To be part of the assembly supply chain, you must develop at Tier 3: Carlos González

Monterrey, NL. The incorporation of third-level suppliers or Tier 3 to the supply chain of an assembly company like Tesla, does not happen immediately, since the assembly companies bring their own suppliers. And even though there is talk of import substitution, the ideal is to work on long-term strategies to develop Mexican companies, he commented to The EconomistCarlos González, director of Hultek.

Import substitution often happens because the large assemblers also attract their main suppliers to settle in Mexico. Hence the talk of import substitution, however, the ideal is to work on long-term strategies to develop Mexican companies.”

“It’s not always easy, because it requires a high degree of specialization in topics such as engineering, innovation, and even raw materials,” said the manager.

González added that the main assemblers that arrive in the country land in Mexico with their own suppliers to guarantee that the processes remain practically the same and it will be a matter of time before they begin to look for regional suppliers.

“As Hultek (leader in the manufacture of rubber parts for the automotive sector), we are at a Tier 3 supply level, that is, our products do not go directly to the assembly plant, but to a Tier 2 (second-level) supplier which is in charge of putting together a more integrated system and it is from this level that the demands for quality in the processes arise more,” he said.

According to the Industry Supplier Chain in Mexico (CAPIM), up to 50% of the suppliers to the automotive industry, in 2021 did not have the specific certifications to supply the sector and the majority belonged to the second and third levels of the supply chain.

He indicated that where there are more possibilities of substitution of imports for local products is in the Tier 3 levels of this supply, which is where companies such as Hultek and others that emerged as manufacturing SMEs are located and today have taken advantage of the nearshoring moment.

“If we have more and more companies certified at this level, we will have a greater opportunity to supply the following supply levels and also to develop, where possible, these companies so that they can move up the supply chain,” he assured.

He said that Hultek has gone ahead to seek certifications, such as IAFT 16949, as well as quality certifications that have allowed them to diversify their supply to industries such as household appliances and oil & gas.

The IATF 16949 certification is an international standard for quality management in the automotive industry. Very similar and even based on certain fundamental aspects of ISO 9001, but adds implementations that are necessary for the industry.

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