Luis Herman Elizalde
Director of Operations
Ficosa
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View from the Top

R&D Center provides Numerous Advances for OEMS

Mon, 09/01/2014 - 13:46

Q: What role does Mexico and Ficosa’s technology center in Monterrey play in the company’s global operations?

A: Ficosa is headquartered in Barcelona and has a presence in 19 countries on four continents. Our North American presence is entirely dedicated to the automotive industry, and we offer solutions to OEMs ranging from mirrors, command and control devices, light cables, washer systems, to electronics. This makes an important contribution to Ficosa’s global automotive division’s global sales of US$1 billion. In North America, we have four manufacturing facilities and two engineering centers. One of these centers is in Detroit and the other one was opened in Monterrey in 2005. Our engineering center is an R&D base where we essentially create new designs from scratch and pitch them to our clients. Of course, those clients need our designs to meet particular concepts, but our long-term experience enables us to propose the best engineering solutions to them. The knowledge is shared between both our centers in Mexico and the US, and our engineers have the capability to follow up with data using the CAT system. We have very good engineers in Mexico, but the majority of our development takes place in Detroit because this is where our main clients are located. We have developed a number of patents related to lighting engineering, signs, blinkers, and mirrors, while we have also developed integrated vision system cameras. One of the interesting products that we produced in Monterrey was a heater to help quickly defrost a windshield in colder climates using a special fluid. We invest 4% of our total sales in R&D, which is a constant investment that is very necessary given the strong competition we face.

Q: Where are you looking to increase your business in Mexico?

A: We are trying to increase our market share in North America as a whole. We are growing a lot in Mexico due to the new OEMs entering the country. We have a varied customer base, including the major US OEMs. We provide parts for Volkswagen, both for its operations in Mexico and to its plant in Chattanooga, as well as for Mercedes’s M500. We are suppliers to BMW in the US so we are seeking to get more work from them in Mexico, and we supply to Honda for its CR-V vehicle and Nissan for its new facility. We already have the capacity to expand and grow beyond our current base so any such growth will not be a question of physical expansion, such as building new facilities or plants. Instead, our growth will be dependent on identifying where Mexico offers the greatest potential for us.

Q: How does your relationship with OEM clients impact product development and design?

A: We are not a typical supplier as we are able to develop a client’s vision beyond the initial request, which is a far broader service than that provided by most suppliers. For example, we introduced the new heater for the suburban GMT and for the Mercedes ML500. In the past, OEMs owned all of the design and technology, but now the supplier base is involved in R&D too. Around ten years ago, OEMs tried to pull back from technological development. There must now be equilibrium in the automotive supply chain and the development will never be entirely up to one side or the other.

Q: How do you manage your procurement strategy in Mexico and what room is there for local Mexican suppliers to work with you?

A: Ficosa’s Product Purchasing System is one of our standards, which helps us to apply specific methodology and rules when sourcing suppliers. As a global company, we look for the best suppliers around the world to feed the entire company. In Mexico, we choose a panel of suppliers to visit in order to assess their suitability. The information obtained from that assessment is submitted to our corporate head office in Barcelona. It is only once our head office approves a supplier that we can move on to develop them here in Mexico. We do have the ability to choose our own suppliers locally, but they have to go through the Ficosa Global Purchasing System. Most of our suppliers for the North American market are based here. Our polymers still come from the US for the most part, but some are sourced from Mexico. Most of our Mexican suppliers are in the northern part of the country, although we are now building up our supply chain in the central region. Logistically, there is always a challenge when a company’s operations are global, but we have a lot of experience and we share our knowledge between our locations worldwide. Ficosa’s standards are present throughout all of our processes.