SHOP: What are you expecting in terms of business conditions in 2024?
CERON: The biggest roadblock I hear from industry right now is the fear of a lack of workers and the skills gap. Everyone is a little bit afraid of recession because of cuts but right now most companies don’t have enough employees to even meet the demand that they have. So, if we don’t go into recession and things do ramp up, that’s almost worse if you don’t have the workforce in place. We are seeing lots of money being invested into training programs, into upskilling, and making sure there are enough employable workers even during a recessionary period, so as to plan for a post recession uptick.
SHOP: Economics aside, manufacturing has faced a host of issues in 2023. Heading into 2024 how would you describe the state of the industry?
CERON: The industry is in a very strong growth position. The supply chain issues coming out of COVID exposed a very obvious lack of in-country manufacturing and that brought back a lot of entrepreneurship with new companies looking to fill the gaps that the supply chain issues exposed. That I think bodes well for Canada. We have such a strong supply of resources and such a strong education base for our trades that we really shouldn’t be outsourcing as much as we have been. We should be finding better, more lean, more economically feasible ways to create all our end user products here. It is a bit of a learning curve taking on things that we had gotten used to outsourcing but in the long run creating more in-country products is going to help our manufacturing.
I think we are on the horizon of everything coming together under the auspices of automation and innovation. When we look at education in welding, for so long it was you’re going to go to school, do your three years of apprenticeship and you’re going to be on the shop floor and over time you’re going to climb (the company ladder). But now we’ve opened the door to what welding and the trades are and to be able to say you can be an engineer in welding, you can have a doctorate in welding, you can be a part of this industry that has such a bright future, and you don’t have to be pigeonholed into a specific role. Whatever dream you have there is a parallel career to that in the welding field. This piece which has been missing for so long is what’s going to bring it together because you’re going to have people coming in to support the trades on the floor but you are also going to have people coming in from the universities to support the robotics, and the lean management, and value stream mapping, and all these things that had previously been reserved for other industries but are here now. They’re part of the manufacturing process and necessary if we are going to compete against the offshore companies. To be on par with them we really need to embrace the idea that we need everyone on base and every tier filled from the highly technological to the highly skilled on the shop floor. We have great colleges now that are really pushing the weld technicians, the weld engineers, and lasers and robotics. We are being leaders in these areas.
SHOP: Investing in technology is critical but interest rates are high and may continue to remain high for another year or longer. Are you seeing a reluctance to invest in technologies because the initial investment is now higher due to the higher interest rates?
CERON: The new starts are going to invest regardless of timing. Established companies are going to be reluctant to expand or may temper their growth based on the upward trend in interest rates. But what the higher interest rates are pushing companies to do is to look at collaboration. You are going to be seeing a lot more in the future of companies looking to collaborate with other partners to offset expenses. The monolithic companies of the 1990s that would just grow to massive proportions are not as feasible now with the kind of economy that we have. We are seeing companies who want to get into a particular field they are not experts in, rather than recreating the wheel, looking for experts to partner with to create opportunities without taking on extra risk. That’s maybe something we should have started doing 20 years ago but it’s starting to happen now, and I think it’s good because we are seeing the empowerment of industry spread wider and creating more opportunities.
This does create more pressure on small companies which are more restricted in terms of investments. The bridge that I see coming between those two issues is that the cost of technology is coming down. As we use more technology and have more of it within the country, it starts to bring the price of technologies such as robotics down to the tens of thousands of dollars. It becomes an investment which is less than the salary of an employee, which is often how small companies tend to look at it.
SHOP: What’s your advice to our readers as they prepare for 2024?
CERON: Look for collaboration. Look for the companies around you whose expertise you can leverage to take on bigger projects and technologies. Keep your ear to the ground for opportunities to improve the way you do business and interact with your customers, staff, and suppliers. The steps to advancement are not as big and scary as we used to think. Think small steps and keep moving forward and you will be fine. And use your associations and resources to stay up to speed on the pulse of what’s happening.