Five provincial leaders share their perspectives on what is driving Canada’s hottest manufacturing market
By Will Stanley & Derek Lothian.
Manitoba and manufacturing: They go together like Churchill and polar bears.
For the past century, the sector has been at the heart of Manitoba’s economic engine, from the early days of farm machinery and aeronautics to the latest progressions in advanced materials and value-added food production.
Today, the industry generates $17.4 billion in annual sales, and comprises 10 per cent of the entire provincial workforce. Manufacturing companies, meanwhile, remit an estimated $3.2 billion in wages to employees each year.
These are more than just numbers. They tell the story of a sector at the forefront of global competition, innovation, and technological change.
But it didn’t get that way by accident. Much of the recent prosperity can be attributed to purposeful diversification — in product, and in customer.
Since 2007, manufacturers in the Keystone Province have weathered dramatic swings in currency and commodity prices to expand at a steady rate of 6.4 per cent, more than double the national pace. Unlike other Prairie jurisdictions, however, where roughly 70 per cent of total output stems from non-durable goods, Manitoba’s manufacturing base is anchored by a virtual even split between durable and non-durable goods production. Agricultural implements and transportation equipment alone account for nearly $4 billion in revenue.
Export destinations are shifting, too. More than half of everything made in Manitoba eventually finds its way to outside markets — increasingly to Asian countries, such as China, Japan, and Hong Kong.
Few can argue, though, the real difference-maker has been the people behind the products and processes. Decades of entrepreneurial will and old-fashioned hard work have carved out a unique niche for manufacturing in the regional landscape.
To discover how this powerhouse culture has developed, and what the next 20 years have in-store, Prairie Manufacturer Magazine caught up with five of those influential leaders for an in-depth dialogue on Manitoba’s roadmap to success.
Hon. Cliff Cullen
Minister of Growth, Enterprise, and Trade, Government of Manitoba
Meet the man in charge of growing Manitoba’s manufacturing economy. Although Hon. Cliff Cullen has yet to be on the job for a full year, the new Minister of Growth, Enterprise, and Trade has already earned a reputation as one of the province’s most vocal cheerleaders.
It is a role he embraces on behalf of his fellow policymakers.
“It’s our job as government to shine a light on the good things that are happening in our province,” says Cullen. “People don’t always recognize the substantial impact manufacturing has in Manitoba. It is about 10 per cent of our gross domestic product. We don’t always go out and sing our own praises, but hopefully you will be hearing more of that from our government moving forward.”
As of late, the good news stories have been aplenty.
Just this past January, French food processor Roquette unveiled plans for a new, $400 million pea protein manufacturing facility in Portage la Prairie, an hour west of Winnipeg — a project expected to create up to 150 full-time jobs once construction is completed. Forty other communities are said to have been in the running for the investment.
“We have a very low electricity rate in Manitoba, we have a quality and stable workforce, but what really closed the deal was the positive business environment,” says Cullen. “That’s the message we’ve been trying to deliver over the past nine months.”
Trade has been high on the political agenda as well.
Premier Brian Pallister swept into office on the promise of reducing barriers to the flow of goods and services, which included joining Saskatchewan, Alberta, and British Columbia as signatories to the New West Partnership Trade Agreement, and taking an aggressive stance on the renegotiation of Canada’s internal trade pact.
Next on the docket is cutting through unnecessary or duplicative regulation.
“Formulating a red tape reduction strategy is another foundational thing we are taking on,” adds Cullen. “This is about instituting a framework for having a conversation with all Manitobans on how we go about it and remove barriers to allow businesses to thrive.”
Rick Duha
Managing Director, The Duha Group
There are a handful of Manitoba surnames as synonymous with manufacturing as Duha.
What started as a family-owned, home-based printing press in the 1940s, The Duha Group has evolved into a global pioneer in the production of colour marketing tools, with operations in nine countries on four continents.
While a lot has changed in the past seven decades, third-generation owner and Managing Director Rick Duha credits a chance phone call 15 years ago with fundamentally altering the company’s ethos.
