Jose Ruiz » Manufacturing

Good news: Manufacturing index improves

Jose Ruiz — Wed, 01 Sep 2010 15:39:48 +0000

The manufacturing index published by the Institute for Supply Chain Management provided a positive surprise today. The index increased to 56.3 for August. A modest 0.8 point jump when it was expected to drop.

The news comes as the Peso continues to weaken against the Dollar and key indicators still point towards a slow recovery.

Jose Ruiz is Principal and Executive Search Consultant in Heidrick & Struggles. You can share your views of this article or aything related to manufacturing or executive search at: jruiz@heidrick.com

Heidrick & Struggles International, Inc., (Nasdaq:HSII) is the leadership advisory firm providing senior-level executive search and leadership consulting services, including succession planning, executive assessment and development, talent retention management, transition consulting for newly appointed executives, and M&A human capital integration consulting. For almost 60 years, we have focused on quality service and built strong leadership teams through our relationships with clients and individuals worldwide. Today, Heidrick & Struggles’ leadership experts operate from principal business centers in North America, Latin America, Europe and Asia Pacific. For more information about Heidrick & Struggles, please visit www.heidrick.com

Mexico Recovering on Manufacturing Momentum

Jose Ruiz — Thu, 13 May 2010 19:18:40 +0000

The internal market remains sluggish due to high unemployment and uncertainty but that can change as industrial production continues to rise on surging demand in the U.S. which accounts to about 80 percent of Mexico’s total exports.

Industrial production in March rose the most in almost four years as output climbed to almost 8 percent from a year ago according the most recent report of the national statistics institute. The number is an unexpected but positive surprise over the 5.9 percent that had been predicted by the median of 17 forecasts compiled by Bloomberg.

The increase is directly linked to an 85 percent jump in automotive industry production as the sector in Mexico continues to recover.

This will most likely have a cascading effect boosting internal demand in the second half of the year as manufacturing drives employment, brings back purchasing power and consumer confidence.

Jose Ruiz is Principal and Executive Search Consultant in Heidrick & Struggles. You can share your views of this article or aything related to manufacturing or executive search at: jruiz@heidrick.com

Is change management about to change?

Jose Ruiz — Thu, 25 Feb 2010 15:47:50 +0000

A few years ago I had a conversation about change with Mike Osterling. My lean manufacturing mentor and consultant. The topic revolved around change management and how it became easier as an organization embraced constant change as part of its culture. My theory was that at some point there would be no need for change management if change became part of the culture and the operating environment. Mike respectfully disagreed.

At that point our discussion was focused on organizations that struggled with change and struggled adapting to a changing environment. A place in time where leaders had to nudged the members of their organization to rethink the way things were being done. Leaders pushed to reinvent the business and innovate. This was the period in time that made reengineering popular. The challenge of leadership was to make sure the team kept up with a changing environment.

Times are changing. Leaders beware: your challenge when it comes to change management is about to shift.

The generation that entered the workforce with the mindset of building a life long career with a steady hand in a corporation is at retirement age. Leadership positions are now being filled by the generation that challenged the status quo. A generation of leaders that learned to manage change and developed executive skills to push the previous generation towards innovation is gradually facing the challenge of managing a generation that does not know status quo. The dream of a culture of change has been realized. These coming generations are built on a higher rate of change.

Consider that everything we do is based on intervals. Everything we do is a cycle. From communication to our strategic planning. Those intervals are getting shorter. Our main form of communication has gone from letters to emails to txt msgs. Our planning horizons are shorter. We are iterating faster. We correct faster. Which is good right? The next generation of executives is built on speed, multitasking and bursts. A generation that feels a phone call is restrictive because you can only carry one conversation at a time.

We are at the inflection where the challenge of change managment is going to shift from helping teams transition to keeping teams focused and helping them stay on track.

Am I getting old?

Jose Ruiz is Principal and Executive Search Consultant in Heidrick & Struggles. You can share your views of this article or aything related to the manufacturing, maquiladora operations or executive search at: jruiz@heidrick.com

About Heidrick & Struggles International, Inc.

