Industrial Talk is speaking with to Alberto Villarreal, Managing Director with Nepanoa about "Latin America Reshoring or Nearshoring Solutions". Get the answers to your "Reshoring" questions along with Alberto's  unique insight on the “How” on this Industrial Talk interview!

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ALBERTO VILLARREAL'S CONTACT INFORMATION:

Personal LinkedIn: https://www.linkedin.com/in/betovillarrealgarza/

Company LinkedIn: https://www.linkedin.com/company/nepanoa/

Company Website: https://www.nepanoa.com/

PODCAST VIDEO:

https://youtu.be/2bO7FkzOZ_w

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PODCAST TRANSCRIPT:

mexico, alberto, companies, scott, people, latin america, nepanoa, industrial, business, conversation, manufacturing, client, countries, supply chain, talk, sourcing, financial, state, wrap, operating

00:04

Welcome to the industrial talk podcast with Scott Mackenzie. Scott is a passionate industry professional dedicated to transferring cutting edge industry focused innovations and trends while highlighting the men and women who keep the world moving. So put on your hard hat, grab your work boots, and let's go

00:21

Alright, once again, thank you very much for joining industrial talk a platform that is dedicated to you industrial professionals all around the world. You are bold, brave, you dare greatly you collaborate, you're solving problems. You're making the world a better place. That's why industrial talk is your cheerleader. In all things industrial. All right in the hot seat. Alberto Villarreal Nepanoa is the company we're talking about nearshoring, we're talking about seeing what we can do, what are the strategies? What, what avenues can be taken to try to sort of bring back maybe some manufacturing? And and make it a little bit more efficient? Maybe south of the border type of solutions? Napa? No, it is your team? Let's get cracking. Yeah, it's gonna be a great conversation, you'll like this conversation. It's an interesting conversation, because I know that from my perspective, that I've had a number of conversations sort of wrapped around supply chain, what are those strategies? What do we do? How do we become more efficient? How do we create a supply chain that is a little bit more durable than what we are expected? That what we experienced? So anyway, great conversation, great solution, Nepanoa. All right, once again, before we get into the conversation, we're going to be doing a 2020 to wrap up. And not to not to sort of explain to you what, what's going on. But I've been very fortunate to be attending conferences, meeting with companies and professionals, talking to them about some of the challenges that are taking place within manufacturing, digital transformation, you name it, it's all out there. And there's a lot of great, great thinking, and solutions that exist out there. So I'm going to be wrapping it up. But sort of a precursor, there are a couple of things that sort of fall into the category one is, and this is this is a constant theme. There's a trust, who do I trust? I'm out there on the World Wide Web, I'm looking around, I'm trying to figure out how to create a business that's more resilient. What do I do? Where do I go? What are those avenues? Who do I trust? Because there's a lot of people hanging shingles out there saying, I trust us do this, trust us do that. But who do I really trust because I know I need to do something. So trust is a big deal. The second sort of theme that exists out there today is one there's a speed there's a there's a sort of a there's a rapid expansion, the solute, there's just so much speed and velocity that exist out there and industry. The challenges, again, I just trust, but where do I start? What what do I do? And and, and I think that that's really important. And I think that there are a lot of great companies out there that can definitely help you navigate those waters and to be able to deal with velocity that exist today in industry. So those are coming to the sort of the themes that are going to be communicated in the 2020 to wrap up. The other thing that we're doing is in light of the same thing is that you have these verticals. And I'll say it's manufacturing, okay, manufacturing, and there are so many solutions that are hammering, manufacturing, is how do you sort of pull that and to create a great sort of a cogent picture behind it? And and that, you know, that could be digital transformation? What do we do? Where do we go? Is that really necessary to, let's say, cybersecurity, if you're going to, if you're going to be digitizing your business, you need to make sure that you're upfront with your conversation around cybersecurity, that's to, again, who do I trust? Where do I go? All of these things? And how do you pull all of these solutions? What What technology do I put in place? What what does that mean? How do I compress those times? So these are just conversations that had happened over the past year, attending conferences, meeting up with people all fantastic stuff. So be on the lookout for one the year wrap up and then to the series that I'm going to would love to be able to pull together that maybe its manufacturing oil and gas, pipeline, utilities big, big need to sort of pull all that together and what does that picture look like? So all of these things are just really absolutely spectacular. So that's that's your that's where I'm at. That's where I'm going. That's what I'm pushing. So be on the lookout for that and go out to industrial talk and you know No click and be a part of that. So, all right, Napa Nova. So the reality is, is that we had this this COVID, it had its supply chain went for galley. And we needed to come up with some solutions and strategies that maybe address nearshoring reshoring, bringing some of the critical manufacturing components in North America, and Nepanoa is are the leaders in opening up, Mexico and South America and areas in there to be able to begin sourcing from those locations. And so anyway, it's a great conversation. Really enjoyed it. It's timely. So enjoy Alberto Alberto, welcome to industrial talk. Thank you very much for finding time in your busy schedule to talk to our listeners, which happen to be the best in the world. How about that?

