When people think of medical device manufacturing, places like Boston or Minneapolis might come to mind. But did you know that one of the most impressive success stories in the industry has unfolded just across the US-Mexico border in Tijuana?
Today, I want to share the remarkable journey of DJO Global (now part of Enovis), a company that transformed a modest initial operation into an award-winning manufacturing powerhouse that outperformed expectations and challenged conventional wisdom about nearshore manufacturing.
Humble Beginnings to Manufacturing Excellence
Back in the mid-1990s, DJO Global dipped its toes into Tijuana manufacturing with just 20 employees managing three product SKUs. Fast forward to the 2010s, and that same operation had expanded to employ over 2,000 people handling more than 11,000 SKUs! That’s not just growth; that’s transformation.
What started as perhaps an experiment became the cornerstone of DJO’s global manufacturing strategy. The turning point came in 2002 when new management made the bold move to relocate approximately 250 jobs (about 30% of its Vista, California workforce) to Tijuana. By 2004, they had consolidated three separate facilities into a single 200,000 square foot state-of-the-art plant in El Florido Industrial Park.
Beyond Cost Savings: The Strategic Advantage of Tijuana
Here’s where the story gets interesting. While many companies initially look to Mexico simply for cost savings, DJO recognized that Tijuana offered much more. Yes, the labor cost advantages were significant, but the real game-changer was the total value proposition.
Being just minutes from their Vista, California headquarters meant products could reach US distribution channels within hours, not the weeks required for shipments from Asia. This proximity enabled DJO to slash lead times by an astounding 80% and reduce inventory levels from 84 days to just 14 days. In today’s world of supply chain disruptions, that kind of agility is worth its weight in gold!
But Tijuana offered more than just location. The city has evolved into what’s often called the “Medical Device Cluster” of North America, home to over 44 major manufacturers including industry giants like Medtronic and Cardinal Health. This concentration created a rich ecosystem of suppliers, specialized service providers, and crucially skilled workers.
“The DJO Way”: Excellence Knows No Borders
What truly sets the DJO story apart is how they implemented their operational philosophy – “The DJO Way” – with remarkable success in Tijuana. This wasn’t a watered-down version of their standards; it was the full implementation of sophisticated continuous improvement methodologies including Kaizen, Value Stream Mapping, Six Sigma, and more.
The results? The Tijuana facility achieved the highest productivity rates and lowest parts-per-million defect rates among all six of DJO’s global manufacturing locations. These weren’t just internal metrics, the facility earned prestigious recognition including the Association for Manufacturing Excellence (AME) Manufacturing Excellence Award, a spot among IndustryWeek’s Top 10 manufacturing plants in North America, and the coveted Shingo Prize for Operational Excellence.
Investing in People, Reaping the Rewards
Another key to DJO’s success was understanding that their workforce wasn’t just a cost center, it was a strategic asset. The company consistently ranked among the top three “Best Places to Work” in Mexico, implementing innovative programs like on-site markets where employees could purchase groceries at discounted prices and educational support programs.
These investments in people paid dividends in terms of productivity, quality, and stability. The success challenged outdated perceptions of maquiladoras as merely “sweatshops” focused solely on low-cost, low-skill labor.
The Reshoring Decision: From Asia to Tijuana
Perhaps one of the most telling chapters in DJO’s story was their decision around 2010 to “reshore” significant production from Asia to Tijuana. After a comprehensive analysis that went beyond simple labor costs to consider total cost and operational effectiveness, DJO determined that Tijuana offered superior value.
The benefits were multifaceted: dramatically reduced lead times, lower logistics costs, decreased inventory costs, stronger IP protection, and accelerated new product development through closer integration with US-based R&D teams.
Lessons for Other Manufacturers
DJO’s Tijuana success story offers valuable insights for other companies considering their manufacturing strategy:
- Look beyond labor costs: Evaluate the total cost of ownership, including logistics, inventory, quality impacts, and agility.
- Nearshoring can handle complexity: High-mix, high-quality manufacturing that requires stringent controls can thrive in locations like Tijuana.
- Invest in your workforce: Treating employees as strategic assets rather than cost centers pays off in performance, quality, and stability.
- Leverage cluster effects: Establishing operations within existing industrial clusters provides access to specialized talent, suppliers, and knowledge networks.
The Bigger Picture
DJO Global’s experience demonstrates that successful nearshoring isn’t simply about relocation but requires strategic alignment across operations, supply chain design, and human capital management. Their Tijuana facility didn’t succeed despite being in Mexico, it succeeded in large part because of the unique advantages Tijuana offered.
As companies worldwide reassess their supply chains in search of resilience and agility, the DJO Global story serves as a powerful example of how nearshoring, when executed with strategic vision and operational discipline, can deliver world-class results.
This post is part of our ongoing series highlighting Tijuana Success Stories. Stay tuned for more profiles of companies that have leveraged Tijuana’s unique advantages to build truly world-class operations.
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