By Michael Hissam
Nearly 10 years ago the news broke that Electrolux would set up shop in Ciudad Juarez.
One media outlet described the then-proposed plant “a whopper.”
With such a huge plant and projections of a high volume of production, came serious consideration of sourcing, as well as teaming people power and machine power.
Oscar Palacios, purchasing director, Electrolux North America offered insight as to what drives success at one of Ciudad Juárez’ larger manufacturing sites.
He added greater things may be in the offing.
Location, location, location, how does that mantra show the advantages of Ciudad Juarez for manufacturing as well as speed to market for Electrolux.
They provide the best of all worlds. You can have a great labor rate that is also skilled, they are prepared now for different skilled position that they were not in the past. The logistics is always important, with the economy going up, the fuel cost going up, having them close and the great infrastructure that we have on the border makes Juarez and Mexico a great location for us.
Let’s us take a look at your Juarez operations, your floor space, your number of employees, your product range. What are you doing there?
We have four different facilities that are in a campus of over 4,000,000 square feet with more than 9,000 employees. We manufacture vacuum cleaners, refrigeration, washers and dryers.
You pointed to the transfer of knowledge as a benefit to the community. Please explain that.
The benefit starts when we start getting the people and then we start getting into a process of development that comes from training. The development and training not only comes to the people that we have but with our suppliers that are around us and then these knowledge transfers start forming a pyramid that starts from one and that one starts training another one. It’s a pyramid that starts from our people, from our end, and ends with the people and the suppliers that are around us.
Training makes one think of education. Is Electrolux very much involved in education in Ciudad Juarez?
Around Electrolux there have been universities that started new campuses. The reason they started these is because we were looking for specific skills to provide what we were looking for in the market. These universities started preparing themselves to provide the community with what we were looking for. We have two campuses around us and they are now providing different skill levels that they were not providing in the past. That is the reason why the universities started working with Electrolux. It is working for us and the community now.
Going beyond the community, let’s talk about the governments, the relationship. How would you describe this relationship with all levels of government that affect your operations in Ciudad Juarez?
These agreements started 12 years ago, when we started looking into the best location for Electrolux. The dream started when we put the first piece about 10 years ago and there were different steps that we took but could not make it without the government’s help. From every standpoint they have helped us to provide us the resources, the people, the contacts. Without them it is impossible to make it. The government in Mexico is absolutely incredible when we compared it against other countries and other locations. Specifically here in Juarez all the help that they have provided is unique. That’s the reason why they are a part of our success.
What does Electrolux do in terms of its supplier development? What do prospective suppliers need to understand about becoming a supplier to Electrolux?
In the past we were talking about suppliers that were just approved suppliers. How they can become a strategic supplier for us is when we start going beyond the mentality of looking for a penny, just looking for the price. When we start taking a look into innovation and development and we align it with what we both need, that is when the magic starts happening.
That’s why the strategic development of the supplier comes step-by-step with great communication, understanding what we need. That’s where a supplier who wants to be part of us and part of our family needs to think about looking for a partnership. This also means looking with a strategic vision on how can we both improve to bring innovation and the best to market and create need for the final consumers who will provide at the end of the day, more volume and better products to the market in North America.
What about supplier development?
This is a process of development in every standpoint. We started this step-by-step and the process of constant knowledge we talked about before. We also start there because we help them to develop the products that we need, the quality that we need because we are unique in the specifications that we ask. One other thing, we need not develop the suppliers only, it comes the other way: They develop us as well. They help us to be better every day.
Ten years ago came the announcement of Electrolux in Ciudad Juarez. You spoke of the vision of 12 twelve years ago. Let’s go 10 years ahead, 2024, tell us about Electrolux. What is your vision?
Electrolux right now has about 9,000 workers in the campus. We don’t see why we should not grow to double that. We have the manufacturing facility, we have the land. We have the supply base that is ready to take more. The economic situation will keep growing step-by-step. What we are aiming for is how we can bring not only the four different product lines that we manufacture right now in Juarez but why not bring another four? That’s our dream in 10 years.