Cover story – Parting thoughts: Outgoing CME CEO Jayson Myers on the future of Canadian manufacturing

By Derek Lothian.  Back in June, I attended the Saskatchewan Construction Association’s annual conference near Waskesiu, on the fringes of Prince Albert National Park. Maybe it was the three straight days of sun, maybe it was the unwelcome remnants of the Great Western Pilsner, but there I found myself — bright and early Saturday morning — oddly indifferent to the lucky foursome teeing off only yards away. Instead, I sat spellbound, listening to business commentator Paul Martin hash out his ‘big ideas’ for the future of Saskatchewan prosperity. The first I really enjoyed: ‘Pulling a Newfoundland’ and inviting the Northwest Territories to join the provincial brotherhood as an extension of Saskatchewan. Instantaneously, our region’s natural resources would have access to tidewater, and we would have a hammered stake in the mineral-rich north for the next 50-plus years of exploration. The second I liked even more (and continue to take credit for whenever Paul isn’t around to hear): Capping lifetime personal income tax. Let’s just say we do so at $1 million dollars (or whatever number… Read More

By Bryan McCrea & Evan Willoughby.  What do a smooth-talking commerce student and an eager engineer have in common? Shipping containers, dragons, and an all-too-aggressive aversion to the word no. Our story starts in 2010 at the University of Saskatchewan — the birthplace of some of the province’s most innovative and thriving manufacturing firms: SED Systems, Vecima Networks, and International Road Dynamics, just to name a few. It was there we first crossed paths and began a journey that would take us to the airwaves on national television, to Canada’s most powerful boardrooms, and, in recent years, all the way up to the northern tip of Alaska. The two of us became serendipitous allies during the fourth-year Wilson Centre for Entrepreneurial Excellence i3 Idea Challenge. Our big idea (okay, Evan’s): To turn shipping containers into housing for students. Truth be told, we soon realized it wasn’t a very good idea as far as business competitions go. Students don’t have money. We didn’t have money for land. It didn’t make a lot of sense. So, we… Read More

By Chris Dekker.  This year, the Saskatchewan Trade & Export Partnership (STEP) celebrates 20 years of operation. While manufacturing has figured prominently in the province’s 350 per cent export growth in that timeframe, the majority of the increase has come from trade in commodities. But much has changed over those two decades. According to British novelist L.P. Hartley: “The past is a foreign country; they do things differently there.” If we could visit the country called 1996, 20 years away, we would be able to see just how different economic development strategies were back in the day. Leading into the 1990s, economic development was dominated by the big ‘D’ word — diversification. The overarching notion of diversification was to shift away from our dependence on resources. A few years ago, I joined 30 experts in economics, government, and academia for The Hon. James A. Richardson Discovery Roundtables, to examine the role of economic diversification on the Prairies. The result was a report from the CanadaWest Foundation, deliciously titled, Who Cares About Baskets? We’ve got Eggs!:… Read More

By Jonathan Hamelin.  These days, Alberta manufacturers are hardly having a gas. The devastating drop in crude prices — from more than $107 per barrel only two years ago to the $40 mark being edged upon this summer — has caused a downward jolt in capital investment, delaying or cancelling many projects altogether. In April, the Canadian Association of Petroleum Producers forecasted capital investment in the country’s oil and gas sector to drop to $31 billion this year, down from a record $81 billion recorded in 2014. For companies servicing the industry, it has been a rocky ride. “All of the business is drying up,” says Tony Lam, executive vice president of engineering and operations for Stream-Flo, an Edmonton-based manufacturer of wellheads, as well as gate, check, and surface safety valves. “There are no longer any new projects. They might go back to make some changes to improve production; but otherwise all of the drilling projects for heavy oil have disappeared.” The sluggish Canadian dollar has been no friend, either. “It has been challenging trying… Read More

By Ian Marshall.  Think, for a moment, of manufacturers in your network that have implemented and sustained long-term lean programs. Five years, 10 years, 20 years? How about in your own operations? Is lean merely set of tools, or is it a way of doing business, embraced from the shop floor all the way up to the corner office? If you’re wary to disclose the answer, don’t fret — you’re not alone. The truth is most lean programs fail to deliver the hoped-for results. Or, at least, they falter over time. Even Shingo Prize winners — companies that have been recognized for excellence in lean — publicly struggle to realize endured success. The more disparaging part is that few stop to ask why. Most business owners and senior managers think about lean as a vehicle to improve business performance. But to motivate, engage, and bring the workforce along, there has to be a compelling reason that goes beyond reducing costs or increasing sales. There needs to be a bigger purpose, a bigger reason to change.… Read More