The world’s premier provider of senior-level executive search and leadership consulting services. The firm’s executive recruiters and leadership experts operate from principal business centers in North America, Latin America, Europe and Asia Pacific. In Mexico, Heidrick & Struggles operates offices in Mexico City and Monterrey. For more information about Heidrick & Struggles please visit www.heidrick.com

Can the automotive industry in Mexico grow by 20% this year?

Jose Ruiz — Mon, 15 Feb 2010 19:45:45 +0000

The manufacturing sector in Mexico is slowly getting stronger. Industrial production increased by 1.6% in December for the first time since 2008 fueled in great part by an increase in demand led by the U.S. which accounts for approximately 80% of manufacturing exports.

It is no surprise that the increase coincides with an improvement in the automotive industry that accounts for approximately 21% of Mexico’s total exports. In an interview with Bloomberg Ana Ruth Solano, the Economy Ministry official who oversees the automotive industry is predicting a 20% rise this year as local and U.S. demand rebounds after the great recession.

A big part of that increase might be coming from small cars. There is an increased appetite for smaller cars in the U.S and many of the car manufacturers are banking on the segment to help them through the next few years. Mexico has been strong in the segment for many years and is well positioned to bank on the trend. A large part of existing capacity is already focused on small cars and auto companies such as Fiat continue to invest. Fiat Chief Executive Sergio Marchionne recently announced a 550M investment to produce up to 130,000 Fiat 500’s a year out of the Chrysler’s Toluca plant.

Solano also mentioned that Nissan is planning an investment to produce small cars, and may choose Mexico, but no announcement on the location has been made.

About Heidrick & Struggles International, Inc.

BUSINESS WEEK: What You Should Know About Headhunters

Jose Ruiz — Thu, 11 Feb 2010 15:21:13 +0000

Executive recruiters can usher you into the corner office or leave you stranded after the fourth interview. Here’s what to expect.

by Joseph Daniel McCool

Executive recruiters—or headhunters as most businesspeople know them—are especially influential agents of executive mobility and management-career opportunity.

They are powerful ambassadors of hiring organizations’ brands and cultures, and their work lubricates the wheels of corporate growth, change management, and leadership like no other external business advisers. Their actions can shape corporate performance, because they hold the keys to most of the world’s highest-paying management jobs by virtue of controlling access to them.

Collectively, executive recruiters network their way to millions of experienced managers around the world each year to identify the most promising candidates. Their judgment determines who deserves to be introduced to client hiring organizations.

The truth is, whether you’re building a company or your own senior management career, you can’t get anywhere in business without the headhunters.

| Read full article at Businessweek.com

About Heidrick & Struggles International, Inc.

2010 | Say hello to my little friends: Inflation and loss of purchasing power

Jose Ruiz — Sun, 06 Sep 2009 19:35:18 +0000

What can we expect in 2010 as we continue to see signs the economy is beginning to recover and expand? Uncertainty is gone. We’re certain it’s going to be a tough year but challenges will be different from those we encountered in 2009.
By Jose Ruiz

When 2009 began uncertainty filled the air and the economy paralyzed. It was like driving in dense fog. Trying to sort out what was around us, while we attempted to move forward with caution, hoping nothing would come out of nowhere and hit us. Swine flu did just that and it was not until June that the fog began to lift. We hit bottom, and it became evident that the recovery was going to take time and it was going to be tough.

Let’s take a broad look back at what happened from the perspective of Connie Consumer and Pete Producer. Back in 2006 Connie Consumer was flying high with a steady job, a house, retirement and investment accounts with values that were growing well beyond inflation. The Consumer family’s net worth was growing at a steady pace and they felt comfortable making major purchases. Pete Producer was doing very well struggling to keep up with demand. Pete and Producer Inc. hired more employees and made investments with an eye to the future. He needed to expand to not lose market share.

In 2008 Connie Consumer began to see her net worth slip as house prices began to drop. The foreclosure of her neighbor’s house put downward pressure on the price of her home and her investments were not performing well. The Consumer family is a responsible consumer so they began to hold back on some spending. Pete producer began to notice the Consumers where not spending as much as before and began to see his demand fizzle. Producer Inc. was already set for higher output. Pete producer made small adjustments but his inventory began to accumulate. Pete felt he had increased capacity too aggressively betting on the come and allowed his costs to get out of control. Towards the end of 2008 he had no choice and began to make cost adjustments and had to let some employees go.

