Project Management Factory Move to Mexico

Project Management

Factory Move to Mexico

The Gateway Candy Company will be moving to Mexico to produce candy. The hopes are to reduce the cost of the candy and to be nearer one of the major customers in Waco, Texas. Currently, Gateway serves 40 large customers distributed fairly evenly throughout the USA. Customer service is very important, and the candy business is seasonal.

Gateway Candy Company employees around 300 people with 10% being salaried employees. Gateway desires to have as many of the salaried employees as possible transfer to the new location. The hourly relocations will be on a case-by-case basis. Relocation packages will be offered to encourage the move. The majority of the current Gateway employees speak only English.

Towns currently under consideration in Mexico are Reynosa, Matamoros, Juarez, or Nuevo Laredo. All of these towns have a “sister city” on the Texas side of the border. New trade agreements have increased desirability of the Mexican location and election results favor more movement at the border.

The factory size is currently 20,000 square feet and the new location will require an increase. Gateway has targeted 30,000 square feet at the new location. Some company money will be allocated for the improvement of infrastructure – road, electric, sewer and water. Of course, permits and commissions will be an added expense.

Communications are very important to Gateway. The leaders have heard stories of other companies and their failure in the communication of major moves. Stakeholders include the city of Greensboro, suppliers, customers, and employees.

Another area of concern is the movement of equipment. There are two large vat assembly lines in Greensboro that will need to be moved. Also, four wrapping machines, an electromagnetic scanner, 5 forklifts, 3000 feet of shelve storage, 800 feet of conveyor and four ovens will be moved. Also, a new assembly line will be installed in Mexico. The company will now have VAT 1, Vat 2 and VAT 3 assembly lines supplying their customers.

With the layout of the new factory, methods will need to be established and documented. Currently, there are 70 different operations and 450 candy recipes. Methods will include safety instructions and considerations. New work standards will need to be established.

Quality will be monitored in the project. The quality team also has the responsibility of identifying major risks that the project may encounter. Being a 4th level CMMI shop, Gateway wants critical events measured and controlled in this move. The feedback and coordination with our customers are very important to Gateway Candy.

Customers must benefit from this relocation. One major customer in Waco, Texas should benefit because of the shorter supply line. Still, Gateway has 200 customers and desires to keep all delighted in this relocation. The customers follow the 80 / 20 rule which is prevalent in most all operations.