Source One executives will travel to Mexico next week as part of an ongoing effort to lay the groundwork for increased trade and sourcing opportunities between U.S. companies and Mexican suppliers.

Source One Chief Executive Officer Steven Belli and Director of Operations William Dorn have been invited to speak the 2nd National Congress Manzanillo (CONAMA) 2011, a key international business conference taking place March 10-12 in Manzanillo, Mexico.

Source One is the first and only U.S. firm to be invited to participate in the symposium. And according to Source One’s Belli, the timing of the conference couldn’t be better.

“Over the past few months, a rash of disturbing headlines have led many U.S. companies to reconsider their reliance on Chinese and other Asian suppliers for materials and products,” Belli explains:

• The struggle to combat the widespread piracy of products ranging from software to movie DVDs to clothing brands remains an ongoing effort.

• Quality control problems, evidenced by reports of tainted and dangerously mislabeled pharmaceuticals, contaminated pet foods and glassware that was found to be contaminated by lead-based paint have led to widespread concerns about the safety of product supply chains.

• Ports used by many Asian suppliers are busy and overburdened, frequently causing lengthy delays in shipping and affecting supply chains and logistics schedules.

• Many U.S. companies have found it extremely challenging to establish reliable, long-term strategic relationships with overseas suppliers, an issue that is considered of major importance.

As a result, U.S. companies have been on the lookout for alternative providers who they can work with and trust, Belli says. Increasingly, Mexico is being viewed as a viable source for low-cost manufacturing and for reduced shipping costs.

One case in point is Walter Meier, a manufacturer of precision tools and equipment.

Early last year, executives at Walter Meier began experiencing problems with an overseas supplier the firm had been using to manufacture a complex product line. Production schedules were lapsing and shipping delays had increased tremendously.

Working with detailed sets of plans and specifications from Walter Meier’s designers, Source One was able to identify several potential new sources, including a Mexican-based tool manufacturer that had the creativity and technical ability to closely replicate the products made overseas.

As a result, Walter Meier was able to develop a reliable new source for a high precision product that could be manufactured in nearby Mexico at a highly competitive cost of labor, and with much less expensive and more reliable shipping and logistics schedules.

The example is indicative of the vast potential that exists for Mexican sourcing opportunities, notes Source One’s Dorn. Even so, Mexican suppliers looking to increase their share of outsourcing business from U.S. companies face a number of challenges.

“We have spoken with a number of other U.S. companies in various industries that would consider shifting their sourcing tasks to Mexico – but they have found it difficult to identify potential suppliers,” Dorn says. “In a number of instances, potential Mexican suppliers could not provide a quote for services required and/or could not provide a finished assembly.”

In addition, there is often a continuing language gap -- even though a high percentage of Mexican business professionals are able to communicate in English, many company websites are still mostly in Spanish, which makes marketing to English-only speaking prospects a challenge Dorn says.

At the upcoming CONAMA conference, Source One executives will share their experiences working with professional colleagues in Mexico and Latin America to identify potential suppliers and to assess capabilities for increased business expansion, as well as their efforts in working directly with potential suppliers to assist them in their efforts to reach out effectively to the U.S. marketplace.

Source One Management Services, LLC, based in Willow Grove, PA, is one of the leading strategic sourcing and procurement providers in the U.S. Its team of experienced sourcing professionals works closely with clients’ in-house staff to reduce spend, optimize existing budgets and increase the efficiency of operations by using proven sourcing and purchasing strategies, best practices, innovative technology, and an unsurpassed database of market intelligence dating back to 1992 to help clients achieve the maximum level of savings possible.
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Thomas Derr

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