By the start of 2009 Connie Consumer was facing a pay-cut and was uncertain about her own job. She could no longer count on the safety net of her home equity or her investment accounts. If she lost her job she would have a hard time making ends meet. The Consumer family hunkered down and increased their savings trying to spend only on the essentials. Pete Producer felt the pressure as his products stacked up in his warehouse. Producer Inc. had no choice and made deeper cost cuts, letting more people go and shutting down plants. Pete was in trouble. His costs were climbing and his product was not selling. Pete needed cash at a time when his bank reduced his credit line. He knew that increasing his prices would be suicide. In fact he had to provide discounts to empty his shelves. He accepted losses to guarantee cash flow.

At the end of June 2009 Connie felt a bit more secure at her job. Layoffs appeared to be over. The Consumer family was still dealing with lower pay because of the pay-cuts but they felt a bit more comfortable spending. Government programs had helped Pete reduce his inventory and Producer Inc. began to see demand come back.

So this is where we are today. Connie Consumer is cautious but spending. Pete Producer has his production lines working again. His reduced capacity is almost at its limit.

The uncertainty is gone but now comes a tricky recovery.

Pete Producer is seeing demand increase but he is very reluctant to increase capacity. His fear of loosing market share is outweighed by his fear of letting his costs get out of control. He will accept losing some customers to guarantee that he will stay afloat and profitable. Pete will grow at a very slow pace keeping a close eye on the Consumer family betting very little on the come.

Connie Consumer will probably get her full pay back by the end of the year. But her employer will be thinking along the same lines as Pete and will keep pay increases in check. In 2010 Connie will likely earn the same salary she did in 2008.

Now say hello to my little friends: inflation and loss of purchasing power.

2009 was a year characterized by the elimination of excess inventory and capacity (supply). When I talk about capacity it’s not only manufacturing capacity. Restaurants, dealerships and stores were closed, production lines were shut down. Overall, capacity to provide goods and services was reduced in reaction to a dramatic drop in demand. Prices remained mostly in check because supply outweighed demand.

Through the reminder of 2009 and 2010 demand will continue to grow at a slow pace. Supply and demand will even out and we will very likely see inflation levels above those that we saw in 2009.

Higher inflation levels and a virtual freeze in salaries equals a loss in purchasing power adding another element to the already strong argument of a slow recovery.

2010 will be a year of recovery. But a slow and difficult recovery as Connie Consumer and Pete Producer keep an eye on each other before taking any steps, both protecting their cash and taking nothing for granted.

Jose Ruiz is a Principal in Heidrick & Struggles’ Monterrey office. As an executive recruiter he has worked on executive search projects for multinational clients in technology, life sciences, industrial sectors and consumer markets.

About Heidrick & Struggles International, Inc.
The world’s premier provider of senior-level executive search and leadership consulting services. The firm’s executive recruiters and leadership experts operate from principal business centers in North America, Latin America, Europe and Asia Pacific. In Mexico, Heidrick & Struggles operates offices in Mexico City and Monterrey. For more information about Heidrick & Struggles please visit www.heidrick.com

Mexico: Positive signs continue

Jose Ruiz — Tue, 18 Aug 2009 22:56:05 +0000

By Jose J. Ruiz – Heidrick & Struggles

Monterrey, Mexico (August 18, 2009).- Positive signs continue to bring hope that an economic recovery, though a slow and long one, has arrived. There is an emphasis on slow and long.

The peso dropped against the dollar by 1.3 percent on Monday, the single biggest drop since May 11, before climbing back and positioning itself slightly below 13 pesos per dollar around noon today.

Concerns were awaken a few days back as Finance Secretary Agustin Carstens said Mexico faces the worst “fiscal shock” in 30 years because of declining oil production. This means there will be little money left to stimulate the economy. However, the biggest factor in Mexico’s economic recovery will continue to be consumer demand in the United States simply because Mexico sends more than 80% of its exports to the U.S.

“The United States was not only at the origin of the crisis, it is central to any world recovery,” said Olivier Blanchard, the chief economist of the International Monetary Fund.

At least for now, the positive signs in the U.S. continue.

