Case Study_ March 2010
Baja California, Mexico provides greater BOTTOM-LINE profits! A Division of Overhead Doors
Business Problem: Reduce Labor Costs TODCO is a Marian, Ohio based division of Overhead Doors Corporation, and the largest producer of overhead swing doors worldwide. When TODCO’S President Daniel Rengert needed a manufacturing solution that would allow him to reduce labor costs while maintaining a close proximity to TODCO’S west coast customers, he realized a near-shore manufacturing operation was his best answer. For TODCO this was an expansion of their manufacturing operation that would afford them some very unique benefits. Unique Benefits: Better Margins, New Customers and Process Improvement TODCO immediately experienced a significant cost reduction in labor. The average fully burdened Line Assembler’s per hour wage in Baja California is $2.52 as compared to California at $13.30, that was an 81% savings just on labor rates! This allowed TODCO to be more price-competitive while increasing their profit margins. The close geographic proximity of Baja California to Southern California made it an ideal location for Manufacturing. “Expanding to Mexico positioned TODCO closer to our customer base in Mexico and Southern California” states Jim Frazzini, TODCO’S V.P. of Operations. If fact, being in the Baja California region has helped TODCO develop new customers given many of the major automotive manufactures have operations here. “TODCO’S new facility presented an opportunity for a plant re-design which resulted in tremendous improvement of our process flow” states Frazzini. This improved process flow helped with TODCO’s “Lean Manufacturing” initiatives and overall manufacturing cost reduction. Entering Mexico: IMMEX (Shelter) Program Having identified Baja California as the ideal location for TODCO, the next question was how to establish their Manufacturing operation. Under Mexico’s IMMEX (Shelter) Program, TODCO was able to quickly establish their Manufacturing operation and begin production. This program allows companies to enter Mexico without any liability and minimal risk to the organization. TODCO chose San Diego based Co-Production International as their IMMEX Administrative Services (Shelter) Provider. “We chose Co-Production because they paid attention to detail and understood our needs… We have had nothing but good experiences with them. They have continued to provide experienced support and qualified production employees.” according to Frazzini. Expanding to Baja California, Mexico has been a great strategic move for TODCO, helping them reduce costs and increase their customer base. Mr. Frazzini says, “We continue to look for ways to increase our business in Mexico and with CoProduction. It has been a great experience and I’d do it again without any hesitation!” About Co-Production International (CPI) Co-Production International is strategically headquartered in San Diego, CA, and is the premiere Administrative Services Provider of the IMMEX (Shelter) Program in Baja California, Mexico. As your Administrative Services Provider our role is to facilitate the successful expansion of your manufacturing operation into Baja California. We handle the complete set-up of your operation and manage the day-to-day administrative duties in accordance with Mexican regulations allowing you to control and focus 100% on manufacturing. Together We Succeed by assisting you in ensuring your competitive advantage through one of the most cost effective labor markets in the world… Baja California, Mexico!
Contact Co-Production at +1(619) 429-4344 or Visit Us at www.co-production.net