Ron Eisele, vice president of operations of Colorado Springs, Colorado-based Minco Manufacturing, Inc, talks to The Offshore Group about operating a manufacturing plant in Mexico products for business equipment for the North American and world markets.
Steve Colantuoni: Ron, I’d just to ask you a few questions about your company and your experiences here. In terms of when did you and your company begin manufacturing in Mexico?
Ron Eisele: I actually started considering moving manufacturing to Mexico in 2005. We were going through a lot of corporate decisions, also evaluating whether we wanted to move the operation to China. The board directors didn’t care for that idea, so I investigated moving production to Mexico. We did decide to move forward, and things have been positive.
Steve Colantuoni: When you started up a manufacturing facility in Mexico what were some things that you found were facilitated, what things did you find that were troublesome, and that you had to overcome. Please give us examples of issues that you faced.
Ron Eisele: Steve, we really didn’t have any major problems when we moved part of our manufacturing to Mexico. I think the Offshore Group, and especially Gale Thompson, did a terrific job in explaining the process. We were given an accurate idea of what we could expect, and we went over things very, very thoroughly. After we had gone through the experience, I found it to have been a positive one.
Steve Colantuoni: Under the Mexico shelter service business model, the Offshore Group does non-core functions that are not things related to the actual manufacturing work done in Mexico. Do you find that when you examine those things that are done by the shelter company in Mexico–whether it be the payroll preparation, or the import-export transactions being done, or maintaining the building–how do you find that the model works in as relates to cost in Mexico? If you had to replicate those things done by the shelter company would it be less expensive, more expensive or about the same?
Ron Eisele: Oh, it would be much more expensive. I really feel because of the fact that we compete internationally, we sell our products in 50 countries around the world and we were competing directly with the Chinese, it was very important for us to move our manufacturing to a cost competitive area in Mexico. Actually working through the Offshore Group, utilizing the services in its Mexico shelter plan for manufacturers, really helped us do that. I know that we’ve lowered our costs by thirty five to forty percent by moving our manufacturing to Mexico. It’s been very, very positive for Minco.
Steve Colantuoni: In addition to that, what we believe, and hopefully this in the way things play out in reality, the division of labor between the Offshore Group and its Mexico manufacturing clients creates an environment where, hopefully, the manufacturer operating in Mexico is better at manufacturing because of the lack of a need to deal with the other things that are peripheral to their main mission. Does that play out in the real world, or is that just something that we like to believe?
Ron Eisele: Yeah, I think that’s a very valid point to be able to do that. We focus on what we are in business to do. I think the one thing we did find out, as end user of the shelter services in Mexico, was that, in addition to having the purchasing and accounting and other services available to us, we felt that we could enhance things even more by having some of our own people on staff to work in tandem with the shelter company in Mexico. Even with this added cost it’s still much less expensive to manufacture in Mexico under this business model than it would be otherwise.
Steve Colantuoni: Another thing that is significant is that your building is situated in a very big industrial park in Mexico. Do you find as a result of being in, let’s call it an industrial park, manufacturing campus-type environment, there things that are facilitated by having many other Mexico manufacturing facilities located in proximity to you?
Ron Eisele: Certainly there is no negative that I’ve seen. I think it’s pretty good. I think, again, that it’s helped by enabling us to consolidate freight to and from Mexico, and things like that, with other companies in the area. It’s been a benefit for us.
Steve Colantuoni: So that helps you to save resources?
Ron Eisele: Right.
Steve Colantuoni: So how’s business, pretty good these days?
Ron Eisele: I’d like it to be a little bit better, but it’s stronger. We’ve always kind of played in the copier and printer industry, but now, because of the confidence we have in the workforce here and management team, my partner and I are very aggressively trying to implement a growth strategy into other areas and industries that we haven’t previously entered. We’re looking forward to growing our manufacturing in Mexico operations here.
Steve Colantuoni: So overall, given the fact that there have been challenges over the past few years, you’re still feeling a high level of confidence about the future?
Ron Eisele: Oh yeah, we’re here to stay.
Steve Colantuoni: Well I appreciate you answering a few questions.
Ron Eisele: Sure.
Steve Colantuoni: Good luck to you.
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