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Advanced Manufacturing and the Future of Your Business

07/05/2018


Over the last few decades the landscape has become more competitive for Canadian manufacturers. We’ve all heard stories of manufacturing companies struggling to adapt to lower cost models and dealing with skilled labour shortages, to name a few.

However, there are a host of stories about small- to medium-sized companies that are on the cusp of innovation and continue to grow their businesses by redefining who they are and how they compete. Many of these small to medium-sized manufacturers have overcome their challenges by adopting advanced manufacturing to transform their businesses.

The Transformation Wave

Advanced manufacturing is the adoption of enhanced processes such as digitization or technology and other leading-edge business practices to improve the manufacturing of products. Advanced manufacturing allows companies to run more efficiently with optimized operating costs, ensuring greater margins and a more sustainable business. Traditionally, advanced manufacturing has been a luxury afforded by large manufacturers with the capital to invest in research and state of the art technology.

The challenge is that most of the employment base in Peel Region’s manufacturing sector are in small- to medium-sized companies that are unable to access the necessary knowledge to evolve and innovate. Getting these companies to cross that chasm from a traditional manufacturing business to an advanced manufacturer is extremely important to the overall region, given the employment base and potential economic impact of these companies succeeding or failing.

Manufacturing in Peel Region

Peel Region is home to 3,668 manufacturing companies that together employ about 115,000 people. The region’s manufacturing base is a key driver of the province’s economic engine. During 2013 to 2016, Peel Region lost 181 of these businesses.

The departing organizations were concentrated among small- to medium-sized manufacturers, while large manufacturers employing 200 or more people continued to grow their business during this time. Small- to medium-sized businesses struggle to bridge the gap from being a traditional manufacturing business to becoming a company with business operations that will continue to be relevant.

With a predicted recruitment gap of 20,000 skilled workers by 2025, manufacturing businesses are finding it increasingly difficult to attract and retain skilled workers. Moreover, rising labour costs, specifically Ontario’s Bill-148, will cause the minimum wage to increase to $15 per hour by January 2019. Economists are expecting that this will create wage inflation in the manufacturing sector, even for companies that currently offer wages well above $15 per hour. This will drive an increase in operating costs for businesses as well as increased foreign competition and compel businesses to look at new ways to drive growth and profitability.

Enter advanced manufacturing and third-party advisors. The following case studies highlight how two Peel Region manufacturing companies phased in change, effectively and economically, by working with and drawing on the expertise of trusted advisors.

Silcotech

North America Silcotech North America is a silicone injection molding company headquartered in Bolton, Ontario with a second facility in the U.S. and a third in India, with roughly 120 employees in all three facilities. Silcotech sought MNP’s expertise in the implementation of advanced manufacturing best practices for their largest facility in Bolton. MNP developed a transformation plan and dedicated professional staff to work alongside Silcotech’s management team to implement improvements toward the transformation of their business and manufacturing operations.

During a period of 10 months, MNP advisors worked with Silcotech to implement best-in-class processes and operational improvements to drive increased productivity and quality. As a result of the improvements realized, the company can now continue to expand within its current footprint and has a clear strategy for growth. “We couldn’t have accomplished these targeted changes without help from MNP; it would have taken us much longer to do ourselves,” said Silcotech’s Vice President Isolde Boettger

Robust Gear

Robust Gear is a family-owned gear manufacturing and machined components business that was founded over 30 years ago. Robust Gear recognized a need to grow the business and its manufacturing capabilities. The company’s president Anjan Tak was looking to implement best-in-class business processes to improve his manufacturing capability and position his company to scale. MNP helped increase Robust Gear’s productivity and implemented new strategies that allowed the business to grow without investing heavily in equipment and expensive software.

Our team of business advisors advised on revenue growth, Lean Six Sigma practices, advanced manufacturing, accounting and tax related issues to drive greater business effectiveness. The end result was a more focused business that has since grown its operations significantly and employed more staff. According to Anjan Tak: “Their team of professionals were instrumental in changing the direction and future of our organization. Their approach encouraged buy-in from the top-down in our business, which made implementation seamless and sustainable.”

How MNP Helps

We assist enterprises drive business growth and long-term value through tailored services to improve their productivity, reduce costs and increase efficiency. Our accounting, technology consulting and tax teams work together with manufacturers to design and implement innovations, improving existing processes and launching new ones. MNP will help address:

  • Legacy manufacturing methods
  • Scaling your business
  • Profitability decline
  • Increased business risks
  • Accounting or tax related issues

For more information on how MNP can help transform your business, contact Yohaan Thommy, Consulting Partner, at 905.220.3211 or [email protected] or Danny Timmins, National Leader, Cyber Security, at 905.607.9777 ext. 230, or [email protected]