All posts filed under: Volume 1, Issue 3 – Winter 2016

Embracing the certainty of uncertainty

By Derek Lothian.  So. President Donald Trump. Let’s all take a moment to let that sink in. Truth be told, I started writing this column on November 7. Ironically, it was all about disruptors — a common theme in this issue of Prairie Manufacturer Magazine. Little did I imagine, only 24 hours later, we’d be hit by one of the largest political disruptions in modern history. Granted, changes to government are nothing new. Even the most surprising election results rarely throw markets or businesses into panic. But what makes the latest U.S. voting cycle particularly unnerving is the same factor driving post-Brexit instability in the U.K. and Europe: Complete, top-down uncertainty. We are entering uncharted waters in the Canada-U.S. trade relationship — in part because we simply do not know where the incoming leader of the free world stands on so many important, integrated issues. Canada’s ambassador to the U.S., David MacNaughton, has already stated on record he would be ‘happy’ to renegotiate NAFTA with Trump, although who knows if the vision for his desired… Read More

Technology: The platform for diversification

By Mogens Smed.  We might as well start the conversation off by recalling the devastation of the National Energy Program in 1982. It was certainly my comeuppance and wake-up call in business. And, yet, here we are facing a savage drop in the price of energy — the Holy Grail for Western Canadians and Canadians at-large. It is still our source of feast or famine. This, despite declaring we are on a quest for creating businesses not reliant on the price of a barrel of oil or other non-renewable resources. Yes, over the years, numerous success stories outside the energy industry spawned in Western Canada. Stantec, PCL, and Ledcor (there are many others) demonstrate excellent success in the international arena. The time and investment to attain their stature, however, is absolutely staggering and well beyond the means of most aspiring entrepreneurs, especially given the sparse availability of investment capital for start-up ventures. How can we succeed? Through technology. The last 10 years have brought us to the verge of the fourth Industrial Revolution. The first… Read More

Risk, opportunity abound in 2017

By Craig Wright. The economic and political risks to the global economy remain elevated as Prairie manufacturers head into 2017. Earlier worries regarding a sharp slowdown in China have moderated, as activity has held steady at just under seven per cent for three consecutive quarters. Policy options for Chinese authorities remain abundant, and there will not be any reluctance to use any and all options if the growth outlook deteriorates. The uncertainty with respect to the fallout from the Brexit vote has diminished for now, and the economic data for both the U.K. and the Eurozone have exceeded expectations. The challenging part of Brexit, however, is still ahead. Europe and the U.K. have yet to begin the renegotiation of their relationship in a post-Brexit world. The combination of political posturing and policy uncertainty will keep overall uncertainty heightened, likely weighing on investment spending in the U.K. and Eurozone next year. It also poses downside risks for a global economy already suffering from a confidence shortfall. The U.S. economy started 2016 on a weak note, with… Read More

From dollars to sense: My experience as a lean CFO

By John Povhe.  To many business leaders, the phrase lean finance is an oxymoron. And to other professional accountants, it can be downright foreign. Seven years ago, I found myself in the same boat. I was the new CFO of a struggling company in a sector I knew little about — manufacturing kitchen cabinets. Lean wasn’t in my vocabulary, nor was it on the radar of management. Fortunately, our operations leadership group could see opportunity where we didn’t. Manufacturing on the Prairies is less of an industry than it is a community. Everyone knows everyone, and employees tend to transition within seemingly dissimilar environments with relative ease. So, it should be no surprise our lean program at Superior Cabinets was actually kick-started by a handful of employees who had migrated over from the farm implement world. They saw the benefit of a culture that looked at problems differently, valued grassroots input, and captured savings to do things better. In many ways, it was a natural process that allowed us not only to survive, but thrive.… Read More

What moves you?

Why transportation is becoming a competitive differentiator in the new age of manufacturing.  By Derek Lothian. For Jerry Bigam, it was a case of the chicken or the egg. The CEO of Edmonton-based Kinnikinnick Foods long knew it was time to expand beyond the North American marketplace. For years, however, his ambitions were surpassed only by the growing list of challenges to serving a global consumer base in a highly niche industry. At the helm of one of the largest gluten-free food manufacturing facilities in the world, Bigam’s primary obstacle was exposure to risk. Existing transportation infrastructure meant he would need to anticipate demand at least six weeks in advance, allowing the company time to ship product to tidewater, and then across either the Atlantic or Pacific Ocean by container. It was a risk he wasn’t willing to take. “It didn’t matter where we were looking overseas, the competitive economics were too hard,” recalls Bigam. “Nothing kills a new product in a new market quite like empty shelves. We would have needed to build up… Read More

