1. Larry Butz GEA Consulting LaCrescent, MN

2. Agenda Why Manufacture Overseas Types of Manufacturers Finding a Manufacturer What to Expect Evaluate the Differences Risks “Insourcing” Advantages

3. Larry Butz President and Founder GEA Consulting 20 years with Trane specializing in – Product Development –Technology & Product Globalization –Technology Transfer & Factory Start-up –Environmental Sciences Five Years as Engineering Manager in France

4. Why Manufacture Overseas? Lower Cost Product Access to Overseas Markets

5. What to Expect Lower labor costs Lower raw material prices Lower component/sub- assemblies costs Range of quality levels available Fewer constraints (regulations) on factories

6. Where to Manufacture? Forbes Top Ten for Outsourcing India China Malaysia Czech Republic Singapore Philippines Brazil Canada Poland Chile

7. Types of Manufacturers State Companies Wholly Owned Locally Joint Ventures Wholly owned Foreign Your Own – Build or Buy

8. How to Find Government Agencies Industry Directories Web Bidding Networking Shows & Exhibitions

9. Be Prepared for Change Longer Pipeline Reduced Flexibility Change Control Cultural Differences Societal Value Systems Language Business Customs National Laws

10. Be Prepared For Change More Administrative Personnel Logistics - Import/Export Banking/LC/Currency International Law Communication Time Difference Language

11. Product Modifications The relative cost of equipment vs. labor is significantly different. Expensive labor saving equipment used in the US may not be the best choice overseas. Be prepared to make minor changes in your design specifications to obtain best results.

12. Evaluate the Differences Location Legal/Patent Language Cultural Resources Political System Logistics Taxes Laws Safety Standards Currency Infrastructure Environmental Business Customs

13. Risks Currency Variations Proprietary Design Info Political Stability Hidden Costs

14. Packaging Communications Import/Export Taxes Waste/Shipping Damage Legal Product Redesign Administrative Personnel

15. Do Your Customers Care……??? Where your product is made? What the working conditions are? Environmental impact? Does “Made in America” have value to your customers? Today? Tomorrow?

16. Advantages of “Insourcing” Quicker Response Times Flexibility (“Specials”) Customer Visits to Factory Proximity – Designers & Manufacturing

17. Opportunities to Grow Customer Intimacy Emerging Customer Needs New Products Service your Product Partnerships

18. Thank You for Your Time Larry Butz GEA Consulting, Inc 2420 N. Pine Creek Rd. LaCrescent, MN 55947 Tel: 1-507-895-6826 Fax: 1-507-895-4001 Email: LButz@gea-consulting.com www.gea-consulting.com