US Manufacturer Expands its North American FootprintTue, 09/15/2015 - 13:33
Q: What have been the the company’s development and marketing strategy highlights since its arrival in Mexico?
A: The development of the plant has been very dynamic and high-paced. We signed a leasing contract in February 2014 and by April we were already shipping products. We were scheduled to start production in May 2014, but our customers asked us to begin operations six weeks beforehand. There were four major competitors in the area when we first established our plant. We are currently taking over the market with our quality, price and technological advantages. Our main clients are close to Monterrey and Saltillo, and our geographical position has made it very easy for us to supply Polaris, Navistar, and Caterpillar, among other customers. We are currently manufacturing structural tubing and exhaust system components for Polaris, as well as acoustic mufflers and metal encapsulated exhaust systems. Our most important clients are heavy vehicle OEMs, so our market strategy has focused on starting off with them and then moving on to heavy duty light vehicles.
We are bringing brand new equipment into the Monterrey plant, including state-of-the-art machinery for tube laser cutting, and flange plating. We presently have a joint venture with Crippa, an Italian company, so most of our bending equipment will be acquired from them. This plant currently has five bending machines, robotic welding, a sheet laser, and stamping and pressing capabilities. Our future plans are to incorporate a system line for powder paint and increase our muffler manufacturing capabilities, as well our stamping capacity.
Q: How are you catching up with your competitors in areas such as human capital, local suppliers, and local market knowledge?
A: Some people on our team have up to 20 years of experience. Our management team has a deep knowledge of the industry and is highly qualified to provide Nelson the base for its expected growth. We have already been working with Cummins, Navistar, and GM in Ramos Arizpe and Silao. We have a deep understanding of our products and we are in constant contact with customers to fulfill their needs. The growth that we have had this year, coupled with the plans we have for 2016, are highly motivating, and our clients are reacting positively. We have been controlling our growth process by expanding in phases, starting in Monterrey with simple components and eventually moving up the ladder to more complex exhaust tubes with larger diameters that require welding and leak testing. With these systematic steps, we are also ensuring the skill development of our local workforce. Our base labor force has been sent to our sister plants in the US for basic training, giving them an understanding of our products and the ability to share their knowledge with the rest of the plant through mentoring programs.
Q: What defines the balance between human labor and automation in the plant?
A: Automation is cost-effective, but our ultimate driver is quality, which is why we have chosen to use technicians for the majority of our processes. The only robots that we have are here to perform very specific tasks. This includes the thorax of the Polaris engines, as it is a crucial component that must be strong and resistant, and the welding must penetrate the pieces perfectly to support all the strain. Additionally, Six Sigma has been a great tool for us since we acquired the exhaust division of Cummins six years ago. Since Cummins’ knowledge and expertise on Six Sigma was absorbed into Nelson, it has allowed us to solve problems in tube bending that were previously unknown. Six Sigma is very important to us, and the support provided from head office to train our workforce how to use it has been very valuable.
Q: To what extent is the group counting on Mexico’s plant to anchor its future growth?
A: This plant will be the flagship for Nelson on a worldwide scale. Our global executives foresee that this plant will be a world leader in safety, quality standards, and delivery. We will use the best available technology in the world, not to mention the most talented workforce in Mexico. In addition, this plant is implementing our new manufacturing methodology that will open the market. Our customers’ demands are leading us to expand our core business beyond exhaust systems and mufflers. We always knew that the Mexican plant would have an aggressive growth. Now that the company has a profitable facility in Mexico, the group is investing considerably. Based on the knowledge and experience of our plants in the US, all the processes that are launched here in Mexico include improvements in the way they manufacture products. For mufflers, we are using molding and welding fixtures, as well as base tables where we check all the dimensions of the mufflers and tubes to make sure they fit customer’s specifications. The end-users can also enjoy mufflers with a longer lifespan than the market average, as well as significant noise reduction.