Scenario:

An engineering company has, until recently, only supplied components to the agricultural and other general engineering industries. Products have been relatively simple with generous tolerances and customers who are sometimes willing to accept late deliveries. In a change of strategic direction, the company has decided to diversify into smaller volume but more lucrative business areas to add to their existing range and minimise risk with a wider customer base.

As part of this strategic change, the company has fully supported the Quality Manager during the last 12 months into achieving several specialist quality standards which now allows them to supply aerospace, medical and nuclear industries. Some of their manufacturing costs have increased considerably with some parts using higher value materials, several being manufactured to much tighter tolerances and a small number having to satisfy far more stringent standards, some of them safety and medically critical.

Question:

As part of their strategic decision to broaden their product base, the business had identified international trade as a new sector to build and develop.

1. Discuss the advantages and disadvantages of trading internationally and the challenges of winning new customers against international competition.

• You are to consider and explain the relevance and importance of different standards when applied across all manufacturing sectors not just in engineering.