PLNT02_2010

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Volume 69, No. 02 March 2010

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Manufacturers are seeing the light

HIGHLIGHTS Using lean leads to green Boost morale, boost productivity Smart sensors make smarter robots Canada gets a D in innovation

11 14 19 17

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Editorial

Don’t blame lean

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11

T

he owner of a beloved 17-year old Saturn was in the market for a new vehicle. The car was still road worthy but some expensive repairs were on the horizon. It was time to move on, but to what?

Our driver would have liked another Saturn but the brand has been dumped by General Motors (so much for loyalty), so he conducted some rudimentary research to check out what the other guys have to offer. He’s a cautious fellow. Only after months of online trolling and plenty of networking did our nervous customer give several compacts a look-see, but decided to focus on trusted Japanese brands, specifically Toyota.

The reason: perceived value thanks to great engineering, high quality and a well-earned reputation for trustworthiness.

What a time for Toyota to meltdown. Massive recalls, including its trusted Corolla.

Floor mats, sticking accelerator pedals, brake issues, eight models affected in one way or another. Oh my, says the spooked car buyer who headed for the nearest General Motors dealership to sign an incentive-loaded deal on a Chevrolet Cobalt.

So what happened to the world’s greatest automaker?

Some are quick to blame Toyota’s religious devotion to lean manufacturing. The Wall Street Journal suggested eliminating waste by using common parts and platforms and making heavy cuts to the supplier base to achieve cost savings also introduces risk.

Various lean experts cite Toyota’s preoccupation with becoming the world’s biggest automaker, which resulted in too much expansion, too fast and for a goal that’s of no interest or value to the customer.

And crisis management consultants have weighed in, saying Toyota’s growth outpaced its management structure: the mechanisms weren’t in place to identify and deal with the problems before they blew up into a worldwide debacle.

Should manufacturers be leery of lean production? Certainly not.

The lesson manufacturers must glean from Toyota’s misfortune is to ensure management and sustainable process improvements are aligned.

Lean guru James Womack of the Lean Enterprise Institute said modern managers are focussed on accountability, setting goals for results and providing incentives to meet them or punishments for failing. This is adverse to sustainable process improvement.

He recommends a dialogue about how to merge the management systems with sustainable process improvement. Points to cover include: • How does the system engage and align people to determine which problems are most important?

• How does it tackle the important issues facing the organization, solve problems and evaluate proposals from the bottom up?

• How does it create basic stability across the organization, with standardized work and management at every level?

• How does it create the next generation of lean managers and convert the current generation of modern managers to lean management?

Perhaps Toyota would benefit from some waste reduction and realignment along the lines Womack suggests. Its reputation is bruised but a culture of waste reduction, continuous improvement and a focus on the needs of the customer has served it well though the decades. This culture will sustain Toyota through its period of crisis.

As for the former Saturn owner, he was enjoying his new Cobalt until GM recalled it and 250,000 other cars to fix a power steering problem.

Joe Terrett, Editor Comments? E-mail joe.terrett@plant.rogers.com.

Vol. 69, No. 02, March, 2010 Editor: Joe Terrett 416-764-1546 joe.terrett@plant.rogers.com Features Editor: Noelle Stapinsky 416-764-1449 noelle.stapinsky@rci.rogers.com Contributing Editors: Ron Richardson, Steve Gahbauer Art Director: Kathy Smith 416-764-1542 kathy.smith@rci.rogers.com Junior Web Producer: Jessica Mirabelli 416-764-1316 jessica.mirabelli@rci.rogers.com Director of Sales, Marketing and Customer Service: Laura Goodwin 416-764-1492 laura.goodwin@rci.rogers.com District Sales Manager: Dean Walter 416-764-1776 dean.walter@rci.rogers.com Advertising Representative: Jason Lofkrantz 416-764-1521 jason.lofkrantz@rci.rogers.com

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Canadian PLANT Fax: 416-764-1742 Circulation Manager: Celia Ramnarine 416-764-1451 deokie.ramnarine@rci.rogers.com Production Manager: Jennifer Reinhardt 416-764-3919 jennifer.reinhardt@rci.rogers.com Executive Publisher of the Industrial Group, BPPG: Tim Dimopoulos 416-764-1499 tim.dimopoulos@rci.rogers.com Rogers Media Inc. President and CEO: Anthony P. Viner Rogers Publishing Limited President and CEO: Brian Segal Senior Vice-President Business & Professional Publishing: John Milne Senior Vice-Presidents: Marc Blondeau, Michael Fox Vice-Presidents: Immee Chee Wah, Patrick Renard Editorial Advisory Board: Robert Hattin, Edson Packaging Machinery • Ron Harper, Cogent Power • Greg MacDonald, Wentworth International Services • Roy Verstraete, Anchor Danly Subscription Department: For subscriptions services e-mail: rogers@cstonecanada.com 416-932-5071 Fax 416-932-1620 Outside Toronto 1-866-236-0608

13

18

Features

>> Sustainability

9 Solar Power Manufacturers plug into Ontario’s developing solar market.

10 Automotive expertise pays of in energy market for Woodbine Tool and Die Mfg.

Green Manufacturing Maintain employee engagement in greenprojects with meaningful metrics.

