Creating Value in Canadian Manufacturing: Executive Roundtable Offers Insights
April 02, 2007

Creating Value in Canadian Manufacturing: Executive Roundtable Offers Insights into Trends, Implications, Possibilities and Solutions

Ottawa, April 2, 2007… CATAAlliance and The Access Group have recently conducted a peer-to-peer Executive Roundtable to discuss how Canadian manufacturing organizations can create value for customers and compete in highly competitive international markets. Canadian manufacturing accounts for over $580 billion in shipments or 18 percent of our GDP.

According to CATAAlliance President John Reid, “The challenge facing this industry is maintaining their value within the competitive landscape of manufacturing in countries such as China and India. Manufacturing executives need to re-engineer their business models in order to create value and compete.”

He added, “The Roundtable indicated that the biggest challenge facing most executives is that these organizations keep repeating the same efforts over and over expecting to attain different results. Getting started on re-invention efforts is the hardest part.”

Key Roundtable Questions and Observations

  • What are the steps that need to be taken to progress from ‘old’ ways of doing things to new more efficient processes?

Participants observed:

“Dynamic leaders who are capable of envisioning and executing a new business model for their organization would help start the change.”

“One of the major challenges is letting go of what we know and changing business and culture after decades of doing things the same way.”

“In Canada, 80% of managers spend less than 1 hour thinking about the future of their businesses. Manufacturing executives need to begin thinking about the long term goals of their companies instead of short-sighted focus on current quotas and performance. They need to invest in re-educating their workforce and need to invest in technology infrastructure.

“There was a Canadian company that hadn’t made any investments in technology and was challenged with the Canadian exchange rate… today, they are supplying to China. The key steps they took were to reduce their production costs by integrating their various businesses”.

“The trick in being successful in this space is to work hard in keeping the design/ value-add (intellectual capital) here in Canada and send the non value-added work (basic manufacturing) to China. Successful organizations have been spending their resources innovating their processes and not necessarily on R&D. In other words, 90% of the value must be created here in Canada and 10% must be sent to China.”

  • Once a strategy is laid out and implemented, how do you know you are progressing your company along that strategy and getting to your goals? Do you know what is going on the shop floor or do you wait until the end of the year to figure out what is going on?

Participants observed:

“The quality of data manufacturing executives are using is key in their ability to make good business decisions.”

“Part of this data includes the use of new scorecards. The challenge facing organizations is that most of their data is based on past performance which makes it challenging to align these outdated scorecards to present activities. For manufacturing executives to succeed, they need to continuously create scorecards which will align and measure their activities against what their customers need.”

“One of the reasons why Canadian manufacturers are challenged in their adoption of new business models and scorecards is due to the fact that they are mostly SMEs (Small-Medium Enterprises) who have been operating their way since their inception.”

  • How can the industry attract women? Focusing on people is a very important issue as well, and should not be neglected.

Participants observed:

“Access to talent is another issue that is challenging manufacturing organizations.”

“With over 20% of the Canadian workforce retiring within the next 5 to 7 years, the manufacturing industry clearly needs to attract innovators. Manufacturing executives need to train new Canadians and figure out how to best utilize senior citizens.”

Taimour Zaman, President of the Access Group and CATAAlliance Director concluded, “We need to reach out to companies who do not even realize that the landscape for manufacturing is changing and convince them that reinvention is the key to success. We are committed to helping lead this engagement through outreach, thought leadership and best practice research.”

++ Action Item: Contact John Reid at johnreid@attglobal.net for a copy of the Manufacturing Roundtable Briefing Note, entitled TIPS ( i.e., Trends, Implications, Possibilities and Solutions). The five page Briefing is designed as an aid for engaging your management team in discussion on creating customer value and competitiveness. Please use TIPS in the Header and verify your CATA membership status.