Qualcomm Expands into Tijuana Due to internal growth at San Diego Headquarters
Qualcomm, a Fortune 500 leader in the telecommunications industry, selected NAPS to establish and provide ongoing administrative services for its Tijuana, Mexico operations. Since 2004 NAPS has been a service provider partner to Qualcomm, enabling the company to operate seamlessly on both sides of the border.
The initial motivating factor in looking to expand in Tijuana was the company’s internal growth, the fact that Qualcomm was running out of space at its San Diego headquarters. Because of its geographic proximity only 30 minutes from Qualcomm’s manufacturing facility in San Diego, Tijuana was a natural choice for expansion. At the Qualcomm facility in Tijuana the company assembles and refurbishes Qualcomm’s Omni Tracs products: high level GPS systems for the trucking industry.
As Qualcomm’s management evaluated options for expansion, it was clear from a labor stand –point that expanding certain processes in Tijuana would result in tremendous cost savings for the company. When comparing Tijuana vs. San Diego, the company realized a savings ratio of up to 10:1 in direct labor and up to 3:1 in indirect labor costs. An analysis of the cost to manufacture the same unit in Tijuana vs. San Diego in Q2 and Q3 of 2009 resulted in a range of cost savings from 45% to 75%.
Alberto Fragoso is Director of Operations for Qualcomm. Fragoso was brought on board to set up Qualcomm’s plant and he has worked closely with NAPS’ staff to ensure the success of the operation. As far as the service he has received from NAPS, Fragoso comments: “They really know the maquila business and have a very strong and professional staff… they are honest, make you feel important, help you in many ways and most importantly, they will always be looking out for you…even at a personal level.”
Setting up the operation to the standard of excellence that Qualcomm expected took three months, with an additional three months to put in place quality controls. Regarding the competence of the staff that was hired in Tijuana, Fragoso states that the level of preparation of the Mexican engineers and technicians is comparable or superior to that found in San Diego. While there were roadblocks that the company had not foreseen in planning this project for Mexico, Fragoso gives credit to NAPS management for ensuring all issues were resolved.
Within the first year that Qualcomm operated in Tijuana the company achieved a cost savings of over 2 million dollars. Alberto Fragoso emphatically points out that he would recommend NAPS to other companies that are looking to set up manufacturing in Mexico. “I have never been a fan of shelters in Mexico as I have set up companies in Mexico and the U.S., but working with NAPS is something else, a different experience”
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