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Going global: a route to growth for MTO manufacturers

Like any manufacturer pushing for growth, make-to-order (MTO) manufacturers will explore a variety of avenues. In addition to finding more efficient ways to manufacture custom products, and striving to optimize the customer experience, MTO manufacturers may also look to expand their business overseas.

As well as being a route to increasing market share and revenues, pursuing a globalization strategy can, of course, ramp up the competitive pressure. Moving into a new geographic region pits you against local and international competitors on both price and quality. Logistics and warehousing can become a challenge when you ship products further afield. You'll also need to be sure you understand—and can comply with—the regulations that apply to each local market.

Depending on which overseas markets you target, you may have to contend with language and cultural issues, as well as local tariffs and taxes. And if you're implementing local production facilities, you'll need a way to integrate those people and processes into your core business.

Reaping the rewards of globalization

The above may sound like a daunting list of challenges, but it doesn't have to be. Researching the regulations and standards that apply to your products in each region will enable you to make any required adjustments to your manufacturing process—and to your quotes and estimates, if raw material costs, and therefore margins, will be affected.

For example, if the sheet metal you use in your home market doesn't meet the standards in a new market, you'll need to source one that does comply. If that puts up the cost or has implications for the shop floor, you'll need to take those into account when you quote for the finished goods. Similarly, you'll need to take account of additional shipping time when providing delivery dates to your overseas customers.

Rolling out the right technology will also go a long way to supporting a globalization initiative. A manufacturing-specific enterprise resource planning (ERP) solution can help you build accurate quotes—and so control profitability—by capturing the costs of market-specific raw materials. It will provide a global level of visibility that covers both your supply and demand chains. And it will help to bring dispersed teams together by integrating data and making it available across the business to anyone who needs it. Ideally, it will support multiple languages, too.

You'll also find it easier to comply with quality and other standards and keep track of applicable taxes and tariffs, if you choose an ERP system that offers strong financials; the ability to manage product variations; and the visibility that enables you to quickly identify and fix quality issues during production.

Discover more

Find out how Epicor ERP (now known as Kinetic) helps SHL Group streamline manufacturing operations across three continents, maintain its reputation for product quality, and enable data sharing and communication across the multilingual enterprise.

To learn how digital transformation is informing the future of MTO manufacturing, click through to the next blog in this series.

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