Manitoba businesses think lean, earn green

Hey there, time traveller!
This article was published 14/05/2009 (6022 days ago), so information in it may no longer be current.

If this is the toughest market for Canadian manufacturers in decades, you wouldn’t think there would be a lot of interest in new technology.

But Wallace Machinery & Tool, a family owned Winnipeg distributor of heavy-duty equipment, showed off new robotic equipment at an open house this week.

It might seem like their timing was misguided. On the contrary, says Canadian Manufacturers & Exporters. Investing in technology is exactly the right strategy for companies dealing with recessionary slowdowns.

Ron Koslowsky, Manitoba’s CME vice-president, has said the organization’s next campaign is to advocate for focused investment in technology and further development of international markets.

That strategy is only possible because so many local manufacturers have bought into the lean manufacturing thinking.

A Kaizen competition in Manitoba in 2007 was the first in the country modelled after the Toyota Kaizen Conference, which is all about continuous improvement.

Statistics Canada reported on Wednesday that productivity increased by 0.8 per cent in Manitoba in 2008.

That it was one of only four provinces to have achieved productivity growth is not so surprising, considering the propensity of Manitoba companies to maintain controlled growth in good times and bad.

The tight labour market of the last couple of years has meant companies can’t find too many people to hire and are loath to lay them off for fear of not finding enough staff to rehire when things get better.

This week, central bankers in Europe said the economy is close to the point where the growth curve might start heading north.

It will be interesting to see how the underlying strength that the provincial economy has exhibited will play out when growth truly resumes.

It may be urban myth to say that Manitobans are cheap, but I always think about the wealthy entrepreneur who, without any prompting, proudly described to me the inexpensive vacation he’d just returned from, at a price that most wage earners in the province might also be able to afford.

It would be a generalization to argue that Manitoba business people adhere to the same philosophy as if there was some sort of script, but the current health of the provincial economy is such an interesting example.

The first thing most economists note about Manitoba is its economic diversity.

Having a compact economy in a (relatively) geographically isolated location means that each participant in each sector is left to their devices.

After the onset of NAFTA and the hollowing out of Winnipeg’s complement of head offices, attention to best-in-class niche operations took hold.

Some happy accidents helped. Jan den Oudsten bought a struggling bus company from the province in the late 1980s and introduced innovations at New Flyer Industries that became industry standards.

Composite parts cooked in an autoclave were perceived as low-end and unsexy before technology advancement showed how their strength and weight profiles made them highly desirable. It so happened that Boeing’s Winnipeg plant used composites, and it’s now the largest factory in the country using such material.

Five years ago, Boeing, Motor Coach Industries, the province and feds started a research/commercialization lab and the Composites Innovation Centre that now collaborates with partners all over the world.

Manufacturers like Winpak and Pauwels have become so successful in their fields that their offshore owners have invested millions in Winnipeg.

Manitoba and Saskatchewan — the breadbasket of the country — are the star performers these days, partly because agricultural prices have been the least hard-hit of the commodities.

Explosive growth in countries like China, India, Brazil and Russia has elevated the standard of living — and diets — of millions. That, combined with the spike in ethanol production, has elevated the value of grains so that the low end of the cycle might not remain too low for long.

That also means the agriculture equipment makers like MacDon, Ag Growth’s Westfield Industries and Buhler Industries are generating record high sales.

Manitoba’s productivity rate is great compared to other provinces.

The conservative predispositions of Manitoba business people look brilliant in bad economic times, but can act like a governor in good times.

martin.cash@freepress.mb.ca