Four Tricks to be Competitive in Mexico Logistics
Below are tips to reduce costs, improve quality, and increase productivity in the area of Mexico logistics.
Mexico logistics brings together all of the elements that are necessary for the proper operation of a manufacturing facility in the maquiladora industry. For a company to be competitive in the area of logistics it must employ best practices in all relevant areas. These include things such as transportation, shipping, and inventories. Sometimes it is necessary for a company to adopt significant structural changes to improve its Mexico logistics, while, on the other hand, in many instances, only small modifications are required.
Below are some of the areas that companies should consider when working to improve the performance of their Mexico logistics activities:
There are a number of tools that facilitate visibility in the supply chain. These tools can provide information on processes and can identify areas in which improvements in Mexico logistics can be made. They also are important in that they can facilitate the exchange of important data among all the members of the supply chain.
Some of these basic systems that can be used in Mexico logistics are:
- ERP or Enterprise Resource Planning Systems – ERP systems are process management software that allows an organization to manage a business and to automate many back-office functions that are related to technology, services, and human resources;
- RFID or radio frequency identification systems – RFID is similar to barcoding in that data from a tag or label are captured by a device that stores the information in a database;
- S&OP & CPFR Systems – sales and operations planning software enables businesses to achieve focus, alignment, and synchronization among all functions of an organization, while collaborative planning, forecasting, and replenishment systems allow for the cooperative management of inventory through joint visibility and replenishment of products throughout the supply chain;
- TMS – Transportation Management Systems are an important part of Mexico logistics. A TMS will define the most efficient transportation scenarios within given parameters, as well as do things such as real-time transportation tracking.
The main objective of this practice in Mexico logistics is to ensure the disposition of materials and products to meet demand.
Some of the recommendations for Mexico logistics in this area include:
- The use of coding practices to identify materials and products. This facilitates standardization and is essential to the supply chain process;
- The use of classification practices (for example, ABC to classify materials according to importance);
- The management of stocks in a synchronized way to optimize inventories;
- The maintenance of inventories at good levels in order to reduce storage costs;
- The invitation of suppliers to manage inventories (VMI). The objective of this is to improve the service of a manufacturer towards the final customer;
- The acquisition of software of advanced planning systems (APS) to solve problems related to Mexico logistics.
In some companies, management of the warehouse is among the most-costly activities. Learning how to manage it is key to competitiveness in the area of Mexico Logistics. Some ideas to improve warehouse management are listed below:
- Plan the supply network strategically. Find the most economical way to send and receive products, while making sure to maintain high quality and good customer service;
- Use shared warehouses, if possible. This allows smaller and medium-sized businesses to be flexible;
- Invest in an automated storage and retrieval system.
Because this area of Mexico logistics can represent high costs for manufacturers, managing company transport needs effectively and efficiently is essential for competitiveness. This includes implementing strategies and employing best practices. When considering Mexico logistics these are some of the main points that should be considered:
- Traceability and safety throughout the supply chain. Maintaining good traceability practices enables businesses to know the location of the product(s) and allows for stock control and the coordination of activities with distributors;
- Utilization of cross-docking- In addition to reducing costs, cross-docking can result in reduced delivery times and increased customer satisfaction;
- Utilization of multimodal transport- This form of transport can result in transporting materials and products with greater efficiency, and can facilitate the movement of goods internationally;
- Outsourcing of Mexico logistics services- The outsourcing of transportation services to a third-party logistics company may result in cost reduction.