The best way to fulfill your contracts with your Tier 1 and OEM clients in Mexico

The coronavirus pandemic has made it difficult to conduct business as usual, borders spent a lot of time closed, there was a shortage of chips, many goods couldn’t make it to their destiny, it was a disaster.

A year and a half into the pandemic, we are still struggling to get back to normal. Customers expect vendors to deliver on time and one must be creative to do it.

Which is why, if you are a Tier 2 company looking to fulfill your contract agreements with a Tier 1 client through this pandemic, we have some advice you might want to follow to deliver your merchandise on time at a minimum cost.

Establishing a company in Mexico to deliver small inventories is costly, and there are a lot of red tapes involved, as well as endless paperwork that could take months and make you breach your contracts.

Fortunately, in Mexico there are bonded warehouse services that allow you to keep inventory in Mexico near your clients, paying only for the rack positions and floor space. They even take care of some light manufacturing and conduct quality control inspections as needed.

In Mexico, there are companies that are able to meet the automotive industry requirements. After all, our country is a big manufacturer, producing over 3.7 million cars a year.

A company enrolled in the IMMEX program is very useful. This license allows foreign companies that don't have the volume of inventory that would justify opening a facility, to import their goods without paying taxes and/or duties.

This means you can always have inventory nearby to fulfill your contracts at the lowest cost.

Another aspect that can be covered is the vendor-managed inventory, which allows the customer to monitor its inventories and replenish them according to the Tier 1 demand.