Shop Talk: Challenges when running a business
- June 19, 2012
What is the biggest challenge you face running a manufacturing business in Canada?
The biggest challenge is finding skilled help.
Our challenge is to attract smart graduates that have been told by our schools that manufacturing is dead and by the fact that the construction trades offer higher wages than the traditional high level manufacturing position... in our case CNC machinist/ programmers. We have been successful in attracting bright people by utilizing the best available equipment and very interesting and highly intricate components. We have combated the offshoring by automating our processes and employee training. Currently, a substantial amount of our work is for Asia and we have been able to compete directly with China on some high end components.
—Joe Schuster, president, Billet Precision Ltd., Gloucester, ON
In Alberta it’s attaining competent and skilled people for a reasonable cost in order to be competitive in a global market!!
—Chris English, operations manager, Link Manufacturing, Edmonton, AB
Finding capable employees to setup and operate our CNC machines has and will continue to be our #1 challenge. The major market served by Alberta’s machining industry is oil and gas. Typically, the customers we serve in this industry have many similar parts, but a wide range of sizes, thus resulting in small orders. Materials continue to be tougher and tougher (more nickel and other high temperature super alloys) not unlike aerospace. Competition amongst contract manufacturers is fierce, and lead times are typically measured in weeks (3-4 weeks being the norm). As a result, automation is often not practical for the majority of the parts we see, though this is changing with more and more manufacturers offering “built in automation” through more advanced machine tools that can do parts in one operation. Unfortunately, to set up these types of machines is more complicated, thus requiring more skilled programmers, setters, etc.
—Carter Will, P.Eng., president, BRC Engineering Ltd., Calgary, AB
Hope you are keeping well, thanks for reaching out and best of luck with this new initiative.
In response to your question, I would start off by saying that there is more than one major challenge facing manufacturing in today’s market. However, if I had to choose one, I would say competition would likely rank among the most difficult challenges. That is not to say that there are more local businesses entering our sector per se, but the competition base or pool is so much broader in today’s global economy. Our competitors are no longer just down the street or at the other end of town. Our competitors are now thousands of miles away, in countries where employees are paid in a week what our companies pay someone in a day. In many ways, this makes for an uneven playing field. It has forced us to find new and innovative ways of reinventing ourselves, looking into developing new products, new technologies, which are faster, unique, and more efficient, and that offset the side of the competitive business we cannot realistically compete against, such as wage costs, and overhead. This is our new reality, and those management teams who sit back and expect or hope that things will turn soon are mistaken. We need to adapt to the new world economies, conditions, and trends.
—Joseph Manzoli, president, Colourfast Custom Coatings Ltd., Concord, ON