable to many, including a group of manufacturers who got together to attempt to streamline the crossing times (but have not been as successful as many would have liked). As a result, Mexican suppliers often have to hold finished parts inventory for their customers in El Paso or other cross-border areas on the US side. Mexican suppliers also often keep materials state-side in distribution centers before bringing it in. But the delay on both ends -- which is longer on the Mexico to US crossing -- can be problematic.

One way of getting around delays from logistics bottlenecks is to streamline production processes to accelerate manufacturing and material flow. But when it comes to supplier development initiatives, many US companies have a lot to learn about doing business in Mexico. One of the most important lessons for US companies working with Mexican suppliers should be patience. In Mexico, things do not happen overnight. This is a fact of life in region. However, you also can't be seen as being rushed or pushy.

Mexican suppliers like to look at their customers as approachable, otherwise they won’t ask questions (which will lead to assumptions which quite often might be incomplete or wrong). Politeness and a sixth communications sense are key. For example, on a conference call or an in-person meeting, a supplier might not tell their customer that they are not clear about a specification. It is up to the supplier development team to discern that things are not entirely clear, lest a production defect develop as a result. But if you are too aggressive in your dealings and recommendations, you will quickly discourage Mexican suppliers who will view your relationship as more trouble than it is worth.

Striking a balance and sensing rather than judging is key. Fortunately, it's not essential to have strong Spanish language skills for doing business in region, contrary to popular belief. You can do business in English. Still, make sure you've adapted to the sensibilities of Mexican business culture even if you don't speak the actual language fluently!

Check back tomorrow for the final installment in this series. In the meantime, if you haven't gotten your fill of Mexico sourcing yet, I'd suggest looking at Spend Matter's affiliate blog, Metal Miner, which recently ran a series titled "Mexico: Where to go for metal parts and assemblies?" Click to read Part 1 and Part 2.

Spend Matters would like to thank German Dominguez for offering up his insights into the sourcing environment in Mexico.

- Jason Busch

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