By Warren Clark.  How do you define workplace culture? What does it mean to you? Many times, I’ve heard it characterized as ‘the way we do things around here’ — taking the good, the bad, and the ugly implications along with it. All too often, manufacturers’ ‘safety programs’ are comprised of only the basic foundations of a safety system — policies, procedures, rules, responsibilities, new employee orientation, and training. But is training in all these areas enough? Should we be surprised then when safety outcomes don’t improve, or when we battle with the same recurring headaches day after day? Building and sustaining an enterprise-wide culture of safety requires a top-down strategy, wholly embraced and communicated by management. The ground-level buy-in, meanwhile, starts with action. Employees need to see unwavering support and action for safety, from both senior leadership and supervisors. They need to believe the company is willing to do whatever is necessary to protect the wellbeing of staff (even at the expense of profits). They want to see words become action. In addition, they… Read More

Editor Derek Lothian sits down with outgoing Canadian Manufacturers & Exporters CEO Jayson Myers for a candid Q&A on the future of the country’s manufacturing sector.  Derek Lothian denoted by the initials DL; Jayson Myers denoted by the initials JM. DL: Dr. Myers, thanks for taking the time. Since you started your career with Canadian Manufacturers & Exporters (CME) in 1991, a lot has changed in Prairie manufacturing: Sales have multiplied two-and-a-half times over — more than double the national pace. Employment has increased 38 per cent. And, in the last 15 years alone, average weekly earnings in the sector have swelled by 54 per cent — 16 points ahead of even the highest provincial rate of inflation [in Alberta]. Take us through the major milestones you’ve seen during your tenure. JM: There’s no doubt there has been a boom in Prairie manufacturing. Over the past 10 years, the centre of Canadian manufacturing activity clearly has shifted westward. When I joined CME in 1991, Canada and the U.S. had just signed a landmark free trade… Read More

Why currency markets are now top-of-mind for many small- and medium-sized manufacturers.  By Will Stanley.  Two decades ago, the practice of foreign exchange (FX) management was reserved primarily for multinational corporations and commodity traders. Today, with Prairie merchandise exports at an all-time high, it is an in-demand skill set that has become mission critical for even the smallest manufacturer. Few executives know this better than Casey Davis. Davis is the CEO of Morris Industries, an agricultural implement manufacturer with operations in Saskatchewan and Manitoba, and sales in more than a dozen markets around the globe. Although exports currently account for half of the company’s annual revenue, international sales have spiked as high as 80 per cent in recent years. At any given time, Davis estimates Morris Industries is dealing in at least a handful of different currencies. “There was a time when we would be measuring foreign purchases against sales quarterly at best,” he recalls. “We’ve accelerated that quite a bit, especially leading up to our fiscal budget cycle. Now, we’re often looking at what… Read More

By Sean Speer.  July’s agreement between the premiers to eliminate interprovincial trade barriers earned considerable self-praise. The premiers called it “historic,” “unprecedented,” and “ground-breaking,” and committed to having the accord in-place for Canada’s sesquicentennial anniversary next July 1. It all sounded pretty significant, especially for Western Canadian manufacturers and processors, who are subjected to the high costs of complying with these barriers — ranging from different employee standards to separate trucking regulations to competing weight definitions — and thus for whom an ambitious deal to establish free trade inside of Canada could be a significant financial boost. But underneath the small print and the premiers’ hyperbole lies disappointment. The agreement-in-principle may offer marginal relief for Prairie businesses, but it fails to offer real progress on establishing an economic union for Canada. Remember that Canadian Confederation was, in large part, motivated to eliminate barriers to trade and commerce among the provinces. The United States had just walked away from a free trade deal with us and part of the solution was to bind the provinces together… Read More

