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Elettra Technology Inc., the group that took over Westinghouse's electric motor business when the Hamilton plant closed in 1995. (Moe Doiron/The Globe and Mail/Moe Doiron/The Globe and Mail)
Elettra Technology Inc., the group that took over Westinghouse's electric motor business when the Hamilton plant closed in 1995. (Moe Doiron/The Globe and Mail/Moe Doiron/The Globe and Mail)

The global supply chain becomes a two-way street Add to ...

Just a few years ago, Mold-Masters Ltd. believed it should create all of its own components.

Now, the Georgetown, Ont., company buys parts for its products from anywhere in the world where the quality and price are right.

"We used to always default to 'We'll make it,' " said Bruce Catoen, chief technology officer of the company, which builds injection moulding machinery used by global makers of plastic parts. "Now we say, 'Is there any place we can buy it before we make it?' "

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Mold-Masters is willing to look to countries it might have avoided in the past. "We used to be worried about supply-chain quality from some of the developing countries, but we're finding that their quality, service and deliveries are outstanding. The capabilities in places like India and China and Eastern Europe have come up to speed very quickly."

The company adds intellectual value to these purchased components in its Canadian plants (and its other plants in Brazil, China, Germany, Japan and the United States), then becomes a supplier to clients who are slightly further down the supply chain - manufacturers in more than 40 countries around the world.

Emphasizing the innovation in its products means customers are not merely focused on the price of the equipment - a crucial factor at a time when costs have been driven up by the high Canadian dollar.

Mold-Masters' global presence is also increasingly helpful, because many multinational clients are looking for suppliers with international connections and capabilities. "That's positioned us very well because we're one of only two truly global suppliers [of injection moulding equipment]" The other happens to be just 35 kilometres down the road - Husky Injection Molding Systems Ltd. in Bolton, Ont.

This kind of international outlook is going to be increasingly crucial to Canadian manufacturers who want to take their place in the global supply chain. To grow, Canadian firms must "embrace the fact that we have a global economy," and move outside the comfort zone of their own language and culture, Mr. Catoen said. At the very least, manufacturers in this county must extend their horizons to other countries in the same time zone - such as Brazil or other Latin American countries.

Mold-Masters sees its dual presence in some countries - both as a buyer of products and a supplier of equipment to customers - as symbiotic. In countries where the firm has a manufacturing or sales operation, it can be used as a "beachhead" to access the local supply chain.

Indeed, most companies now see globalization as a "two-way street," according to a recent report from SCM World, a professional organization for supply-chain executives. In a survey of 750 executives, the organization found that about 80 per cent are selling or shipping to emerging markets, in addition to sourcing parts and equipment from these markets.

"What seems increasingly clear is that the globalization of [the]supply chain is a matter of building physical networks and relationships that are equally capable of finding and exploiting cost advantages, as well as discovering and serving new markets," the report said.

The report ranks Canada ninth as a source of parts or materials to other countries' supply chains. The top three suppliers were China, the United States and Germany.

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