But you gotta know the territory! The mantra of the traveling salesmen in "The Music Man" is especially true for machine builders venturing out to find and serve new users in international markets.
Just as machine builders know their own strengths and the needs of long-time customers, they must become equally familiar with the requirements, business practices and standards of potential users in new countries. Very logical, but international markets and regions require a lot to be learned quickly — and sometimes builders must redesign equipment to meet these new demands.
Still, the rewards can be huge for builders willing to venture outside their comfort zone. To get over these high organizational and logistical hurdles and steep learning curves, many builders go beyond simply shipping to new countries, and instead develop innovative partnership arrangements with counterparts in other nations, while others coordinate efforts among their subsidiaries in multiple locations worldwide.
When You Gotta Go
"We started a division in Hong Kong in 2007 because our customers in the automotive, medical device and consumer product industries had set up manufacturing facilities there, and they said we needed a presence there, too," says Steve Smith, Midwest sales engineer for Lanco Assembly Systems, a system integrator and machine builder in Westbrook, Maine. "So, even though it was more expensive, we opened our design and build facility all at once in Hong Kong because it's what our customers required."
Likewise, 20-year-old Invotec Engineering, an integrator and builder in Miamisburg, Ohio, grew up serving users in North America, but started offering its custom medical device assembly, test and inspection systems and related services internationally in 2005–06 (Figure 1).
"Our customers needed our equipment in their facilities outside the U.S., mostly in Mexico, some in Europe and a little in China," says David Barton, Invotec's business development manager. "A customer will tell us what they want, such as a manufacturing system for a newly developed surgical device, and we'll design and build it in-house. But then we'll bring in their engineers and line operators from Mexico, for example, and they'll train with us and validate their new system at our facility. After that's done, we ship the system to them. We also travel to their facilities to get new systems up to speed, and we make some service trips."Many Partnerships, Some Friendships
What do you do if you can't just ship machines, but you also don't have the funds to open a sales and service office? There are a number of partnerships that you can set up to develop local contacts, complete sales, offer support, maintenance and repair, and even perform assembly and component manufacturing.
Consider the approach of Edgewater Automation in St. Joseph, Mich., which designs and builds custom automation equipment for automotive, battery, solar, medical, test and measurement, and other applications. About a year after it started up 11 years ago, Edgewater formed a strategic alliance with Manders Group, which consists of eight financially independent, but technically complementary companies located in the U.S., the Netherlands, Germany, France, Romania and India, each designing and building custom integrated automation systems.
"If we build and send a machine to Europe, our members there will support us with standards compliance and maintenance," explains Seth Vander Ark, business development manager at Edgewater. "If one of them builds and sends a machine to the U.S., we'll help support them and their users here. Penta Automation in India joined us five or six years ago, and now we outsource to them, and they build components for us, such as tooling devices and fixtures. Sometimes we make components for them when materials are cheaper here. We're all still independent, but we've also become good friends over the years."
To help builders learn about and form their own partnerships, several trade associations offer practical assistance and meeting places where they can meet potential, international customers. For example, the Assn. for Manufacturing Technology (AMT) has established incubators with technology centers, showrooms and support services for builders and users in Shanghai, China; Chennai, India; and Monterrey, Mexico, says Jeff Travers, business development manager. "We say that builders have to be competitive at their customer's doorstep, and this program is one way they can compete and grow globally," he states.
Naturally, as some partnerships deepen over time, their participants might evolve and merge to become unified corporations. However, despite their size and strength, they still face the same unremitting economic forces, organizational juggling and customer demands as the rookies do.
Fori Automation in Shelby Township, Mich., builds automation, assembly, welding and testing systems, automated guided vehicles (AGVs) for aircraft assembly, and related equipment. And, since it was established in the U.S. in 1984, it's added divisions in South Korea, Brazil, Germany, China, India, Mexico and Tennessee. It grew internationally by first working through representative organizations, later hiring its initial sales representatives as Fori employees, and eventually building design and manufacturing facilities in its new countries, explains Paul Meloche, Fori's vice president of sales.