The pros and cons of doing business in emerging markets

While doing business in emerging markets offers many rewards, it also poses risks. Manufacturing Business Technology recently spoke with Mike Novels, CEO of Preactor, a supplier of supply chain planning and scheduling solutions, about this trend.

MBT: Preactor has experienced success in the so-called BRIC countries (Brazil, Russia, India, China) in recent years—with nearly 200 customers in Brazil alone—what advice to you have for manufacturers wishing to increase their presence in emerging markets?

Novels: The key working in these countries is working with local partners who understand the local language and local culture.

MBT: In which emerging markets do you see the most demand for advanced planning and scheduling solutions like those Preactor offers?

Novels: There has been a considerable level of adoption in Brazil, where we have more than 170 accounts. However we’ve had a very active partner there for 10 years—whereas we’ve only just penetrated the Russian and Chinese markets in the last two years. We’re also developing a healthy market in India.

China has been the more difficult market to penetrate. Of our 30 accounts there, most are U.S. or European companies who have plants there.

MBT: Planning and scheduling applications are generally considered more specialized solutions used by companies that already have established business processes supported by ERP systems. Have companies in emerging markets reached a level of maturity that allows them to fully take advantage of APS technology?

Novels: That varies enormously from one market to the next. Companies in the Indian sub-continent—especially in Sri Lanka for example—are up to date with enterprise software such as ERP and they recognize like so many companies around the world that ERP does not offer detailed scheduling functionality. The same can be said of Brazil.

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