Over several decades Baja California has emerged as Mexico’s medical technology hub. There are many reasons that make Tijuana is an optimal location for medical device contract manufacturing.
Tijuana strength in the medical device manufacturing sector is growing.
This post examines the key considerations that ought to be taken into account when a transnational company opens manufacturing plant in Tijuana, Baja California. The information found in the following text draws on the experience of Matt Jordan, the vice president of operations of PROVIDIEN. This sizable manufacturing firm is a leading supplier of contract manufactured precision components and assembled devices for the medical device industry. PROVIDIEN has extensive production operations in one of the US-Mexico border’s most economically dynamic cities, Tijuana, Baja California.
One of the key considerations that evidences that Tijuana is an optimal location for medical device contract manufacturing to set up shop and succeed is the interplay between the industrial base of San Diego and Imperial Counties, and that of Baja California––which together make up the CaliBaja region. This binational region is an important point for production for the medical devices and manufactured products.
The bi-national Mega Region offers an extensive international trade friendly infrastructure that includes six border crossings, links to five interstate higways, access to five international airports, as well as two maritime ports that are linked by rail. The Southern California and Northern Baja Region has a joint $215 billion of GDP, and a combined population of over six million people.
Tijuana is an optimal location for medical device contract manufacturing , because medical device products can be delivered to an OEM anywhere on the East Coast of the United States within a period of no more than five days. This gives Tijuana companies an advantage over medical production facilities located in other low-cost regions, most notably Costa Rica, where the same medical device products can be delivered to an OEM on the East Coast of the United States, within a much longer timeframe of fifteen to eighteen days.
A major consideration that makes a strong case for nearshoring production to Tijuana is it low “landed costs.” Landed costs encompass cost of goods sold, import-export fees, as well as the expense of freight and logistics services required to deliver goods to their end users.
Additionally, Tijuana is an optimal location for medical device contract manufacturing suppliers due to reduced and stable labor costs, and availability. Local workforce stability and labor rates can be attributed to an overall positive labor environment, which is derived from the fact that local employees have generations long experience performing manufacturing activities.
Tijuana, has emerged as Mexico’s medical technology hub. For a better understanding of its size and relative importance, medical device manufacturing activity in Tijuana is “significantly larger than in Minneapolis, and is larger than the medical device industry in Boston and Chicago combined”. This industry concentration enables companies to source locally, according to the same source, and is another reason that Tijuana, plays a central role in North American medical device manufacturing.
North American medical device manufacturing quality standards are met in Tijuana
Running a device manufacturing plant in Minneapolis, Boston or Chicago, and operating the same in Mexico under the IMMEX program is similar in terms of the process sophistication, working methodologies, and the in facility quality. The FDA audit in Mexico is the same as in the United States in its requirement. Among other things, FDA audits examine purchasing controls, medical device supplier audit processes, and scrutinize the quality of raw materials imports, given their effect on product quality and value chain integrity.
Another key element to be considered by potential investors when attempting to determine whether or not Tijuana is an optimal location for medical device contract manufacturing suppliers to locate is quality of life. From a US manufacturing professional’s point of view, running a Mexican manufacturing facility, opting to live in the San Diego area, and going to work in Tijuana can make for a good work-life balance. Tijuana industrial parks and maquiladoras can be reached from cross border destinations in about thirty minutes. Returning to the US is facilitated by the use of SENTRI border crossing cards, which speed up the journey home.