Automotive Industry
GM has called back over 1300 union workers as the company prepares to boost production during the second half of the year. In Mexico, GM recently inaugurated a transmission plant in San Luis Potosi. This is a great sign for Mexico considering 21% of exports come from the automotive industry.

Blanchard believes the recovery has started but has cautioned it can’t be sustained by government programs such “Cash for Clunkers”. The private sector needs to be the engine of economic activity.

Demand still needs to recover and it will take years for it to reach pre-recession levels but having inventories drop enough to kick-start plants that had be shut down is a great step forward.

Housing and Construction in the United States
There are still many negative sides to the housing equation in the United States. Foreclosures will continue to be fed by many variable-rate loans that will reset between now and 2012 putting downward pressure on pricing but for the first time in many years renting is now more expensive than buying for those with a good credit rating and cash in the bank.

The amount of deals in the market has stopped the price slide in places like San Diego where the medium price of a home in July stood at $320,000, up from $316,250 in June but still below July 2008′s $364,000. Some builders like KB home expect to show year-over-year increases in sales for the current quarter.

U.S. housing starts declined by 1 per cent in July, ending a two-month winning streak but despite missing expectations, watchers viewed the housing data as a largely positive development. The drop can be attributed to apartments since construction of single-family homes rose by 1 per cent to the highest level since October 2008, for the fifth straight monthly increase.

It’s too early to pop the Champaign bottle but it appears that activity in both the construction and automotive industries may have stabilized to a degree.

Jose Ruiz is a Principal in Heidrick & Struggles’ Monterrey office. As an executive recruiter he has worked on executive search projects for multinational clients in industrial sectors and consumer markets. He can be reached at +52 (818) 8625-6521 or jruiz@heidrick.com

About Heidrick & Struggles International, Inc.
The world’s premier provider of senior-level executive search and leadership consulting services. The firm’s executive recruiters and leadership experts operate from principal business centers in North America, Latin America, Europe and Asia Pacific. In Mexico, Heidrick & Struggles operates offices in Mexico City and Monterrey. For more information about Heidrick & Struggles please visit www.heidrick.com

You own your business: It’s you – Treat yourself like one.

Jose Ruiz — Mon, 10 Aug 2009 20:03:21 +0000

You Corp.
Succeed by applying to your personal life and career the same principals that propel leading corporations.

by Jose Ruiz

The exact definition of business is a matter of debate. But without getting into much detail or controversy a business is a legally recognized organization designed to provide goods and/or services to consumers. Formed to earn profit that will increase the wealth of its stake holders and grow the business itself.

If you are reading this there is a high probability that you work, you are either an employee or an entrepreneur. It really does not matter. In the end, you do something (your product) and someone pays for it. People who surround you or depend on you such as your wife, kids, parents are affected by how you do it and what you get. They, along with you, are stake holders. I’m pretty sure that you and your stake holders have felt the need to increase your wealth. You are a business.

Working in executive search I speak to many managers and directors from Fortune 500 organizations. They are masters of business strategy and execution yet, most of the time, I get a strange look if not a blank stare when I ask how they have applied those concepts to their person and how they have used those concepts to get to where they are. I truly can’t say they got there by chance. But I’m also not sure it was always something that was planned and mapped out. There are moments in time which change the course of events, alter the paths of your career and change your professional life. Some are positive and some are negative and for most of us the majority of these events are unexpected.

When I ask people who have had successful careers what the secret is, the most common response is “hard work and perseverance”. Check! You won’t be successful without them. But I also know many people who have worked hard, been relentless and have fallen short of their goals. There are no guarantees that you will be successful and achieve all of your goals, but I bet you can increase your chances by applying the same business concepts great corporations use. You might already work for one and apply them everyday, you just might not be applying them to yourself.

Identify and understand your stakeholders
People who surround you or depend on you such as your wife, kids, parents are affected by how you do it and what you get. What are their needs today and what will they be tomorrow? Your needs and those of your other stakeholders should be your big objective.

Know, understand and develop your product/service
Know what makes you valuable and think about how your current job or activities will affect that value. In the end, your employer is your client. How many potential clients do you have? Be strategic. Everything you do should be part of the creation of a unique and valuable position. A good strategy may require you to make trade-offs – Your resources are limited. Choosing what not to do is just as important as choosing what to do.

