• M-EXPO • WHMA - Wired In • Why Pay an M&A Fee • Redemption Over Replacement • Optimizing the Supply Chain • Smart, Hungry, and Humble • Update from Reshoring Initiative • When in Need, Make it Yourself! January February 2019 Cesar-Scott Straddling the Border with Innovative Thinking By Joe Tito Wiring Harness News ______________________________ C esar-Scott, Inc. was in- corporated in 1988, but it wasn’t until the mid 1990’s that they began to concen- trate on the contract manufacturing of wire harnesses. Since that time, they have built assemblies for the ap- pliance, automotive, electronic and industrial markets. Their mainstay is the 20-26 AWG range, but they also produce many assemblies in 12 thru 18 AWG. They are ISO 9001:2015/IS0 14001:2015 certified and build to the IPC/WHMA-A-620 Standard. As a somewhat regional supplier, most of their business is in the Border- plex between Ciudad Juárez, México and El Paso, Texas. Many of their cus- tomers have corporate headquarters elsewhere, but the facilities they supply to are within this bustling re- gion. WHN recently interviewed the company’s President, Gustavo Farell, about their unique strengths and some new avenues they are pursuing. For many years, Cesar-Scott pro- duced comparatively simple assem- blies. However, as Gustavo discussed, that has changed. “We’ve gotten away from simple discrete wiring to more complex harnesses, usually in the lower to medium volume levels,” he noted. The State of Chihuahua is widely held as the wire harness capi- tal of the world. In such a tough com- petitive region, it’s easy for a competi- tor to underbid and snap the simpler designs away. Gustavo has therefore steered efforts towards building high- er level assemblies while providing more value for his customers. The company has also developed a talent for quick changeovers result- ing from smaller production quanti- ties. As Gustavo described, “This al- lows us to preform particularly well when a customer has product fami- lies of harnesses with the same con- nectors and terminals, but with dif- ferent configurations.” One thing the company is par- ticularly proud of is their ability to design for manufacturability and as- sembly (DFMA). They frequently con- Board assembly in Juárez sult with customers’ engineers in the design stage to help ensure the prod- uct can be assembled cost efficiently and effectively. “That is something I have always emphasized as key to the contract manufacturing of wire and cable assemblies, or any other product for that matter,” Gustavo in- structed. He stressed that, for mostly liability issues, while his team is very good at suggesting improvements to the manufacture of products and to a general drawing clean-up; they have the customer sign off on any changes, thus shying away from full-blown har- ness design. His senior administrative and engineering team has over 150 years of combined experience work- ing towards this goal. Within the past three years, Cesar- Scott moved their corporate head- quarters from El Paso’s Westside to a very El Paso-centric location. They had always manufactured in Cd. Juárez, but remodeling a building in an old industrial district in down- town El Paso has opened some ad- ditional doors. “This put us in close proximity to the two bridges crossing into Mexico, along with El Paso Inter- national Airport and other important transport locations,” Gustavo detailed. With the addition of this facility they now have the ability to do some wire and cable assembly and related kit- ting operations in the US. “This has given us the space and flexibility to work with customers who may not necessarily need or want their pro- duction to go across the border.” He feels this strategy has been especially important in today’s fluid trade regu- lation environment. _____________ Continued on page 42 Optimizing the Supply Chain By David Panco ______________________________ C ompetition is getting tougher in the wire har- ness industry. Costs are rising, and companies are looking to find cost saving opportunities that can positively affect the bottom line. Finding those costs to reduce and eliminate are getting harder and hard- er to find. There is one area that ev- ery company should look at, and that is their global supply chain. Where does that raw material really come from, what is the country of origin, and are there customs duties built into the price of the material. There are some golden opportunities wait- ing for those companies to find. Globalization is creating more for- eign content in many of the products built today. More and more compa- nies in the US are purchasing more foreign origin components to build their products. There are costs in the supply chain that most companies overlook, don’t pay attention to, or think they are just the “cost of doing business”. Sometimes, these costs are buried in a composite number where they are not visible to manag- ers and executives. These are the customs fees. Here is a list of the most common customs fees paid in the US. • Customs Duties • New tariffs added to Customs Duties • Merchandise Processing Fees • Harbor Maintenance Fees The costs that are apparent are the customs fees (duties and tarrifs) paid directly to US Customs and Border Protection by a company importing goods into the United States. The Merchandise Processing Fee (MPF) is paid for importing shipments into the US and are an additional cost to a company. This fee increased on Octo- ber 1, 2018, and the MPF is based on the value of the shipment (0.3464%) _____________ Continued on page 39