Manufacturing gets industrious about growth

“Every organization has noun people and verb people. Noun people are motivated by an objective, and verb people are driven to do and make things. In our business, you need both to succeed."

So said Anthony Caputo of ATS Automation at this month’s “Transforming Canadian Manufacturing” event at the Toronto Region Board of Trade. Joined by Rob Wildeboer Executive Chairman of auto parts manufacturer, Martinrea, and Ron Cauchi, CEO of North Star Windows and Doors, the three panelists discussed how the industry is evolving to grow and meet future needs.

Canada has produced many of the world’s leading manufacturing brands, from Magna to BRP to Dofasco. Manufacturing accounts for more than CAD $173 billion of Canada’s GDP, CAD $318 billion in annual exports, and 1.7 million high-quality, full-time jobs (all figures from the Toronto Region Board of Trade).

This environment is rich with opportunity, and success comes down to three key strategies:

1) Achieve growth with a clear vision and principles

Manufacturers, particularly in automotive, need to scale quickly to secure a local footprint close to their customers’ facilities. From the get-go, aligning on their brand’s mission, vision, and operating principles is vital to ensure everyone advances in the same direction.

Acquisitions are a big part of manufacturers’ growth strategies. Though, as Rob Wildeboer warned, “95% of acquisitions fail,” and most sources place the overall failure rate of mergers and acquisitions between 70% and 90%. When the right brand vision, tools, and processes aren’t put into place following a merger, the organization cannot grow cohesively. As Caputo admitted, “it’s sometimes easier to do big things than little things.” Success, he said, ultimately comes down to choosing the right people to lead the businesses, and adhering to the good old golden rule. Reciprocity is part of building a cohesive organization.

Growth, either organically or through mergers and acquisitions, takes time. While you need to ensure you execute effectively in the long term, as Wildeboer reminded us, you’ve also “got to block out the short-term focus.”

 

2)  Pay attention to talent

The manufacturing talent shortage has led companies to become more proactive about recruitment.

North Star Windows and Doors runs a pipeline program with Fanshawe College to attract the best through internships and training. Recruitment is a promising start, and there’s also a real opportunity for employer branding and PR to raise the profile of the industry and make manufacturing more appealing to the millennial workforce.

Panelists also discussed taking a proactive approach to employee engagement by implementing CI (continuous improvement) initiatives. “We need to care what [employees] think, and convince them they can improve their piece of the business. If we get out of the way, they will do that,” Wildeboer said. The panelists also promoted clear communication and avoiding buzzwords as priorities when engaging employees. 

 

3) Make innovation core to your operation

For Martinrea, being forward-thinking is also essential to success. “We punch above our weight in innovation,” said Wildeboer—but “innovation” is not a term many associate with manufacturing. It may be surprising, then, to learn that auto manufacturers account for about two thirds of all industrial robots in the market, and manufacturers also use the most AI outside of Silicon Valley.

Innovation has always been a cornerstone of the competitive manufacturing industry, but it has been primarily focused on increasing precision and reducing waste, as in lean manufacturing. As we enter what’s been called the fourth industrial revolution, we’re going to see significant changes resulting from the wider implementation of AI and IoT technology.

“The government has an innovation agenda,” said Wildeboer, but “innovation doesn’t come from government or business commercial sectors. We just need to use it to sell to customers.”

A sector poised for growth

Despite uncertainty around the Trans-Pacific Partnership (TPP) and North American Free Trade Agreement (NAFTA) following the recent U.S. election, the Canadian manufacturing sector is relatively optimistic. Brand is central to the sector’s growth, when leveraged as both as a noun or a verb. A strong brand offers a clear value proposition to employees, suppliers, and customers—and it’s also the force that drives cohesive execution, grounded in innovation. Both combined tell a compelling growth story for Canada’s manufacturing sector.

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