05:54

I believe you. How are you doing? Very good. Scott, thank you so much for the opportunity. It's a pleasure. Yeah, talk to you and share perspectives with you.

06:03

I'm all into it. I'm telling you right now, listeners, we're gonna be talking a little bit about nearshoring is a great topic. Primarily Mexico, Latin America. And Nepanoa No, I got it. Nepanoa, the hey got leaders in in being able to make that happen. And I think that that's an important conversation to have specially with challenges with supply chain and, and the importance of manufacturing. Before we get into that conversation. Alberto, give us a little background on who you are. Sure.

06:37

Scott, thank you very much for the opportunity to connect. I am indebted to ERL. I was born and raised in Monterrey, Mexico. And I noticed that sentence was in Spanglish. There was a lot of our rolling there. In English. It's I'm Alberto Villarreal. And I was born and raised in Monterrey, Mexico. It works. Either one works. I've been in the United States since 2003. I went to school at Georgia State University. very stereotypical story. Scott, Mexican kid played soccer, I ended up getting a full ride at Georgia State and playing there. For four years. I had a long career in consulting, one of the one of the big consulting firms. And three years ago, I decided to start my own firm, which is net Bonilla and net Biloela. Yeah, net. benowa is the verb. It means a company, it means to be a companion, right? And the language has Now what'll now what tool was spoken by the Aztecs, who are the fastest the Aztecs lived in Mexico City. And there were the most important civilization in the pre Columbian era. And the name of our company, I love it, because it really describes what we do, we are a companion, right to businesses that want to establish operations, grow their operations, or transform their operations between the US Mexico and Latin America. I've been a resident of Chicago, and for the last 12 years, I moved to Chicago in 2010. And the Chicago Booth grad, for any, you know, MBAs out there, and, you know, very proud of what we're doing in trying to unite us and Mexico, US Latin America, particularly if we're what you're saying nearshoring ally shoring, right there is

08:11

Whoa, hey, I got all the government I didn't get that ally short.

08:19

I mean, well, we need to think about it that way. Right? It's not only a supply chain issue, but with the complexities that are happening around the world. Europe, Asia, I mean, just yesterday, right? We were looking at some missile tests in Asia, we not only need to think of our supply chain, we need to think of as Okay, which countries which markets, which regions are our allies. Alright, so that's a way to take a look at every risk counts when we're thinking of moving operations.

08:45

So one of the questions I have is, is, let's say I approach I'm a business I'm interested in, at least beginning i, i source my products here, I manufacture my products here. I do that over here, wherever here is let's say it's a wherever it is, right? And I see the value, I see the importance of sort of bringing critical items nearer to me, right? And how does that sort of journey begin with you? Like, how do I just approach it? What's that journey look like?