Training the workforce of Industry 4.0

By Dr. Larry Rosia.  Full disclosure: I’m a lifelong academic. I’ve been immersed in the world of education and training for more than 35 years — as an instructor, program chair, dean, and now president and CEO of one of Canada’s most dynamic polytechnic institutions. But don’t hold that against me just yet. I’m actually here to plead industry’s case for a better, more responsive, and more innovative training sector. There is no doubt higher education is one of the most important ingredients in the economic chain. Human capital is the universal input for all businesses, and we in polytechnics, community colleges, and universities are responsible for ensuring the quality of those inputs. Admittedly, however, academia often forgets that you — manufacturers and employers — are our customers, our clients. And, sometimes, we haven’t been the best suppliers. That’s not because we’re bad at what we do. To the contrary, I’d argue Canada has one of the strongest post-secondary systems in the world. In fact, according to the Organization for Economic Co-operation and Development’s 2016… Read More

#AlbertaInnovates

Amidst the commodities crash and one of the worst recessions on record, Alberta manufacturers have turned to their entrepreneurial instincts.  By Joanne Paulson.  While CTV’s hit show Corner Gas is widely associated with small town Saskatchewan, its theme song these days could very well apply to the province’s westerly next-door neighbour: ‘You think there’s not a lot going on; but look closer, baby, you’re so wrong.’ Without question, Alberta’s economy has been hard hit. Weakened crude prices, which first dipped below $30 USD per barrel in January, compounded by one of the most devastating wildfires in Canadian history, have left oil producers and those who service the industry reeling. And who can be the least bit surprised? At its peak, the sector churns out upwards of $30 billion worth of output annually — hardly a drop in the bucket by any standard. But, if you look beyond the gloomy headlines and political bombast, innovation is beginning to reclaim centre stage. That’s not to say it ever left. Perhaps the rest of the country is simply… Read More

A Semple recipe for success

2016 ABEX Business Leader of the Year honouree and Brandt Group of Companies Chairman Gavin Semple chats with Saskatchewan Chamber of Commerce CEO Steve McLellan about leadership, innovation, and the ‘most important sale’. Steve McLellan denoted by the initials SM; Gavin Semple denoted by the initials GS. SM: Mr. Semple, thanks so much for sitting down with me, and congratulations on your recognition as the chamber’s 2016 ABEX Business Leader of the Year. GS: Thank you, Steve. SM: Let’s start by talking a little bit about the idea of opportunity. How does Brandt look for new opportunity in a ‘rainy day’ type of economy? GS: When things are good, business is booming, and we’re all focused on keeping up with demand, there is sometimes a tendency to think short-term instead of long-term. The converse is, when things happen in the market that hurt your business, it forces the whole organization to rethink what new products you can introduce, what new markets you can enter, and what new ventures you should take on to grow. Coming… Read More

Foreign trade can’t be so foreign anymore

By Jayson Myers.  Good news about CETA. For those keeping score, this is the third time Canada’s Comprehensive Economic and Trade Agreement with the European Union has been signed, but another major hurdle has been crossed on the road to ratification. It now goes to the European Parliament (expect another signing ceremony!), and then enabling legislation must be passed in Canadian and European national parliaments. If all goes well, the treaty will come into effect next year. CETA will open new opportunities for Canadian business in Europe. And none too soon. The International Monetary Fund (IMF) has just downgraded its forecast for world economic growth to a disappointing 3.4 per cent for 2017. It expects advanced economies to chug ahead at a measly 1.8 per cent next year. The problem? Well, there are several. Commodity markets will remain depressed. China is pivoting away from infrastructure and heavy industry to consumer and services-led growth. There’s a lot of excess capacity in industrial markets. Businesses are cutting costs and capital investment is expected to remain weak, especially… Read More

House of cards?

By Birgit Matthiesen.  The 2016 election was the longest in U.S. history. For more than 85 weeks, American households were bombarded with lofty promises and grand ambitions. President-elect Donald Trump will assume the Oval Office on January 20, 2017, without any previous public service experience. In doing so, he will be taking the reins of the world’s largest economy, and Canada’s most prominent trading partner. How he leads, however, remains to be seen. On trade policy, Trump went further than any other candidate, promising to ‘rip up’ existing agreements, including NAFTA, impose a 35 per cent tariff on imports from Mexico and a 45 per cent duty on imports from China, and potentially even pull out of the World Trade Organization. He will arrive in Washington supported by a GOP-led House of Representatives, as well as a GOP majority in the Senate. Legislatively, one would expect smooth sailing for the next two years minimum, until the midterm elections. But these are not normal times. In the weeks following the November 8 vote, my phone has… Read More

