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New Twists on Manufacturing in Mexico
Inspection is a crucial part of the production process.

Manufacturing Management Solutions (MMS) provides shelter solutions to companies wishing to manage their own manufacturing in Mexico. MMS has been helping companies manufacture products in Mexico since 2002. The company is led by husband and wife team, Pirouz and Letty Pourhashemi. Letty is CEO and Pirouz is the president.

Headquarters is in downtown Tecate, in the Mexican state of Baja California. This location provides the convenience of proximity to the U.S. border, in a city that is lower in cost and less transient than many of its larger border city counterparts.

In Mexico, shelter providers offer a bridge to manufacturers who wish to establish operations in Mexico, but are concerned about the learning curve and complexity of running a multinational operation. There are a number of different business models in shelter services, ranging from simple start-up assistance to a full shelter where the customer is leasing the factory and employees directly from the shelter provider and simply providing equipment and managing the production operation.

Setting Up in Mexico
MMS provides its customers with a complete solution for establishing and operating manufacturing in Mexico. Services can include facility setup, business setup, ongoing administrative, accounting, import/export services, human resources services and environmental compliance support. MMS is also willing to help its customers establish independent operations at the end of the agreed-upon shelter contract.
Wave soldering system.

Customers have the option of leasing an entire building or they can operate in a shared shelter arrangement which can leverage common services such as transportation, facilities maintenance, infirmary, day care or cafeteria — shared by noncompeting companies.

Key benefits of using a shelter provider include:

  • Fast Facility Startup. Just as companies who utilize contract manufacturing leverage their suppliers' shared resources of production, companies using shelter services leverage their shelter provider's administrative resources and business expertise.
  • Tax Minimization Options. Business structure in Mexico has tax implications. MMS' business model includes educating companies on the various business structure options for doing business in Mexico and the cost vs. portability pros and cons of each option.
  • Immediate Purchasing Clout. An experienced shelter provider has strong business relationships with local suppliers and understanding of best pricing. A key part of MMS' value proposition is working to get the best pricing possible on the third-party materials and services that its team purchases on behalf of its customers.
  • Experienced Administrative Management. Mexico's laws, accounting practices and labor practices can be confusing. Another benefit of the shelter option is access to management systems that support compliance with a complex network of laws and policies.
  • Good Labor Relations. In Mexico, turnover is often a factor of company culture/treatment. A shelter provider's reputation in the community facilitates employee recruitment and helps minimize turnover.
  • Helping a Company Focus on Core Competencies. Manufacturing expertise does not necessary translate to cross-border manufacturing facility start-up expertise. A good shelter provider is expert at starting and growing manufacturing operations in Mexico, which eliminates learning curve issues. Management can continue to focus on building product, while the shelter provider ensures that the required resources are in place.

While the shelter model isn't new MMS' ability to team with its customers to develop a synergistic solution is somewhat unique. One of MMS' customers, Milwaukee Electronics Companies (MEC), illustrates this well.

Founded in 1954, MEC designs and manufactures custom circuit board assemblies for the medical, transportation, military, HVAC and a variety of other industries. MEC operates over 135,000 square feet of manufacturing in Milwaukee, Wisconsin; Canby, Oregon; and Tecate, Mexico. In addition to EMS services, it offers product development services through its MEC Innovation business unit and quick-turn prototyping through its Screaming Circuits Business unit.

MEC had been subcontracting work to a company in Mexico. In 2002, management decided that it was time to establish its own company in Mexico.

"We selected MMS because Pirouz and Letty Pourhashemi are trustable, honorable individuals. MMS knows how to do business in Mexico and has substantial manufacturing expertise. However, the trust factor was the most important element for us," said Michael Stoehr, MEC's president.
Optical inspection of assembled PC boards.

In this shelter arrangement, MMS handles human resources recruiting and labor relations activities; government reporting and permit applications; Mexico accounting; environmental compliance support; arrangements for employee services such as transportation, health care, catered food and a self-service lunchroom; import/export paperwork; and negotiations with Mexican suppliers. Employees are all employed through MEC's Mexican subsidiary, while MEC leases the building from MMS. MMS is also supplying warehousing support on the U.S. side of the border. In addition, MEC supplies electronics contract manufacturing services to other MMS customers.

However, the most unusual feature of the arrangement is joint planning for the future. MEC is beginning to outgrow its current location and would like to move to a larger building. MMS has been working with MEC and another customer to migrate to a campus with separate buildings but shared common services such as health care, transportation and day care. MMS and MEC are in active discussion with developers to start the first phase of the campus by November 2011.

As these examples indicate, MMS offers a model that is helping both itself and its customers grow.

"Our formula is simple: provide high quality service and solutions customized to each client's needs at a competitive price," said Pirouz.

Contact: Manufacturing Management Solutions, Inc., 2514 Jamacha Rd., Suite 502-74, El Cajon, CA 92019 619-270-5507 E-mail: or  

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