Frame-X Boosts Production Efficiency with Major Expansion in Mexico

Expanding manufacturing operations to a new country presents both opportunities and challenges. For Frame-X, a U.S.-based manufacturer specializing in prefabricated wall and floor assemblies for residential construction, the decision to expand into Mexico was driven by growing demand in the U.S. and the need for increased production capacity.

In 2012, Frame-X began its journey to establish operations in Tecate, Baja California, Mexico, with the help of  Co-Production International (CPI), leveraging Mexico’s proximity to the U.S. and cost-effective manufacturing advantages.

This case study explores how Frame-X successfully scaled its manufacturing operations in Mexico by partnering with CPI, utilizing shelter services to overcome regulatory challenges, train a new workforce, and streamline administrative tasks.

Challenges of Expanding Manufacturing into Mexico

Frame-X faced several unique challenges when expanding into Tecate, Mexico:

1. Non-Traditional Manufacturing Space: Unlike most maquiladora operations, which operate inside industrial buildings, Frame-X’s manufacturing process required a more unconventional solution. The nature of their product didn’t fit the mold of typical IMMEX operations, which involve renting warehouses or factory spaces. Instead, Frame-X needed an open-space facility to accommodate their production. This non-traditional setup presented logistical and operational challenges, but CPI worked with Frame-X to develop a solution by securing a 42-acre outdoor manufacturing yard.
2. Regulatory Compliance: In addition to the need for open-space manufacturing, Frame-X’s prefabricated components were unfamiliar to Mexican regulatory bodies. Navigating the complexities of importing and exporting materials,  while ensuring compliance with local regulations added further complexity to the expansion.
3. Training a New Workforce: Prefabricated construction manufacturing was new to the local Tecate workforce. Frame-X had to develop specialized training programs from scratch to ensure the workforce met their high production standards.
4. Administrative Burden: Managing day-to-day operations, such as payroll and recruitment, while ensuring labor law compliance in a new country required significant support. Frame-X needed CPI’s expertise to handle these tasks so they could focus on ramping up production.

Why Frame-X Chose Mexico

Expanding into Mexico was a strategic decision for Frame-X due to several factors:

• Proximity to the U.S. Market: Mexico’s location allows for faster, more cost-effective transportation of finished goods to U.S. customers.
• Lower Operating Costs: By relocating part of their operations to Mexico, Frame-X could lower production costs while maintaining high quality.
• Past Success with CPI: Frame-X had previously partnered with Co-Production International (CPI) and knew the value of their shelter services in navigating the complexities of manufacturing in Mexico.

After evaluating other cities like Tijuana, Frame-X selected Tecate as the site for their expansion due to its favorable business environment and their prior positive experience working with CPI.

The CPI Solution: Comprehensive Shelter Services in Mexico

To ensure the success of their manufacturing expansion in Mexico, Frame-X relied on CPI’s comprehensive shelter services, which provided expert guidance in several key areas:

1. Creative Facility Solutions for Non-Traditional Manufacturing: Understanding that a traditional warehouse would not work for Frame-X’s unique manufacturing process, CPI secured a 42-acre open space yard. This outdoor setup provided the flexibility needed for their large prefabricated components while adhering to operational and logistical requirements. CPI’s ability to "think outside the box" ensured that Frame-X's production facility could function efficiently despite the non-standard nature of their operations.
2. Compliance and Logistical Expertise: CPI leveraged its deep knowledge of Mexican regulatory frameworks to handle the complex import and export requirements for Frame-X’s materials. The compliance team not only ensured that Frame-X’s manufacturing met the necessary standards but also streamlined the cross-border logistics to minimize disruptions. This expertise helped Frame-X stay on schedule and maintain smooth operations.
3. Tailored Workforce Development Programs: Given the specialized nature of prefabricated construction, CPI took charge of recruiting and training local employees. CPI’s team worked closely with Frame-X to develop customized training programs that equipped the workforce with the specific skills required. Within four weeks, the workforce had expanded from 60 to 160 employees, and nearly all recruits were retained, proving the effectiveness of the tailored training approach.
4. Efficient Administrative Management: CPI’s shelter services included managing all administrative tasks, from handling payroll to ensuring compliance with Mexican labor laws. This allowed Frame-X to focus on ramping up production without the burden of navigating complex administrative requirements. CPI’s expertise in managing overtime, incentive programs, and employee benefits ensured a motivated and compliant workforce.

Results of the Mexico Manufacturing Expansion

Thanks to CPI’s shelter services, Frame-X experienced tremendous growth and operational success in Mexico manufacturing:

• Facility Growth: What began as a modest three-acre facility in 2012 has now expanded to a 42-acre manufacturing hub in Tecate, Baja California. This growth has allowed Frame-X to significantly increase production and meet the rising demand in the U.S. market.
• Increased Capacity & Efficiency: By shifting part of its assembly process to Mexico, Frame-X freed up valuable resources in the U.S., allowing it to focus on R&D and product innovation. The additional capacity provided by the Tecate facility also enabled Frame-X to take on more projects and drive business growth.
• Workforce Stability: Frame-X places a high priority on employee welfare, providing competitive wages, transportation, and on-site meals. This commitment to their employees has ccontributed to high retention and productivity, fostering a stable and motivated workforce.
• Compliance & Cross-Border Success: With CPI managing the regulatory and logistical challenges, Frame-X successfully overcame the compliance hurdles associated with expanding into Mexico. CPI’s import-export team continues to ensure that Frame-X’s products move seamlessly across the border, meeting tight project deadlines.

Key Takeaways from Frame-X’s Expansion

1. Strategic Location & Partnership: The proximity of Mexico to the U.S. made it the ideal location for Frame-X’s manufacturing expansion. Partnering with Co-Production International ensured that they could navigate the complexities of setting up operations in Mexico with ease.
2. Scalable Workforce Solutions: CPI’s recruitment and training programs enabled Frame-X to quickly scale its workforce and meet production demands. CPI’s expertise in finding qualified candidates and developing specialized training programs was critical to the expansion’s success.
3. Streamlined Operations: By outsourcing administrative tasks to CPI, Frame-X could focus on innovation and production. CPI’s support in payroll, compliance, and logistics allowed the company to operate efficiently and without disruption.

Testimonial from Frame-X

“For us, returning to Mexico was an easy decision, and partnering with Co-Production International made all the difference. CPI’s team rose to every challenge, whether it was compliance, recruitment, or day-to-day operations. We have experienced nothing but success, and with CPI’s support, we’re looking forward to a bright future. We wouldn’t be back here without them.”
– Frame-X Leadership Team

Frame-X’s expansion into Tecate, Mexico, has been a resounding success, thanks to their strategic partnership with Co-Production International. With a growing facility, a well-trained workforce, and seamless operations, Frame-X is now well-positioned to meet the demands of the U.S. market and continue its trajectory of growth. CPI’s shelter services have proven invaluable in helping Frame-X overcome challenges and achieve its goals in Mexico.

Are You Ready to Expand Your Manufacturing Operations in Mexico?

With over 40 years of experience, Co-Production International (CPI) helps companies like Frame-X set up and scale their manufacturing operations in Mexico. From compliance and recruitment to day-to-day administrative management, CPI provides comprehensive shelter services so you can focus on driving your business success.

Contact us today to learn more about how manufacturing in Mexico can benefit your company.