Supply Chain Gaps Force Relience On USFri, 12/01/2017 - 14:25
Chihuahua’s strategic location facilitates business with the US and northern Mexico but the lack of aerospace suppliers can be a challenge, says Jorge Ávila, Operations Manager of Chandler Industries, which has had to turn its eye to other cities while relying on the US for specific processes.
“For instance, while we recently incorporated two more suppliers with sufficient storage capabilities in Mexico, they cannot supply our aerospace division because raw materials for the industry have higher requirements. We have started to look outside the city and we recently found a few suppliers in Tijuana but we still rely on the US for special processes,” says Ávila.
Although Chihuahua’s location close to the US border makes it easy for IMMEX-certified Chandler Industries to import raw materials from the US, the company requires a variety of processes that are not readily available in Mexico. These include anodizing, heat treatment and coating processes. While there are some companies in the state with these capabilities, they do not have the necessary certifications for the aerospace industry. Industry group FEMIA is among the entities looking at possible solutions. “FEMIA aims to understand the needs of every single facility,” says Ávila.
The association brings together all aerospace companies in Mexico to connect those looking for specific services or investment opportunities. “Companies are spending a lot of time looking for suppliers and they can be right next to you,” says Avila. He adds that governmental support for smaller companies would help address gaps in the supply chain by facilitating the acquisition of necessary certifications.
Chandler Industries, created in Montevideo, Minnesota in 1962 and acquired in 2011 by Arch Equity Partners, performs highly specific machining, manufacturing and assemblies for the aerospace, defense, industrial and medical sectors. The company has been in Chihuahua since December 2013. “It was difficult to begin working in the state with new customers and certifications. We started operations with
a single client and brought in more business over a long period of time. Now, we have several projects running at the same time and have a very aggressive plan for the future,” says Ávila. Chandler Industries launched new products in 2017, including two new families of Coupler Clamp shells, and is generating a third family of products with Eaton Aerospace, the company’s main client. The machining company also collaborates with Emerson, Parker Aerospace, Zodiac Aerospace and GE.
In the medium-term, Chandler Industries’ goal is to incorporate a few five-axis machining mill centers to support the horizontal machining equipment assimilated as part of a 2017 project. Chandler Industries has five facilities, four of which are located in Minnesota and the last in Chihuahua. The Chihuahua facility represents 5 percent of Chandler Industries’ business but aims to grow to 15 percent in the short-term. “The company has grown quickly,” Ávila says. “The only challenge is the time- consuming validation of projects, which causes delays. At Chandler Industries, we want to be faster.”
Amid the chatter regarding the renegotiation of NAFTA, Chandler Industries remains optimistic. In fact, the company has dramatically increased its operations since the renegotiation was announced, Ávila says. “We only expect a revision of the existing agreement and nothing else. There is significant investment of US companies in Mexico and that will not change. To be honest, I do not believe that a renegotiation of NAFTA can affect operations in Mexico at this point,” says Ávila. "There are areas in which NAFTA can be rewritten to benefit the maquiladora industry."
Beyond suppliers, Chandler Industries sees no obstacles in its path. “In 2017, the company will grow 35 percent in revenue and equipment in comparison with the previous year. There is a huge opportunity in the aerospace sector as many companies need machining and several businesses in Mexico are looking for suppliers, so we have many chances to increase our number of customers and to grow our business with the ones we already have,” Ávila says.