How do you compete in Costa Rica's mature manufacturing industry and with other countries?
JOSE SALAZAR We practice lean manufacturing, and learning to compete with China is on everyone's agenda. In order to compete, we must ensure our market niche is well established and the quality of our brand is recognized in demand markets across Europe and the US. The Asian and Pacific markets are most competitive. Our strategy has been through lean manufacturing and trying to reduce our operational costs. This helps us remain competitive in terms of lead time, quality, and, in many cases, prices; hence, we are able to get the product to customers faster through our operation here in Costa Rica. This is because we are also reducing our production cycle through automation and improved processes; this is the lean manufacturing philosophy.
GUIDO SALAS N. The trend of reducing our low-value-added labor is something that we will see more of. There will be more automation, and also technology renovation, which is necessary for our businesses to maintain relevance and the capacity to add value to our corporation and customers. Our aim at Panduit is to maintain a good level of investment in renewal of technology and also in terms of using the capabilities that we have been building in our people throughout the last 20 years to help us innovate and design the manufacturing systems of the future. We are currently building more capabilities on our engineering side to dedicate them to be active participants in developing automation and higher technology production processes. We have to develop the capabilities to support that 20-30% growth that we are pushing for, and that will demand renovation of technology so as to expand our production capacity. That is also a global trend, and we want to do more with less overall.
What more can be done to support Costa Rica's progress in manufacturing?
JS One of the biggest problems we have is in infrastructure, both physical and electrical. People, companies, and investors still come here because we have a high educational level and good political situation. However, we need to fix a lot of things. The government needs to think about strategies to move companies to other sites because the free zone areas near the airport are extremely crowded. Sometimes when we need to move merchandise, we try to do so at night to minimize the cost of sitting in traffic. The other thing is the cost of certain utilities such as electricity.
GSN Maintaining the technical edge and dealing with the speed of innovation is the challenge for all businesses. To address this challenge and propel Costa Rica forward, we actively participate in industry councils in the electrical and networking business. Part of what we strive for is to look for optimum solutions that offer added value to our customers. With that clarity in mind in terms of offering holistic solutions, Panduit develops constant changes and evolution in its products while always offering a consistent level of quality.
Do you teach special skills and apply training programs to those who work for Panduit?
GSN We have a lot of gratifying experiences with people we have hired as manual operators who have gone on to hold positions in technical management areas like engineering. Hence, the experience and training we provided has brought them from manual labor jobs to management positions, transforming their lives along with the company over the years. In some areas, we imported talent from around the country, but we had to teach them a lot in terms of how to do what they needed to do in Panduit, and the results have been incredible in technical areas like precision mechanics, hydraulics, molding, and plastic conversion. Therefore, the combination of the education and training they had from their schools and the internal training we provided allowed us to develop these highly skilled personnel in new and hitherto under-focused areas. Today, it is no longer such a challenge to find talent in areas like precision mechanics, hydraulics, electrical, or precision metal fabrication.
Has competition for skilled labor affected your business?
JS Previously, our competition within the labor market was limited to the manufacturing industry. However, nowadays our biggest competitors are medical and shared services companies because they're anxious to take people that are experts in operating machines or have a good handle of English. It is difficult to compete with the medical device companies because their monetary incentives are excellent compared to other industries; therefore, we are trying to offer our people stability and a good work environment.