The Prairies are home to some of the best R&D and commercialization assets on the planet — but are they being used to their full potential?  By Martin Cash.  One attribute most representative of Prairie manufacturing is part and parcel with perhaps its primary ongoing challenge: Innovation. With such a diversified base — from resource development supply and aerospace to ground transportation vehicles and agricultural implements — building the right supports to assist in research and development is not an easy task. Factor in geography, limited government resources, and a collective population roughly the size of the Greater Toronto Area, and there are immediately competitive restraints. That said, Prairie manufacturers are no strangers to competition, either. They thrive on it. But as the rest of the world vies for position at the top of the value chain, decisions on where and how to invest public dollars in manufacturing innovation have become more vital than ever before. It starts with accessibility, industry alignment, and a technological anticipation of the market. Take, for instance, the Winnipeg-based Composites… Read More

  Steven Hoffrogge, President & CEO, Crestline Coach.  As a leader, the most precious commodity you have is your time. How you make decisions, how you prioritize competing demands can determine whether you are a drag or draft on your organization’s progress. In most situations, time aids you in making better decisions. It allows you to gather more information, consult others, and critically examine your own thought process. The reality, however, is that you don’t always have time, so being able to identify what decisions you can make versus the decisions you need to make is an indispensable skill. This really hit home around the year 2000, as I was exposed to a senior leadership team in the midst of a turnaround. One particular individual, who has since become a mentor of mine, taught me there is a great art and wisdom to choosing when and how to act. It was U.S. President Eisenhower who said, “What is important is seldom urgent, and what is urgent is seldom important.” Every morning, I come into the office and… Read More

Meet two Saskatchewan manufacturers finding lean success the second time around.  By Joanne Paulson.  Three years ago, the management team at Degelman Industries knew something had to change. The Regina-based manufacturer of farm equipment opened its doors in 1963, eventually moving into an 11,000-square-foot plant three years later. In the decades that followed, the company expanded its product line to include livestock and tillage equipment, land rollers, dozer blades, and other industrial goods, growing its facility to 160,000 square feet, with 300 employees. Business was booming — but they weren’t meeting their deadlines. “In the fall of 2013, we were in rough shape,” recalls operations manager Justin Kleckner. “We couldn’t supply our customers with accurate delivery times. We had trouble capturing the cost variances. We weren’t as efficient as we could be. Priorities were constantly changing, and demand was as well. It hit a point where we decided we couldn’t do it anymore.” Enter lean. Degelman, which had flirted with lean manufacturing implementation 13 years earlier, knew it was time to give it another try;… Read More

This isn’t ‘Toronto money’ — it’s your neighbours’ savings, investing in a prosperous Prairie manufacturing sector.  By Joanne Paulson.  Private equity has long been marred in mystery and misconception. Once considered the ‘bank of last resort’ by many business owners, private equity firms were shunned as out-of-touch investors from far-off places, whose only mission was to strip cost and maximize shareholder returns. For a growing number of Prairie manufacturers, however, that notion could not be further from reality. Just ask Steven Hoffrogge, president and CEO of Crestline Coach. The Saskatoon-based ambulance and bus manufacturer underwent a private equity-backed management buyout in 2004 with the help of PFM Capital — located 250 kilometres south, in Regina. Since that acquisition, the two organizations have walked hand-in-hand through a top-down corporate transformation. “This company is probably three times the size it was, in revenue, from when PFM first became involved,” says Hoffrogge. “We’ve gone from fewer than 75 employees to approaching 200 today. We have expanded our footprint as it relates to where our customers are located as… Read More

By Dave Hogg.  In lean, the term kaizen is made up of two separate Sino-Japanese words: Kai, meaning ‘change’ and zen, defined as ‘for the better’ — compounded quite literally as ‘change for the better.’ It is a methodology and mindset, which must be sustainable. When that philosophy is implemented in the workplace, it triggers everyone to continuously look for small ways to improve processes. Doing 1,000 things one per cent better is far more advantageous than doing a single thing 1,000 per cent better. A quick history The Second World War gave birth to Training Within Industry (TWI), a system of standardized work that reverse-telescoped the duration of employee training — a necessity given the historic need for increased productivity. Through TWI, some critical training was cut from five years to six months, with identical competence. After the war, this approach helped evolve kaizen thinking into a powerful, common sense tool to rapidly solve specific problems. At first, kaizens took weeks or months to complete. Many decades later, in the 1980s, the Association for… Read More

