Company: The Synergetic/M2M Group
Location: Wallaceburg, Ontario, Canada
Contact: Mark Nowakowski
Title: VP Business Development
April 2006
CFOsources Inc. had visited many Canadian manufacturing companies during 2005 but one Canadian company caught our attention. Located in Wallaceburg, Ontario M2M Group is a 35 million Cdn a year international operation that supplies plastic components and the tools used to make them. If one walked by their head office one would never guess this company is one of the most innovative medium sized businesses in Ontario when it comes to international business and outsourcing. We have to give M2M Group credit for summing up the new international business reality for manufacturers "Designed in India, Made in China & Delivered to the USA".
M2M does not only outsource to Asia it generates revenue from Asian markets. M2M Group's Asian marketing strategy is a case study of how to do business in Asia that most likely is not taught at MBA schools. Patience, loyalty, collaboration. Virtues that are not entirely congruent with North American individualism.
M2M Group is part of an emerging breed of innovative Canadian manufacturers that co-ordinates its product design, manufacturing and assembly and then final delivery of the product across several Asian countries. It provides flexibility and a quick response to changing market conditions such as the high Canadian dollar.
In Canada we tend to shun business outside of North America, it is clearly evident by the percentage of our exports that go to the US. Other high cost centers such as Japan, Taiwan and South Korea have engaged Asia. Japanese don't speak Chinese neither do Koreans but they are in the market and are doing well.
Taiwan, Japan, Korea all have budget surpluses with China because they focus on quality and provide high end goods to meet demand in China. We see M2M Group as an illustration of a strategy that can work for many Canadian manufacturers. A focus on quality.
We sat down with Mark Nowakowski, VP Business Development in the summer of 2005 and again in 2006: here is what he had to say.
Can you tell us a little about the M2M corporate structure and its international operations?
M2M Group's services are provided to the globe and from locations all around the globe. Our Headquarters are in Wallaceburg, Ontario, Canada ( Appox. one hour from Detroit) which houses our corporate offices and full mold making and molding facilities. Product engineering and design services are the strongest in Canada and Chennai, India, these operations are supported in China, Korea, Japan and Australia. Mold making and mold support & maintenance facilities are located throughout India, China, Malaysia, Taiwan, Japan, Germany, France, Italy, Mexico, Canada and the United States. Project management and integration of all services are managed in the best location relative to the project needs. The product is designed where it fits best, manufactured where it fits best and assembled in the most convenient location with local support available for final delivery at the production location. We call it best-shore design and tooling. Often, mold components are manufactured at separate locations and brought together in order to combine the best economy with the best skill requirements.
When did M2M International enter the Asian market?
M2M met with Ikegami Mold & Engineering of Japan in 1987. A Japanese-style relationship ensued taking 5 years to develop the first real business. Business taken on together was mold making and molding between Japan and the USA. The Japanese-style of establishing relationships is upheld as much as possible to this day with companies around the globe, it is modified as required to suit the local culture. Ikegami has 5 locations in Japan around the Nagoya area. In 1998, Ikegami introduced M2M to a company in Korea and the first leading competitive country (LCC) manufacturing location was born for M2M. The Korean company realized increasing labour rates and opened a tooling facility near Shanghai, China. In 1999 Synergetic was formed in Michigan as a joint venture with Bharath Reddy, an East Indian citizen. This company was formed to manage the projects throughout this business model of design and manufacture at disparate locations.
How does your company lower costs for your clients?
North American Project cost targets were met by using the lower cost production in Asian countries long before it became a forced prerequisite to doing business with North American automotive companies. We were blazing the trail and realizing savings for our customers. Blazing a trail takes resources and blending cultures remains a major challenge. M2M continues to accept the challenge on a daily basis. Profitability for M2M was initially minimized or eliminated by the lessons being learned, but it was an important investment for future competitive survival. Every year improvements were made and some profitability established. Systems are continuously being improved to further reduce costs and attempt to maintain profitability. We like the job we are doing, we are good at it and we are getting better.
Can you tell us a little about your IT strategy and how you manage an International Operation like this?
All project information is entered, stored and tracked from a database physically located in Canada and accessed around the globe. Development for websites, data access and storage is done in our Indian facilities. It is important that all parts of the group can access common information handily and efficiently so we can keep our management costs low. For business done in LCC’s, logistic and management costs frequently remove a competitive edge so it is important for us to work on the management constantly reducing cost and making projects more efficient.