Selecting an Outsourcing Management Company for Your Manufacturing Business

March 4, 2022

As a manufacturer, you’re always looking for ways to scale your production and boost productivity while minimizing costs, and for many companies, the best way to do that is to bring in some extra support.

By engaging an outsourcing management company, not only do you cut back on staffing costs, but you also get a partner that will handle the oversight of everyday tasks, so you can get back to focusing on your production.

What is an Outsourcing Management Company?

Under the umbrella of business process outsourcing, an outsourcing management company is a third-party company that takes over management processes for another company, either temporarily or long term.

Growing businesses often choose to outsource these services because they don’t have the internal resources to create management teams for critical business functions, or they may require additional support for specific projects. In any case, engaging an outsourcing management company has many benefits when you find the right partner for your business:

  • Lowered costs
  • Access to expert knowledge
  • Focus on company strategy
  • Staffing flexibility

What Can an Outsourcing Management Company Do for Your Manufacturing?

Despite the benefits, companies may hesitate to engage with an outsourcing management company because they do not want to give up control of their operations. Understandably, they might assume that having in-house employees monitor and direct daily business operations means everything will run smoothly and support the business’s goals.

A manager that has worked for a company for years certainly has levels of company insight that an outsourced provider does not, but this doesn’t mean that engaging an outsourced management company is a bad strategy. While there are many benefits, here are some of the most important for an outsourcing management company in Mexico:

IMPROVE EFFICIENCIES

Having an outsourced management team is a valuable way to minimize drain on internal resources while also receiving added management expertise. This can be especially valuable for manufacturers new to Mexico’s manufacturing industry. They’re able to focus their efforts on quality control and company strategy while the outsourced team takes over other fundamental business processes, from payroll to customer service.

GET LOCAL EXPERTISE

Internal managers may have in-depth knowledge of the company, but that knowledge can be difficult to leverage when operating in a foreign country. Engaging an outsourcing management company can bring manufacturers the best of both worlds. They get the combined power of their company knowledge and the cultural, linguistic, and professional insight of the outsourced company. In Mexico, this is especially beneficial when it comes to navigating and complying with the country’s complex labor and tax laws.

MAINTAIN CONTROL

Mexico has many different ways through which U.S. manufacturers can set up their businesses, and some models do require companies to give up significant amounts of control. When a company chooses the contract manufacturing model, for example, they are opting to outsource their production and hand the control over to a third-party manufacturer.

But that’s not the only option; there are other models that allow U.S. manufacturers to maintain control over their production, quality control, company culture, and more. Most companies choose to operate under a shelter company, as it’s the most efficient and cost-effective route for most manufacturers.

Under a shelter company in Mexico, manufacturers receive comprehensive administrative and compliance management support without anyone interfering with their manufacturing processes.

Engaging an Outsourcing Management Company: What to Consider

Outsourcing your management can be an effective way to quickly establish or grow your manufacturing operations in Mexico. However, there are some key questions you’ll want to ask to ensure a successful relationship.

WHAT SERVICES DO THEY OFFER?

Within the shelter manufacturing model, most outsourcing companies focus on administrative support and let you handle production, but they may offer varying levels of service. Can they assist you with vendor management? Or do they only specialize in human resources? Unlike NAPS, not all companies offer a full range of administrative and compliance management services, so make sure you’re not missing out on services that support your business needs.

HOW DO THEY RANK IN TERMS OF EMPLOYEE SATISFACTION?

One of the benefits of manufacturing in Mexico is the country’s affordable labor, so many manufacturers may engage a company to facilitate the hiring process. However, to take full advantage of Mexico’s skilled workforce, you need your outsourced management team to assist with employee retention, not just recruitment.

As a part of our Administration and Compliance Management Program, we don’t just focus on recruiting the best talent to support your manufacturing business. We offer a full suite of HR services, including talent management, training, and even security and hygiene, to ensure your employees are satisfied and have a positive experience.

WHAT IS THEIR LEVEL OF EXPERIENCE?

As a new or growing business, you likely want industry expertise when outsourcing management services. After all, outsourcing companies in Mexico may have the management know-how, but that doesn’t mean they have the manufacturing knowledge to ensure your success.

NAPS, on the other hand, has decades of experience in Mexico’s manufacturing industry. We’re able to provide the services that are critical to the success of any business, so you can maximize the value of the incentives Mexico offers manufacturers.

Ready to start outsourcing with NAPS?

We’re ready to help you find success in Mexico with management services that keep your operations running smoothly and in complete compliance with all of Mexico’s laws. Contact NAPS today to learn more about how we can help you execute your vision in Mexico.