Create and propel your personal brand
Yes, you are a brand. Distinguish yourself and make sure you never forget that perceptions matter. People remember you and what you are by what you do and what you reflect. Work on a positive brand.

Apply The Hedgehog Concept (Simplicity within the Three Circles)
Good-to-Great companies do what they can do best (as opposed to what they want to do best), what they are deeply passionate about, and they focus on what drives their economic engine.

Be effective: Plan and execute seamlessly
Know where you want to go, plan how you are going to get there and when. Be visionary. Spot trends but stay focused and constantly reassess everything.

Focus, document and measure relentlessly
Use a central score board and share it with your stakeholders. Goals slip when progress is not being measured…and measured against time. Set milestones at frequent intervals. When gaps occur, question what went wrong and apply corrective actions.

Be ruthless with resources and stay financially flexible
We live in a world of cycles. Recessions and economic crisis will happen and most likely a few times in our lifetime. Be prepared, don’t lose focus and be sustainable. Plan long term.

Don’t B.S. yourself
B.S. your clients or your stakeholders and it will have an impact on your personal brand. B.S. yourself and you will be on a direct path to failure. Believe your own B.S. and you are done.

Jose Ruizis a Principal in Heidrick & Struggles’ Monterrey office. As an executive recruiter he has worked on executive search projects for multinational clients in industrial sectors and consumer markets. He can be reached at +52 (818) 8625-6521 or jruiz@heidrick.com

The manufacturing sector is weak but it is getting better. Really.

Jose Ruiz — Thu, 06 Aug 2009 01:32:20 +0000

By Jose Ruiz

Monterrey, Mexico (August 5, 2009).- I’ve said it more than a few times: A full manufacturing recovery in Mexico will be slow and very dependant on the automobile industry which makes up 20 percent of Mexico’s industrial production and it looks like we are headed in the right direction.

Factory orders in the US rose in June for the fourth time in five months, an unexpected gain and the latest sign that the ailing manufacturing sector is recovering

Cash-for-clunkers, the program in the US that gives up to $4,500 in rebates for trading in old gasoline chugging cars for newer fuel-efficient vehicles has injected new life into the automotive industry. Almost 250,000 consumers have taken advantage of the program. This is not even close to a permanent solution, but it is certainly a life line for the automotive industry when it needs it the most. Dealerships had huge inventories going into the second half of the year when 2010 models start arriving. The program coupled with the automakers’ production cuts has slimed down inventories.

Dealers in the US have reported very slim inventories of the Jeep Patriot, Ford Focus, Fusion and Honda Civic. Some GM dealers are even reporting spot shortages of full size pick-ups.

This may not fix the overall demand issue but it has at least cleaned out the excess inventory of smaller models and given manufacturers a clean slate to plan production according to demand.

All of this is good news for Mexico’s automotive industry manufacturing facilities that supply parts and assemble small and compact vehicles.

Mexican Economy Shows Encouraging Signs of Recovery, But With Caveats

Jose Ruiz — Mon, 03 Aug 2009 19:47:05 +0000

By Jose Ruiz

Monterrey, Mexico (August 3, 2009).- Overall the free fall appears to have slowed but we are still falling. In the US the stabilization of consumer spending, unemployment benefits and the housing markets, a lessening of financial turmoil and increased government spending all suggest the longest recession since the 1930s may be close to ending.

In the U.S. Manufacturing shrank in July at the slowest pace in many months and factories moved closer to stabilization. In a Bloomberg News survey, The Institute for Supply Management’s factory gauge increased to 46.5, from 44.8 in June (readings less than 50 signal contraction).

Federal Reserve Chairman Alan Greenspan believes the worst is behind us, “collapse, I think, is now off the table…I’m pretty sure we’ve already seen the bottom… In fact, if you look at the weekly production figures for various different industries, it’s clear that we’ve turned, perhaps in the middle of last month, the middle of July.” Greenspan said.

U.S. Recovery will be the first step for a recovery in Mexico but other concerns are looming. A growing deficit and falling oil output may be sleeping monsters that can put added pressure on growth, the exchange rate and an already tricky inflation scenario.