Mississauga, ON — Canada has always been a country with a proud industrial heritage and a global reputation as a manufacturing nation. But that reputation has recently been put to the test.
The fluctuating Canadian dollar combined with the aftermath of the most recent recession and the advent of the ‘low-cost’ production has left many examining Canada’s place in the new manufacturing value chain. Indeed, the circumstances of the past 10 years have left many questioning whether anything at all can still be made in Canada.
But a session at the Manufacturing Canada 2014 conference in Mississauga on May 8, 2014, gave concrete examples of manufacturers that thrive while producing goods in Canada and described a strategic mindset that can help lead the way to an industrial renaissance in this country. The session focused on agility in manufacturing and featured a speaker from a company with all of its operations and production taking place in Canada.
Dennis Dussin is president of his family’s business, Alps Welding, a contract fabricator in Woodbridge, ON that makes huge, engineered process equipment for a number of industries.
Early on, Dussin realized that he doesn’t need to make any one particular product to be successful. By applying the techniques and competencies his company became expert at, he could bid on projects that play to Alps’ strengths.
“We consider ourselves to be as much a service company as a manufacturing company,” said Dussin.
Dussin describes agile manufacturing as being able to change between projects quickly and work on multiple projects simultaneously, while pursuing new opportunities as they become available. To be agile, he says you must stay competitive as market conditions change locally, in North America and globally.
For Dussin, this realization came at a price. In 2004, Alps focused primarily on the oil and gas sector, which was booming. By mid-2008, oil prices almost hit US$150 per barrel, and the contracts were flowing. But by the beginning of the fourth quarter 2008, prices tanked by half, contracts got cancelled and Alps Welding’s order books dropped 40%.
Of course, this was immediately after Alps moved to a new 5,110-square metre building to handle the huge tanks required by its oil and gas clients.
Many companies would have folded under that pressure — be certain that many did — but for Dussin, this was his “wake-up moment.” He realized that focusing on the oil and gas sector made him too dependent on a narrow range of projects and exposed him to market mishaps.
The time had come for Alps to renew its commitment to business agility. Dussin developed a six-point plan to rejuvenate his business and prepare for the ebb and flow of the new market reality. Here’s how the plan breaks down:
1) Maintain flexible production capacity
- Reconfigure production layout in response to customer requirements.
- Avoid large investments in machinery and equipment that reduce flexibility, which leads to the next segment of the plan.
2) Maintain good subcontractor relationships
- Engage suppliers who have invested in capacity that Alps uses less often and which do not fit into its core competency.
3) Maintain financial flexibility
- Improves ability to invest in new opportunities when they become available.
- Helps sustain operations and reposition when the market changes.
4) Maintain a flexible and skilled work force
- Cross-training on different products and different skills where possible.
- This applies to skilled labour, sales, engineering and quality assurance.
5) Maintain diversification in customers and industry
- Just like any portfolio of investments, diversification of risk is important.
- Industries rise and fall in cycles — at least one of the industries we serve are usually in a positive growth cycle.
6) Maintain a focus on customer service
- We don’t say “These are our products, let’s find customers.”
- We say “These are our customers, how can we serve them with the skills we have?”
Michael Oulette is editor of MRO Magazine's sister website, Canadian Manufacturing Online (CMO). To learn more about Alps Welding visit http://www.alpswelding.com, or email Dennis Dussin. Dennis can also be reached at (905) 850-2780.