The RESCO Electronics Blog

I am excited to share with you that last October RESCO moved into its new home in Ciudad Acuna, Mexico.   You may be thinking why wait six months before writing a blog about this new facility?  Well, the short answer is that we didn’t want to make a big to-do about our new place until the move was complete and most all the transition pains were behind us.  In other words, we didn’t want to be too quick to brag.  Now that the move is behind us and things are running smoothly, brag we will!  So here are some particulars about our new home, our staff and Acuna, Mexico.

One of the hardest things to do is to listen.  Most of us are wired to talk and do it quite well.  We are quick to offer our ideas, our solutions, our way to do this or that.  Although God blessed us with two ears and we hear just fine, most of us really struggle to listen.  And by “listen” I mean to take the time to hear and really understand the ideas and concerns of others. 

There are many benefits to working with a contract manufacturer (CM).  As a result, many companies are finding plenty of reasons to outsource their production to another entity…and with good reason.  Although outsourcing production may have risks, these risks can be minimized by carefully selecting a CM that complements your company’s core competencies.   When deciding on a CM, you should weigh the benefits and associated risks. 

Most of you reading this will have purchased a home at some point in your life. In many respects picking a contract manufacturer for your company to partner with is a similar experience. You are making a major decision that can have a major effect for years to come and you have multiple stakeholders who all have different ideas about what is the best fit.  At the end of the day, you need to differentiate your “must haves” from your “would likes”.  And just as importantly, project what your must haves are going to be in the coming years.

The Downfall

Vendor consolidation, also known as vendor rationalization, is one of the methods companies use to improve operational efficiency. Electing to choose from a limited pool of trusted vendors
 has enabled companies to build stronger and more collaborative relationships that deliver a range of benefits to the organization, including: lower costs in relationship management, lower administration costs, less risk to the business, increased quality and speed in delivery and improved supplier responsiveness. 

Selecting a supplier that’s right for your business is complicated. Though price matters, there’s more to it than just picking through quotes and price lists and sorting from lowest to highest. Skilled buyers know the importance of weighing all factors involved, including supplier quality and reliability. But, what specifically is measured, and how?

Now that we are in the middle of a Presidential campaign the rhetoric is flying on a whole host of issues.  This election cycle the issues of trade, trade agreements, and American jobs have become some of the most hotly debated.   My intent in this blog is not to make a political statement but rather to offer a perspective regarding trade with Mexico that has been all but drowned out by the political fervor.   I want to share with you why I believe that our trade relationship with Mexico has actually helped preserve and perhaps even grow jobs in the US.  Although I will cite a few statistics and comments from experts below, my belief fundamentally comes from what we at RESCO see taking place at many of the US manufacturers that we support.

Of all the different inventory management systems in which we have had the opportunity to participate, kanban may be the most consistently effective; especially from the manufacturer’s point of view.  At RESCO we have supported vendor managed inventory, consigned inventory, bonded inventory, and a variety of dock-to-stock programs.  But consistently the kanban based systems have been the easiest to manage and the most consistently effective.

In today’s competitive market, every company is looking for a cost advantage.  Sometimes that edge comes from working with your contract manufacturing partners to develop a lower cost design, other times it comes from finding off shore sources for sub-assemblies, or perhaps it comes from implementing cost saving inventory replenishment programs.   But what happens when these strategies are exhausted or just don’t generate the savings you need?  One often overlooked option is to work with contract manufacturing partners that can build higher level assemblies.  A few contract manufacturers like RESCO Electronics can take advantage of their lower cost structures, lower cost manufacturing facilities, and electro-mechanical expertise to lower your total costs by doing just that.