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Managing Risk in Mexico How to Maintain Profitable Operations through Risk Management. Celestica In Mexico. Benefits of Mexico Operations Proximity to US market Low cost of labour Low ship-to-market costs Close to our customers Monterrey is one of our mega-sites (5000+ employees).
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Managing Risk in MexicoHow to Maintain Profitable Operations through Risk Management
Celestica In Mexico • Benefits of Mexico Operations • Proximity to US market • Low cost of labour • Low ship-to-market costs • Close to our customers • Monterrey is one of our mega-sites (5000+ employees)
Celestica In Mexico • Challenges of Mexico Operations (Macro) • “Failed State” issues regarding law, authority & enforcement • Trans-national criminal activities (cartel operations) • Local gang activity • Difficult to develop liaison with local or State level officials
Celestica In Mexico • Challenges of Mexico Operations (Site Level) • Providing positive, supportive work environment • Building loyalty and trust among all levels of staff • Retaining employees in a ‘contract’ environment • Knowing who we can trust outside our walls
Celestica In Mexico • Business Conduct Guidelines & Guiding Principles • In 2010: We expanded the scope of our training program to include all full-time employees • On an annual basis, employees certify to BCG training • Our BCG includes a resources section for reporting (anonymous, by phone, online, through management, etc.) • The centralized reporting program has been strengthened so that corporate office receives all allegations or issues, nothing can be ‘buried’, or perceived to be buried at the site level • We demand immediate and measured investigation and follow-up on all allegations. This action is crucial to demonstrate commitment. (substantiation is essential)
Celestica In Mexico • How we reduce loss / exposure • Reduced physical security costs (over long term) • Increase levels of guard training (more with less) • Cash incentives for strong performance • Smart physical security design to reduce likelihood of theft (must be part of the solution) • Need to provide employees with options for strong behaviour and eliminate the ability for outside influence through design and business controls
Celestica In Mexico • Going Forward • Estimate that before holistic approach; total spend, including loss, was approx. $200k above today’s spend. • Most of the current spend is proactive and we are hopeful that the development of greater employee engagement will allow us to further reduce exposure • High risk environments are never easy and issues are always in flux • Developing a proactive, soft program can reduce the reliance on traditional security programs • Finding the right balance is a challenge worth pursuing for all the right reasons.