09:17

Sure. So Scott, it's not usually about moving all of your production or source everything from one country. But if anything, the last three years proved to us that, you know, diversification having 123 suppliers of the same part is really beneficial, especially in a state like the one that we're living today that it's really unstable. Um, how it works with us is we have a methodology, which we call the EPA, NOAA lifecycle. And our conversations usually begin with a question. And it's usually the CEO or the CFO, right or just the owner of a manufacturing shop. And the question is, Hey, can I take my facility to Mexico? Can I expand my facility to Mexico, can I find X or Y product in blue? I've heard that Brazil is fantastic for this type of part. That's usually the question. And that's how we begin conversations. From there, we focus on making an analysis. Okay. Let's talk about financials. How would your company look? If you started working in Mexico? Right? How would it work if you sourced this product? From Colombia? Right, let's talk about the people. Okay, if you're going to be manufacturing elsewhere, what type of people do you need? What capabilities are you looking for? Right? What are the biggest issues that you're facing today? Operating elsewhere? Right? How can that play a role? Because Scott, many times when we have these conversations, we think of Mexico as a whole, we forget that Mexico has more than 130 million people in it. Right? We think of Latin America as a whole. But operating in Brazil, Colombia, Chile, Peru, is completely different, different regulations, different, different people, different cultures, and it's important to be able to navigate them. Once we make that analysis, we encourage our clients to make a decision. And you'd be surprised because sometimes the decision is no, guess what? Continue working with a company you're working with or maintain your operations where they are. At this point, it truly doesn't make sense for you to expand. But of course, in a patient's

11:26

so you don't have you can if I came to you and I just said I'm interested, I don't know where to go. I don't know where to start. I don't even I just think it might work out well. The Napa NOAA team net Bonilla will say okay, let's look at let's look at it. And yeah, this is fine. This could be improved this whatever. You give us that roadmap, right?

11:52

I'll give you that, that roadmap, and it will always be backed by data. Right? And it will always be backed by how does this? How is this coherent with the strategy of your business going forward? I'll give you an example. Just today, I had a call with a client that it was going to Mexico, but guess what, the facility that they were looking to, it was 30,000 square feet. They wanted to start with something small, maintain all their operation that us, but they were just looking at Mexico for that specific piece. Well, guess what, we weren't able to find a facility at the price point that they needed it so that it made sense for them. We're gonna revisit this in six months, because today, it doesn't make sense, right? And that's okay. Now, that's one story. The other side of the story is it makes sense. And then our team will accompany through the expansion or through the engagement of sourcing product from Mexico and Latin America. And that is a whole different ballgame. Scott, we're talking government relations, we're talking negotiations, we're talking understanding customs and our border, understanding logistics in general, very well. So we become an extension of the companies that are coming into Mexico and Latin America. And we take care of that project for them. So that way, they can focus on operating do what they do best. And we become their Mexico slash flat tam team to get things done them

13:08

here. What is the value proposition of why I would consider moving operations down to Mexico or even you know, Latin America? What what? What's that driver? Why, why? Why is that important?

13:22

There are several drivers, but there's two that are very important. The first one is people. When you look at the demographic of Mexico, when you look at the demographic of Latin America, you're gonna see young people, the average age in Latin America is between 25 and 30 years old Scott. So when we have young people, young professionals that need jobs that want to innovate, that really gives an opportunity, more importantly, in specific countries, because when we say Latin America, in this conversation, we're ignoring your why we're ignoring Bolivia, Venezuela, right? I mean, we're truly focusing from Brazil, Chile, Colombia, Peru, a little bit of Argentina, and of course, Mexico, but in my world, Mexico counts as North America, Mexicans just happen to speak Spanish. But when you look at dedication level, would you be surprised if I told you that in Mexico, more than 300,000 engineers graduate every year? industrial chemical Central, mechanical?

14:17

That's it's another I would imagine, yeah, that's the case. But you know, it. It's never been a source of topic. But it's important, and especially when we're struggling with finding people here.

14:28

That's exactly the point. So that's why people plays a very important role. The first conversation, the first question that companies have is, hey, what type of people will I find? And the response is, well, what type of people do you need? Right? Now? What if I told you that turnover for companies in Mexico is 60% less than it is in the United States? No way. 60 60% Think about all the training that goes in when you hire somebody, think about the years of experience that they You may have operating a machine managing a team, just knowing the culture of your company. And then having to do that all that investment again and again and again. And again. That's a big number. Right? So that one is the main point. The second point is the financial one. But I want to be very specific here. When I talk financial, I don't mean oh, it's cheap labor, because guess what it is, when you compare Latin America with Asia, very difficult and very, very, very, very few cases, you will find that it is less expensive than it is to operate in Asia. But when I say by financial, it's the whole supply chain, you will need to make sure that everything flows, right via Latin America until you know it reaches your final client. And of course, there's a labor component then, right? It's not as expensive as it is, you know, in Canada or