Think your company is too small to join a big multinational's supply chain? Heads up: seems they need small companies as much as you need them.
"The reality is that larger corporations are looking to partner with small, specialized companies," says Andrew Richardson, President of fast-growing Targray Technology International Inc., a single source supplier of raw materials to the photovoltaic and solar cell industries.
"Smaller companies have the niche products, fast turnaround times and close customer relationships that multinationals need to stay innovative and competitive."
With the U.S. economy recovering slowly, a growing number of smaller Canadian companies are tapping into global supply chains as a way to expand sales, particularly in emerging markets such as India, China and Brazil.
"We're seeing double-digit growth in some of these emerging economies because of economic development and a rising middle class," says Jérôme Nycz, Vice President, Strategy & Enterprise Risk Management at the Business Development Bank of Canada (BDC).
"This represents a tremendous growth opportunity for Canadian firms."
Planning is paramount: Companies need a well thought-out plan that assesses your capabilities and how they contribute to building a resilient and flexible supply chain. Treat supply chain management as a core element of your business strategy, adopting best practices and developing the requisite skills in your organization.
As part of your planning, expect to share more risk and more responsibility with your supply chain partners, such as accepting longer payment terms or sharing the research and development costs.
Targray's Richardson says his company has faced increased competition from local suppliers with warehouses near their customer. They speak the language and understand the business culture in that market.
"If you're going to be a successful supplier to that marketplace you have to follow your customers to that emerging market," says Richardson, whose company has 19 offices in 15 countries, including Mexico, China, India and Europe.
Open your books: Transparency is becoming the new norm in global supply chains. Be prepared to provide financial statements, a breakdown of your costing and details on your suppliers.
Protect your interests: All companies are vulnerable when customers fail to pay their bills. To protect your firm, Richardson says companies should have their receivables insured and use letters of credit-a standard instrument for international trade transactions to ensure exporters get paid what they're promised.
Seek advice: Before going global, take the time to prepare yourself by getting advice from experienced, knowledgeable sources in Canada. This can ease the often arduous tasks of getting started, making connections and understanding laws and regulations in other countries.
