Francisco Santini
CEO
Ripipsa
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Ripipsa: How to Climb the Supply Chain Ladder

By Alejandro Enríquez | Wed, 02/17/2021 - 06:00

Q: What is Ripipsa’s role in the automotive value chain?

A: Ripipsa is a Mexican company founded in 1991. It has a history of success similar to many other companies in the country that started as an entrepreneurial project. Today, we have 12 facilities in the country, mainly on the northern border, including Hermosillo, Tijuana, Mexicali, Nogales, Juarez, Chihuahua, Monterrey, and Saltillo. We focus on supporting international global players. More than 50 percent of auto parts are produced in Mexico’s northern region, which is why we decided to focus on this area. Recently, we opened facilities in the Bajio area that manufactures around 30 percent of auto parts in the country.

Within the supply chain, we are considered a Tier 3 company. Companies like ours provide equipment and services to the sector. However, we aspire to work with direct suppliers in the automotive industry. In 2020, Ripipsa started manufacturing some components as a Tier 2 company. As a Tier 3, we learned about production systems, processes, quality, and other requirements, which allowed us to take the next step in the value chain. 

Q: What role does the automotive industry play within Ripipsa’s operations?

A: The automotive sector represents almost 60 percent of our customer base. We support over 1,400 customers with production system design. Also, we create partnerships with companies related to automotive services. As a Tier 2, we are beginning to manufacture some components for the sector. We are very proud of this achievement.

Q: What are the main elements a Tier 3 company must take into account to escalate its business?

A: First and foremost, quality certifications are a must. ISO, quality systems, and an organizational structure that promotes quality is essential. By certifying its processes and products, it is easier to appeal to the customer.

The second element is finance and structure. To take part in a project as a Tier 2 company, a solid financial capacity is necessary, as well as open financing lines that allow the company to perform tests and invest in specific equipment for the component. In terms of infrastructure, as a country, we are required to have state-of-the-art equipment. Tier 2 or Tier 3 suppliers in other parts of the world can have more rustic facilities but their expertise enables them to be suppliers. In Mexico, we need to have high-quality facilities because customers expect that from a Mexican company.

The automotive industry in Mexico also has a different work ethic than other sectors, as evidenced not only in the shifts we work but also in the adoption of best practices from around the world. This is why attracting talent is important. By bringing in experienced automotive professionals, it is easier to escalate from Tier 3 to Tier 2. That said, Mexican engineers are so talented that they are working in the automotive sector abroad. I call on them to come back home.

Q: What effects did the pandemic have on Ripipsa’s operations and what strategies did you implement to face this?

A: The private sector was the first to adapt to the new conditions, including remote working schemes and digital channels. Undoubtedly, we have become more productive during the pandemic when it comes to administrative processes. We have also learned how to work under the different restrictions indicated by the country’s traffic light system. This has a direct influence on our production capacity. In the beginning, when the automotive sector was not considered essential, we stopped our plants for one or two months. With the new restrictions, production is at around 60 percent.

Companies are being more cost-efficient, which can delay some projects for us. That said, we became more efficient and adapted quickly by reaching agreements with our partners and our employees. Adequate planning was essential and executing strategies on time was also necessary. It was really important to maintain close communication with our customers. This included re-evaluating the services we provide and creating customized and more efficient solutions, with a continuing focus on adding exceptional value to our customers.

Q: What is Ripipsa’s perspective on manufacturing companies embracing Industry 4.0?

A: A variety of projects remain on standby. Sector leaders are still deciding where to invest. That said, collaborative robots (cobots) have been in demand. Cobots take part in high precision processes without replacing the operator, thus increasing efficiency. Mobile robots are increasingly attracting interest as well. Their main work is to carry supplies and materials for operators. This is also part of Industry 4.0, as they move by predefined paths that help overall operations and processes. There is no time lost. The pandemic made us accelerate these kinds of processes and robots have the advantage that they do not get sick.

Q: What are Ripipsa’s recommendations when it comes to embracing Industry 4.0?

A: Industry 4.0 does not mean a fully automated production line or an immense number of robots. Technological implementations can be as precise as needed. It is important to first identify the actual need robots and technology will address. Second, an ROI assessment is essential. Cobots usually provide better ROIs as they are cheaper and they are easier to use. The specialized staff is not required to control them because they have a really simple interface.

 

Ripipsa is a Mexican company with over 12 facilities in Mexico. It has a subsidiary in the US and it is a Tier 3 supplier of technological solutions for Industry 4.0. It is also a Tier 2 supplier of certain components.

Photo by:   Ripipsa
Alejandro Enríquez Alejandro Enríquez Journalist and Industry Analyst