“We were in the very first lean consortium formed in Manitoba through Canadian Manufacturers & Exporters,” explains Duha. “And I remember vividly the call. At the time, I didn’t really know what lean was, but the gentleman on the other line said the government would pay our way for the first year, so that was ‘lean enough’ for me.”
The rest, they say, is history.
Within a couple years, the company graduated its own lean-certified Master Black Belt and eventually spun that core expertise off into a separate operating division dedicated to lean training.
Many other Manitoba manufacturers followed suit. Duha believes that early-stage adoption has fostered a distinct agility, allowing the province to stay ahead of its competition.
“The other day I was in a local supermarket and I could see one of their departments was using our huddle boards,” he says. “We have never trained anyone at that supermarket before. So, what that means is the knowledge is migrating, and lean thinking is becoming part of the culture here more than perhaps it is elsewhere.”
At Duha, lean permeates throughout every facet of the business, and is palpable in every decision made. In many respects, it charts the day-to-day action plan for how small, incremental innovations can be scaled up, marrying continuous improvement principles and workforce strengths to craft and apply breakthrough ideas.
And, in an age where the propensity for embracing new concepts and technologies must be elastic, Duha contends the time is right to double-down on lean methodology.
“Anyone who has succeeded in Manitoba has a ‘secret sauce’ somewhere. They have a market speciality, they have found something there’s a market for, they have found a unique product they can produce in a unique way here, and that starts their journey. Once that journey begins, you look for anything to stay on top of that game. Some of it is industrial research and development, some of it is adopting new technologies, and some of it is investing in human capital. Lean is part of it all. You look for any advantage you can find and exploit the hell out of it.”
Mariette Mulaire
President & CEO, World Trade Centre Winnipeg
Duha has a straightforward philosophy when it comes to international business development: “If we can get clients to visit, they’re clients for life.”
Granted, Winnipeg in February isn’t always the easiest sell. But that’s why Manitoba has advocates like Mariette Mulaire.
Mulaire is the chief executive of World Trade Centre (WTC) Winnipeg — an independent export development organization belonging to a network of 330 trade facilitators in 90-plus countries. Similar to Duha, she prefers to “invite the world” to Manitoba, opposed to relying on costly outbound foreign trade missions.
“Having the world come to us can’t be understated as a strategy,” Mulaire maintains. “If they get on a plane and come here, we know they’re serious. It also removes a lot of the risk for businesses here; and either confirms they are export-ready or shows them how unprepared they still are.”
Every few years, the group hosts its marquis Centrallia event — a popular forum that brings together local and global players on home soil to explore business opportunities.
Mulaire expects that initiative to continue to rise in prominence as Canada pursues new trade accords. The signing of the Comprehensive Economic and Trade Agreement, or CETA, with the European Union — coupled with lingering uncertainty south of the border — should, she says, renew interest in a deeper level of market diversification.
But that doesn’t mean turning a blind eye to domestic opportunity. In fact, WTC Winnipeg is beginning to dedicate some of its focus to the Canadian north.
“Places like Nunavut are full of untapped potential and unmet needs,” says Mulaire. “We’re working with communities and supporting brand new resource development projects there. That requires a lot of infrastructure, and there’s no reason we can’t supply the solutions.”
Mark Colley
Chief Financial Officer, The Winning Combination
The Winning Combination (TWC) could very well be Manitoba’s poster child for modern manufacturing.
The sports nutrition and supplement producer has grown from approximately 60 to 110 employees in only two years, and will be honoured with the Emerging Award at the 2017 Canadian Manufacturers & Exporters’ Gala Awards Dinner this March.
For Mark Colley, TWC’s chief financial officer, the job has been a lesson in adaptation. In addition to finance, Colley also oversees functions related to IT and operations. It may seem like a daunting portfolio, but Colley insists having immediate visibility to all the moving parts has allowed the business to scale quickly.
