Imperative to invest in technology highlighted at conference
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Hey there, time traveller!
This article was published 21/03/2023 (373 days ago), so information in it may no longer be current.
At one of the seminars during CME Manitoba’s first major conference in four years, Chris Bachinski, the president of customs brokers, GHY International, spoke about significant changes Canadian importers and exporters will soon have to address.
But he said he was worried that the massive new digital platform being built by Canada Border Services Agency to assess and collect payments has problems.
It was one of the cautionary tales heard at the Canadian Manufacturers and Exporters (CME) Manitoba’s Dare to Compete conference on Tuesday where the major theme from keynote speakers was the imperative to invest in technology.
But according to Jay Myers, the CEO of the Toronto-based supercluster Next Generation Manufacturing (NGen) — and the former CEO of the national CME organization — manufacturers cannot expect that isolated injections of technology will solve all their problems.
Myers spoke about a Saskatchewan manufacturer that had just invested in robotics. When he visited, the robotics equipment was not working. The company managers said it only worked during the night because it produces too much for the company to keep up.
“The question is why did they automate here rather than down the line where they now have a bottleneck,” Myers said. “The outcome of the process is not as good as it might be.’
He said the secret to long-term success will be more fulsome integration of research, technology and production, something he said has proven to be hard to achieve.
For one thing, he said, it is because neither the manufacturer nor the technology companies are all that clear about what they’re trying to do.
He quoted a Statistics Canada survey from 2018 of 6,000 manufacturing companies that showed that 80 per cent of manufacturers invested in some form of advanced manufacturing technology. But 50 per cent said the investment did not achieve their business objective and 15 per cent did not know if it did.
“They did not know what their business objective was in the first place,” he said. “That is a large part of what we work on. It is not just about technology. It is a question about whether you are bringing the technology in to improve the right part of business to meet your objective.”
There does not seem to be any debate about whether or not automation and advanced manufacturing technology in general is an imperative.
That’s partly because 26 per cent of the manufacturing workforce will be retiring by 2030 and only six per cent of that workforce is under 30.
“That means the industry needs to improve productivity by 25 per cent in the next seven years just to keep production levels even,” said Myers. “The only way to do that is through automation.”
Ron Koslowsky, the head of CME Manitoba, said not only is technology investment necessary, it is inevitable.
That’s one of the reasons that he brought in Simon Drexler of ATS Automation to speak to his members at the Dare to Compete conference.
“Simon told us that he really does not have many customers in Manitoba,” Koslowsky said.
He does not believe that’s just because Manitoba’s manufacturing sector is full of small and medium-sized businesses.
“There are plenty of applications for smaller businesses and many of the most successful examples of implementation are smaller, more nimble companies,” he said.
Worrying about having a proper understanding of a company’s strategic goals might seem secondary to dealing with all the of the issues that manufactures have had to face over the past couple of years.
While Koslowsky said the pandemic has left many a little worn out, he said there is “reasonable optimism that this year can be as good as last year and last year was phenomenal.”
He said that in the last little while, labour issues are becoming somewhat easier to manage than even just a few months ago, but at the same time some companies are seeing their previously stacked order books softening a little.
Also, he said, “Folks are looking at the clouds and wondering if there is a recession looming.”
Those are issues that Manitoba manufacturers are not alone in facing. And even if Manitoba is not yet an automation hotbed, Myers said the fact that Manitoba has some of the cleanest (and cheapest) energy in the world will start to pay dividends.
“It is a huge opportunity,” he said. “Regulations around decarbonization will mean that metal fabricators in Manitoba may find demand growing and that they are picking up orders they never had before.”
Manitoba’s manufacturing sector’s other unique advantage is its diversification and the CME is now leading an effort to position the province as a global leader in sustainable protein.
Notwithstanding the set-back caused by the receivership of Merit Functional Foods Corp., the governments of Canada and Manitoba are investing more than $600,000 with the CME to establish a hub that supports the implementation of Project ASPIRE (Accelerating Sustainable Protein Impact and Results).
martin.cash@freepress.mb.ca
Martin Cash
Reporter
Martin Cash has been writing a column and business news at the Free Press since 1989. Over those years he’s written through a number of business cycles and the rise and fall (and rise) in fortunes of many local businesses.