Obstacles and Solutions For Offshore Manufacturers in Latin America

Selling into Latin America has been an extremely challenging venture for most offshore consumer product manufacturers.

Because Latin America comprises 18 distinct markets – each with its own political climate, cultural nuances, currency fluctuations, and other influential factors – the complexity and expense of operating in Latin America has proven to be prohibitive, even for major retailers like Wal-Mart.

In the book Redefining Global Strategy by Pankaj Ghemawat, these complicating factors are grouped into four categories, denoted by the CAGE acronym:

Cultural factors that impede the flow of business for offshore manufacturers in Latin America include language/dialect barriers, various ethnicities, religious differences, lack of trust, traditionalism, and regional insularity;

Administrative factors, such as importation issues, lack of common currency, political hostility, corruption, and weak institutions, are pervasive;

Geographic factors include not only distance but border issues, time zones, climates, disease environments, navigability, weak transportation and communication infrastructure, and high transport costs;

Economic factors include currency fluctuations, disparities in local purchasing power, availability of financial resources, and local pricing instability.

Historically, manufacturers have relied on outside, contracted entities such as national distributors to navigate this complex web of factors. While this is a viable route to the consumer, it is inherently risky and expensive for the manufacturer. Both the brand’s integrity and the manufacturer’s bottom line are constantly at risk.

With margins growing thinner every year, manufacturers are recognizing that this risky and inefficient distribution system is inherently flawed. Fortunately, it can be modified, even bypassed.

Many manufacturers are now exploring a new distribution model – an outsourced direct-sales model that effectively navigates the CAGE factors, creates transparency, safeguards brand integrity, minimizes risk and maximizes profit. Thoroughly tested and proven viable by Sharp Electronics, the SDO platform is changing the way business is done in Latin America.

With growing competition, thinning margins and significant risk, it has become clear that the only way to:

  • bridge cultural differences,
  • collect valid market intelligence on the competition,
  • ensure brand integrity and solid customer relations,
  • maintain a consistent supply chain,
  • and maximize sales,

… is to flatten the distribution channel, eliminating the distributor’s role and placing these realms of responsibility – and profit – back in the hands of the manufacturer.

Until recently, the only way to accomplish this was to establish a fully-staffed local office in each major market or region. Under current market conditions, with margins getting tighter every day, this is simply not a viable option for the majority of manufacturers.

Fortunately, with the introduction of Sales Direct Outsource (SDO), manufacturers have a new option to consider.

What Is The SDO Difference?

Instead of outsourcing segments of the process to different entities, SDO gives manufacturers access to a fully assembled, fully integrated platform, ready to facilitate business in Latin America.

SDO is a comprehensive suite of proven services that together comprise a turn-key system for doing business in Latin America – profitably. This tightly integrated network includes customer targeting and acquisition, sales and marketing, product logistics and delivery, and post-sales support teams throughout Latin America. This seamless platform translates into very compelling expense-to-revenue ratios.

The SDO model not only provides the best value in the industry, it also provides an unprecedented level of transparency. Operations are facilitated and tracked through a customized ERP system with real-time data, easily accessed online. From that centralized vantage point, there is no lag time or “smokescreen.” Manufacturers gain direct access to feedback from the channel, and in light of the current economic climate, that has never been more valuable.

Flexi Staffing and Their Benefits

With the increasing economy, companies are now finding ways where they can continue and try to save or reduce the expenses. One way is by going ahead and recruiting on contracts. Temporary Staffing or Contract Staffing is a process where organizations hire professionals based on the requirements, for a particular time period.

This way of employment is cost effective as this way, you simply hire if it is required. Here you will get to know different aspects of this type of staffing service. When you are hiring a professional, you have to make sure that a proper assessment and screening is done of the individual or people who could be working for you. You can find the best in the field to work for you for a certain amount of time. You can even hire a company to focus on the work or project.

Benefits of Temporary Staffing

Based on various factors, there is a constant demand of people needed for the job. Due to this there is a bridge that needs to fill the gap. This form of employment helps to fill this gap as well as get the work done on time. It is also helpful as people who work on contract basis are willing to take up work for a specific time when it is needed.

Cost effectiveness-
This type of work helps a company to cut costs as they are hiring people only for a certain period of time as well as only when it is required. It will help the company to reduce other expenses that are incurred when they hiring people to work for them continuously. Additionally, it saves the company from the time and energy that goes into training new employees for the job.

Receiving the best
Whenever you hire people on a contract basis, there are many experts who would rather act as freelancers or as contract employees. When a requirement comes in, you can be certain that as a company you will get the best in the market to do the job and add to the pride of quality work.

Save on liabilities
We have seen companies closing due to the fact that they have gone bankrupt and have cut down the amount of people employed in their company due to various reasons like process shutting down or finishing etc. In these cases it becomes a liability for that company because they still need to pay even when there isn’t any work left, hiring people on contracts helps the company to save on this aspect of a company.

Save on time
Businesses that cater to Flexi Staffing Solutions already screen the people to determine where and which person can fit the needs of the requirements of the company. If the same is completed, it takes time as there that goes to the screening and interviewing people. Once a company takes care of this requirement, they go ahead and ensure that you will get just the those who are qualified for the job.

Staffing Software and the Fear of the Unknown

It’s Monday afternoon and your office phone rings. A software sales person is on the other line asking if you are happy with your present staffing software solution. In your head you think “no,” but instead you tell the sales person that in fact you “are satisfied with your current solution.”

Question: Why do we do this? Is it because we don’t want to deal with the hassle of changing software? Or is it because we are uncomfortable with change itself? What are the benefits of moving from the safety of the “known” (your current software) to the “unknown” (a new, potentially better, solution)? What if I told you that change is a positive thing, and that the software implementation/integration process isn’t so terrifying? Would you be willing to explore other solutions?

Check out the product!

When exploring other software solutions it’s important to examine the software through a series of thorough demos. You want to be able to see all the available features, making sure that the solution satisfies your business needs, as well as needs you didn’t even know you had! During the demonstrations, ask the sales rep questions about how this solution can streamline day-to-day processes, and how it will increase productivity and profitability. Working smarter, not harder, is crucial in today’s world, and your software should be able to accomplish that for you.

Ask Around

Of course every staffing solution is going to say they are the best in the industry. Always ask for client referrals. The software vendor will have no problem providing a list of referrals for you to contact. Hearing about how other customers feel about the solution and the service can help confirm that you’re making the right decision.

Will someone hold my hand?

Once you’ve made your decision to make the change, the actual implementation / integration process is probably the one thing people fear the most. Who is going to help me make the switch? Where will all my data go? Will everything transfer over smoothly? Is there a charge for the software implementation? How much time will everything take? Will productivity be down? These questions make staffing firms uneasy, as their data and time affects their profitability.

When asking questions about the process make sure that you will be assigned a project manager. You will want someone to thoroughly explain each step of the process to you, set goals and timelines, and be there to assist you every step of the way. This person will be your primary company contact for every aspect of the implementation and integration process. This helps set realistic dates, keeps everyone on target, and assures that the “live” date is met.

Post Support

Post “live” date support is essential. A strong support group will help you take advantage of all of the benefits of the new software. Questions will come up as new users capture their activities and the software blends into the daily workflow. Management will realize new reporting aspects and be able to utilize information to make the company more profitable.

Making the switch to the right software provider isn’t nearly as distressing as one might think. With the help of a good company, solid software, and a dedicated project manager, making the switch can be a smooth and planned process — which in turn will positively affect your company’s success.