The growing role of inland ports on the landlocked Prairies.  By Craig Slater.  Shipping goods to market sounds like a straightforward task. Experience, however, reminds us that is not always the case. Every advance in transportation innovation, from the wheel to the 18 wheeler, has been designed to move goods to their destination quicker. For manufacturers, this speed can be the difference between competiveness and bankruptcy. But the latest shift in the logistics equation has little to do with cutting-edge technology or breakthrough invention. Instead, the Prairies are rewriting the rules on traditional shipping hotbeds, diving headfirst into the world of ‘inland ports’ — specialized distribution, warehousing, and industrial centres connected directly into the intermodal transportation network. In Manitoba, the 20,000-acre CentrePort, near Winnipeg, is North America’s largest inland port, and amongst the most recognizable. Its tri-modal facility — boasting rail, air, and truck capacity — along with its strategic location in the geographic centre of Canada are big reasons why some of the province’s largest manufacturers have become tenants, including Boeing, MacDon, and Winpak.… Read More

Former Canadian ambassador to the United States Gary Doer on cross-border trade, energy policy, and ‘bumper sticker politics’.  By Derek Lothian.  PHOTO CREDIT: THE CANADIAN PRESS / JUSTIN TANG.  Gary Doer is no stranger to the public spotlight. Heralded as a consensus builder by those of seemingly every political stripe, his résumé is among the most decorated in the country: Provincial cabinet minister, leader of the opposition, three terms as premier of Manitoba, and more than six years as Canada’s Ambassador to the United States. Since returning to Winnipeg from Washington this past January, however, Doer has been enjoying life free from underneath the microscope. He has joined five boards of directors, including Investors Group and Great West Life, and sits as co-chair of the Canada Institute at the D.C.-based Woodrow Wilson International Center for Scholars. It is a change of pace that has allowed the 68-year-old to remain connected to one of his true passions and an issue that has become a hallmark of his career: Canada-U.S. trade. Amidst one of the most contentious… Read More

By Ryan Yedersberger.  In the immortal words of Bob Dylan, “The times they are a-changin’.” Dylan’s 1964 counterculture hit, ranked 59th on Rolling Stone’s list of the top 500 songs of all time, was about many issues of the day — social injustice, government inaction, and inequality, to name a few. It was, in no way, about marketing. Although it very well could’ve been. Few industries have undergone the complete transformation that marketing has over the past five decades. Prairie manufacturers have not been immune to these changes. Yet, many still prefer to focus on ‘classic’ methods to generate sales leads, such as word-of-mouth, trade shows, print catalogues, and cold calling. While these are still important in the manufacturing world, they alone are not enough. According to a B2B research paper published by ThomasNet, 90 per cent of industrial buyers now do some form of online research before choosing a supplier or placing an order. Having a strong digital presence is no longer optional for ‘when sales pick up’ — it is a precursor to… Read More

How much sleep do executives need to function at optimal performance? Business executives have a lot in common with elite athletes when it comes to mental exertion and the sleep needed to perform at a high level. Although there is a great deal of individual variability (women, for instance, typically require 20-30 minutes more sleep than men), the recommended amount of sleep for a healthy adult is between 7-9 hours per day. Even if you feel you are performing well on reduced sleep, it may be an illusion. In fact, only five per cent of the population requires fewer than six hours’ sleep. Ideally, executives should wake up refreshed without an alarm clock. If you find yourself regularly hitting the snooze button or relying on caffeine to get you through the day, you’re likely not receiving enough shut-eye. And if you snore, cannot fall asleep within 30 minutes, or get more sleep but still feel exhausted, seek help from a sleep professional. These could be signs you have an underlying sleep disorder. What are the… Read More

3D printing is no longer a fringe technology or inane fad — it is a manufacturing tool here to stay.  By Craig Slater.  Once little more than sci-fi fantasy, 3D printing has long since proven its potential in mainstream manufacturing circles, leaving behind a trail of inspired technologists and giddy salespeople. Unlike subtractive manufacturing, where a component or product is derived from the removal (and, often, consequent combination) of material, 3D printing is a form of additive manufacturing, which involves synthesizing three-dimensional objects through successive material layering. Although the technology has only garnered widespread profile in the past decade, it has been standard practice with many companies around the world for more than 30 years.  Industrial modelling is one of the longest-standing applications. In the past, when manufacturers endeavoured to design and test a new product, it was not uncommon to wait weeks for a prototype — and, then, if additional changes were required, came more delay, racking up untold costs in shipping, engineering, and lost-time. Today, using 3D printers, multiple prototypes can be produced in… Read More