Globalization isn't just a big corporation game anymore. Whether you employ 50,000 or 50, the market potential for your product or service is no longer limited to Canada or the United States.

Many companies are looking beyond their traditional markets and discovering new opportunities – and profits – by focusing on what they do best, and by bringing value to global supply chains. This could include outsourcing manufacturing to countries with a lower cost base, while focusing your core operations on high-value components such as innovation and design.

Unfortunately, too many small companies stick with the status quo, and that's a very vulnerable place to be, warns Jean-René Halde, president of the Business Development Bank (BDC) of Canada.

"To think you can carry on business as usual in today's global marketplace is a very large assumption to make. Small companies no longer have a choice – they have to start paying attention to supply chain opportunities," he says.

Often, the biggest hurdle entrepreneurs face is their own lack of comprehension about the current status of their market and the changes taking place in that market, adds Halde. The first and most difficult step is taking time to explore the opportunities. It's important to know where you stand when it comes to global supply chains.

"Understand what you're trying to achieve, know where you're weak, where you're strong and then figure out how you can be better at what you do," he explains.

Looking beyond Canada
Not all companies start out with an international focus. AGF Steel Inc. has spent most of its 60-year history focusing exclusively on the Canadian market. The company, which has operations in three Provinces, became globally renowned as a designer and installer of reinforced steel from decades of working on large infrastructure projects in Canada, including the St. Lawrence Seaway and Hibernia. It is now exporting that know-how to the Middle East and other regions of the world.

AGF began purchasing reinforced steel and welded wire mesh materials from international suppliers just a decade ago. Those suppliers may be from Turkey, China or Brazil – depending on the nature of the job, the quantity of materials required, terms of payment and the price.

"Our suppliers change all the time. It's a never ending journey for us," says Serge Gendron, president of AGF, which has operations in Dubai, Abu Dhabi and the Caribbean.

Sourcing materials from global suppliers didn't come naturally at first for AGF. Gendron says there was concern within his own company, and among their customers, that anything fabricated outside of Canada would be of inferior quality.

"And that's just not the case," he explains. "Not only could the price be interesting, but sometimes the quality is even better."

Be aware of the challenges
While there are more opportunities than ever for small businesses to take advantage of global supply chains, competition is fierce and they need to keep close tabs on what other companies are doing. Large corporations, for example, routinely source globally, so businesses should expect to compete not only on price, but quality and reliability of delivery as well as design and engineering. Delays in shipping, substandard materials or glitches with IT can lead to higher costs and tarnish your reputation with your customers.

"If you're doing business on an extended basis around the world, it's important to be able to manage the quality of your suppliers," says Jayson Myers, president of the Canadian Manufacturers and Exporters.

Similarly, it's critical to always know where your company fits within a supply chain. It's not enough to have current information on your customers and suppliers, but on their customers and suppliers as well. If one link in the chain changes, it could have a devastating ripple effect on your business.

Flexibility is the name of the game when it comes to supply chains. The global economy is constantly in flux, which puts pressure on companies to respond quickly when circumstances change. China may be one of the hottest outsourcing markets for now, but that could change as a result of high fuel costs, a strengthening Chinese currency, rising wages and the removal of some export tax credits.

"Companies that are operating on a global basis have to remain very flexible and manage these changes on an ongoing basis," says Myers. "There's no silver bullet for companies that think they're going to reduce costs simply by outsourcing to China."

Those changes could also mean moving operations to another country. Increasingly, large corporations are demanding that their suppliers move with them when they open new production facilities abroad.

Lastly, Myers recommends changing how you view and market your company – from one that provides a specific product or service to one that delivers solutions. "The core value of your product may not be the product itself, but the technology, knowledge or service that is embodied in your product. You don't want to outsource the core value of your business to other companies. I see that mistake a lot."