Construction moves indoors

How manufacturing is powering innovation in Western Canada’s home building industry.  By Joanne Paulson.  Sometimes, it’s all in a name. When Canada’s housing market began to heat up in the mid-2000s, and the dream of home ownership inched further and further out of the reach of many consumers, the term affordable housing became more than just a price category — almost overnight, it transformed into a call to action for policymakers and builders alike. It was a dilemma that had reached new heights, and one that required out-of-the-box solutions. Enter Innovative Residential. Co-founders Alex Miller and Tyler Mathies began their construction careers like many young entrepreneurs in the industry — by flipping homes. But, soon, a rather uncharacteristic opportunity presented itself that would change their business forever. Against the backdrop of Saskatchewan’s economic heyday, the Saskatoon airport had started to attract unprecedented volumes of travellers. With the boom came the need to better develop nearby commercial opportunities, including a parcel of land just south of the airport, in the city’s tired McNab Park neighbourhood. To… Read More

MacLean: The days of carbon pricing are upon us

By David MacLean.  It’s happening, so we best get ready. By January, more Canadian manufacturers will be operating under some form of carbon pricing regime than not. The writing has been on the wall for a long time. But, when Prime Minister Trudeau issued an ultimatum to the provinces, announcing Ottawa would impose a price on carbon even if the provinces don’t, things got real in a hurry. Trudeau’s national policy, broadcast on the floor of the House of Commons in October, has several elements that manufacturers need to pay attention to. It calls for a broad-based carbon price in every region of the country. The emphasis on a ‘carbon price’ is important, as it signals the federal government is eschewing more economically burdensome ‘command and control’ or regulatory-based approaches to carbon reduction. Ottawa wants the carbon price to be equal across Canada, so one region doesn’t grab an unfair advantage over another by setting a lower price — and they want that price to gradually rise over time. The provinces will be free to… Read More

The truth about 5S

Workplace organization is not housekeeping — it’s the key to mission-readiness in 2017.  By Dave Hogg.  Modern workplace organization methodology — or 5S — can be traced back to Henry Ford’s CAN-DO thinking in the early 1900s. The idiom stood for cleaning up, arranging, neatness, discipline, and ongoing improvement. From there, half a century later, the Japanese derived the popular 5S system used globally today: Sort, set in order, shine, standardize, and sustain. Ford entrenched this philosophy as common practice with every member of his staff. It was an expected responsibility of both managers and shop floor personnel. He was careful never to call it housekeeping (you should avoid doing so, too!), as that particular word implies it is perhaps someone else’s job. Actually, it’s part of yours. Mission-readiness Workplace organization is a sign of professionalism. It means being able to put your hands on whatever you need without wasting time. It means not having to break your concentration when solving a problem. And, it means protecting an image with customers that are about to… Read More

Digitizing safety

By Joanne Paulson.  Safety is our number one priority. It’s a statement echoed by virtually every manufacturing leader on the Prairies. And rightfully so. Apart from being the ‘right thing to do,’ there is a proven business case for investing in safety performance. An Aberdeen Group study co-sponsored by Rockwell Automation in 2011 found manufacturers in the top 20 per cent of safety performers enjoyed an injury frequency rate 60 times lower than companies in the bottom 30 per cent, as well as 12 per cent less unscheduled downtime, and 14 per cent better overall equipment efficiency — a measure used to compare how well a manufacturing plant performs relative to its designed production capacity. Like manufacturing, however, the business of safety has endured immense change over the past decade, and is on pace for yet another revolution. The days of scattered forms, four-inch-thick policy manuals, and stuffy classroom training courses are near an end. Technology is now beginning to usher safety into the digital age. App-lying safety systems No one understands the marriage between… Read More

With Brent Barootes, president and CEO of Partnership Group — Sponsorship Specialists®

How has sponsorship changed over the past 10 or 15 years? For many businesses, sponsorship used to be a discretionary line item, dependent on how profitable operations were in a given quarter or fiscal year. It was viewed largely as a donation, made with few expectations or conditions. Today, however, corporate sponsorships are an integrated part of marketing strategies, on the same footing as advertising, trade shows, and social media. It is an indispensable lever used to immerse an audience into your brand. Since 2006 alone, the sponsorship industry in Canada has ballooned by more than 60 per cent. Roughly 29 per cent of brand marketing budgets last year were spent on sponsorship and ‘experiential’ marketing, and three-quarters of those decisions came directly from marketing and communications departments. As a result, metrics now matter. Sponsors are now more akin to investors, and sponsorship is now a business relationship — one that can be negotiated, accelerated, and terminated, contingent on performance. Where should manufacturers spend their sponsorship dollars? The answer to that question will change depending… Read More