“One of the best things [CEO] Shazad [Bukhari] and I did was institute daily meetings to break down silos and provide clarity around what other areas of the business are doing,” exclaims Colley. “Especially if you’re undergoing a period of significant change, it’s important to have upper management involved in operational discussions to ensure everything is aligned with the leadership’s vision of where you’re heading.”
Surviving that change is not without bumps in the road.
Shortly after Colley assumed the position in December 2014, there were admitted growing pains. Sales and production capacity ebbed and flowed with minimal consistency, creating strains on order turnaround and customer expectations.
He soon found some relief in material requirements planning (MRP) software.
“Scaling up in our company was heavily reliant on putting in place a material replacement system,” Colley recalls. “Adding the MRP software to be able to do a lot of the forecasting and benchmarking for us, to a point where we can now look by month to see what we need per SKU, allows us to hold each department accountable in the decision-making process.”
He argues, though, nothing can replace an initial top-down evaluation of corporate structure and function.
“When I came here, much like a lot of small companies, there was a lot of people wearing a lot of different hats in a lot of different jobs,” says Colley. “So, right off the bat, we had to assess if we had the right people in the right positions. In some cases, that means moving staff to other areas of the business to allow their skills to flourish.
“Technological tools can be effective, but they often run on a ‘garbage in, garbage out’ basis. You need to take the time to be certain you have synergy at the human resource level.”
Mark Hoddenbagh
Vice President, Strategic Development, Red River College
In Winnipeg academic circles, Mark Hoddenbagh is the new kid on the block.
The former executive lead for innovation and applied research at Ottawa’s Algonquin College took over as vice president of strategic development at Red River College this past summer, culminating a near-30-year career that has now taken him to each of Canada’s three Prairie provinces.
It was an opportunity Hoddenbagh couldn’t pass up. The college is already a go-to destination for manufacturers engaging post-secondary institutions, partnering with roughly 60 local businesses and some of Manitoba’s most identifiable companies — StandardAero, New Flyer Industries, and Manitoba Hydro, just to name a few.
The school is also home to the Centre for Aerospace Technology & Training, a state-of-the-art non-destructive testing facility, as well as advanced robotics and additive manufacturing equipment.
Yet, Hoddenbagh isn’t satisfied with the status quo.
“There are three areas where I think the college can strengthen linkages with industry,” he says. “The first, of course, which we are already known for, is talent development. The second area is business development — we’re just into that, becoming more active in connecting marketing students to small- and medium-sized companies in particular. And the third is product development.
“Helping companies develop products, processes, and services at low cost using industry-hardened faculty and creative students pays off in a big way in terms of economic development and job creation. Beyond the R&D, expertise, and leading-edge equipment, the college is exploring options to enhance its infrastructure so that it is a step up from the ‘makerspace.’ This would allow manufacturers to produce a prototype run of 100, 150, or 200, that they can then go out and test with their customers in higher volumes, and probably higher qualities.”
Ultimately, the goal is to power local innovation. That, says Hoddenbagh, is how Manitoba will continue its rise in prominence on the global stage.
But maybe, he adds, it’s time to amend how we think of innovation altogether.
“I don’t know if we want to push Canada to the front of traditional innovation,” questions Hoddenbagh. “What I mean by that is the measures typically used are divorced from the things we do to stimulate and help true innovation. Sure, measures like IP are fine; but what I’d like to do is lead a ‘fifth metric,’ where we set the standard for transforming knowledge into commercialized products. That’s not necessarily going to be picked up on in innovation scales like the OECD (Organisation for Economic Co-operation and Development).”
As for how Manitoba can stay ahead of the pack? Hoddenbagh has some advice for elected officials.
“Any government worth its salt will take a real, hard look at how colleges can function as the commercialization pipeline for publicly-funded IP, such as IP held within universities,” concludes Hoddenbagh. “Currently, the economic outcomes are not commensurate with the public money we invest in research.
“Colleges have the platform and connections to translate knowledge into tangible products, processes, and services. And Manitoba can be a leader in formalizing those partnerships and that value chain.”