The Medical Device Industry Has a Clean Bill of Health
April 11, 2013
Medical device companies manufacturing in Mexico continue to exhibit steady growth with no sign of a slow down in sight. As costs in the United States and Eastern Europe continue to rise, especially with the implementation of “Obamacare” and its direct impact on medical device companies, more organizations are considering manufacturing in Mexico as a viable solution.
No other place in Mexico is this more evident than in Tijuana, where they now claim the largest concentration of medical device companies in all of North America. The ability to provide both timely deliveries and consistently high quality products are a few reasons why medical device manufacturers are choosing Mexico. Also, there is a tremendous base of talented labor with experience in medical device, automotive, electronics, aerospace and other sophisticated industries to support the growth of manufacturing in Mexico. Furthermore, the labor laws in Mexico provide companies much more flexibility in terms of compensation, scheduling and seasonality, which plays an important roll on profitability.
Another factor drawing medical device manufacturers to Mexico is the government’s enforcement, and employee’s respect, for intellectual property. Unlike many other low-cost manufacturing countries, Mexico is known for its low piracy rates, which cost companies billions of dollars a year.
One of the challenges facing these companies is understanding the business landscape and culture in Mexico, which is why many of these firms are choosing to outsource their administration and compliance management to shelter companies. A good shelter company will handle 100% of the administration, including Human Resources in Mexico, Payroll in Mexico, Accounting in Mexico, Import/Export in Mexico and Environmental, Health & Safety in Mexico, allowing the manufacturer to focus on production and quality control. “We are receiving a record number of inquires from medical device manufacturers around the world who want to explore Mexico as a competitive solution,” said Scott Stanley, Sr. Vice President of North American Production Sharing, Inc. (NAPS), Tijuana’s largest and most sophisticated shelter service provider. “NAPS guides these companies through the process of feasibility by providing all the facts and figures about expanding into Mexico so sound business decisions can be made. Thereafter, we essentially become partners and typically work together for many years.”
With an increase in demand for medical device products, not only in the United States but also within Mexico’s public health sector, medical device manufacturing in Mexico will continue to grow.