Even after considerable NAFTA-related growth, the capacity of transportation and ports of entry into Mexico has lagged behind demand. Other factors, including counter-terrorism measures at the border and extended waiting times at customs, have contributed to congestion at ports of entry, resulting in unpredictable delays and higher costs in shipping materials from the U.S. to south of the border.
This situation impacts the businesses of many American and international OEMs who need reliable access to receive ancillary items that support their manufacturing processes, such as components and integral assemblies as well as packaging and material handling containers that are necessary to producing finished goods. But when logistical nightmares occur, added lead times and resulting shortages cause OEMs to temporarily disrupt manufacturing operations or shipping while they await the arrival of the needed materials.
In some cases, American OEMs are experiencing difficulties getting thermoformed components and containers to their assembly facilities in Mexico. Such thermoformed items include plastic panels and covers, assemblies, custom material handling trays, as well as standard items such as plastic pallets and totes that are commonly used in production and distribution processes.
Some suppliers are opening facilities south of the border to capitalize on the need of international OEMs looking for quality suppliers.
JIT is Easier When Local
“One of the most important benefits we get from working with a U.S. supplier who has a local operation is that, because they are very close to our plant, we get deliveries very quickly,” says Francisco Davila, Logistics Project Engineer at Magna Powertrain, a division of Magna International (Aurora, Ontario, Canada). “Not only do we have Just-In-Time service, but we also avoid all of the expenses of transportation from other areas such as the U.S.”
Magna Powertrain is a supplier for the global automotive industry with services including powertrain design, development, testing and manufacturing. At Davila’s plant, located in Ramos Arizpe, in the greater Saltillo area in the state of Coahuila (Northern Mexico), the company produces transfer cases for truck applications.
The transfer cases are machined components that are conveyed from the machine shop to the assembly line in custom, reusable trays produced by the local Fabri-Form plant in Ramos Arizpe.
Fabri-Form is a New Concord, Ohio-based company that designs, engineers and produces thermoformed plastic products, including reusable packaging, and components used in commercial vehicle, automotive, recreational, agricultural, and industrial applications.
In 2012 the company opened its Ramos Arizpe facility to support a growing customer base in Northern Mexico. The modern 50,000 square foot facility expands the company’s capacity to produce component parts for the heavy truck industry as well as custom transport packaging for various industries including automotive and industrial.