>> Operations

11 Case history Cogent Power finds lean drives green and it pays off.

12 Think Lean Revving up your parts velocity accelerates value.

>> Management

13 Retirement Start planning your exit strategy now if you plan to sell your business and retire.

14 Motivation Is post-recession productivity sluggish? Boos t employee morale.

15 Tax Strategy Six tax issues to cover when winding up operations.

>> Innovations

16 Patents What you should know about securing intellectual property 17 Report card Canada gets a D for its innovation performance.

>> Technology

18 Vision Sensor A Windsor University student develops a sensor that will extend automation.

Plantware 3D scanning software

19 Tech Tip Diagnostics save you money on motor repairs.

>> Trends

20 Forestry The industry seeks salvation in the Bio-Age.

Departments

4 Industry View 6 Careers, Bulletins, Events 7 PLANT Pulse

Mail: Canadian PLANT, Circulation Dept. 7th Floor, One Mount Pleasant Road, Toronto ON M4Y 2Y5 Subscriber Services: To subscribe, renew your subscription or to change your address or information, please visit us at www.rogersb2bmedia.com/plnt. Mail Preferences: Occasionally we make our subscriber list available to reputable companies whose products or services may be of interest to you. If you do not want your name to be made available, please contact us at rogers@cstonecanada.com or update your profile at www. rogersb2bmedia.com/plnt.

Canadian PLANT—established 1941, is published by Rogers Publishing Limited, a division of Rogers Media Inc., One Mount Pleasant Road, Toronto, Ontario, M4Y 2Y5. Montreal Office: 1200 avenue McGill College, Bureau 800, Montreal, Quebec, H3B 4G7. Subscription Price: Canada $69.00 per year, Outside Canada $141.00 US per year, Single Copy Canada $5.50. Plant is published 8 times per year except for occasional combined, expanded or premium issues, which count as two subscription issues. Printed in Canada, contents of this publication are protected by copyright and must not be reprinted in whole or in part without permission of the publisher. Publications Mail Agreement #40070230 R10814. Return undeliverable items to: Canadian PLANT Circulation department., 8th Floor, One Mount Pleasant Road, Toronto ON M4Y 2Y5. U.S. periodicals registration no. 0010-881 at Lewiston, N.Y. US Postmaster: Send address changes to Rogers Media, PO Box 4541,

8 Labour Relations 21 Product Showcase 22 Postscript

??

Buffalo, New York, 14240, USA Performance claims for products listed in this issue are made by contributing manufacturers and agencies.

No responsibility for the accuracy of these performance claims can be assumed on the part of Canadian PLANT or Rogers Media and its agents or distributors. Contents copyright© 2010 by Rogers Publishing Limited, may not be reprinted without permission.

Canadian PLANT receives unsolicited materials (including letters to the editor, press releases, promotional items and images) from time to time. Canadian PLANT, its affiliates and assignees may use, reproduce, publish, re-publish, distribute, store and archive such unsolicited submissions in whole or in part in any form or medium whatsoever, without compensation of any sort. This statement does not apply to materials/pitches submitted by freelance writers, photographers or illustrators in accordance with known industry practices. Our environmental policy is available at www. rogerspublishing.ca/environment. We acknowledge the financial support of the Government of Canada through the Publications Assistance Program (PAP) towards our mailing costs.

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ISSN 0845-4213

Canadian PLANT 3

>> Industry View

>> PLANT Online Live links There’s something new on Canadian PLANT’s weekly e-newsletter. We’re testing live headline links that take you directly to the news story. Another version takes you down the page to a news summary and link to the story. Check it out.

• Go to www.plant.ca • ABOUT US/Print Subscription • Scroll down to the PLANT logo • Click on the mouse icon • Select register/check Online Access

Click on Community The PLANT web site is your go-to for research and reports. Click on Research and download these reports: • The Real Have-Nots In Confederation: British Columbia, Alberta and Ontario.

• Future Bio-pathways Project (see Trends, page 16) • Leaner product portfolios increase profitability And be sure to go to www. plant.ca throughout the week for daily news updates from PLANT staff and Canadian Press.

Manufacturers’ concerns Respondents to PLANT’s Outlook: 2010 survey are most concerned about: • staying in business (17%) • increasing sales (15%) • financing issues (7%) • the fluctuating dollar (6%) • controlling and reducing costs (6%) • staffing (4%)

SNC to supports Plasco plants KANATA, Ont.: Plasco Energy Group Inc. has selected SNC-Lavalin Inc. to support the design and construction of commercial facilities based on Plasco’s proprietary waste-to-energy conversion system.

Plasco Energy’s process converts municipal solid waste into syngas that is scrubbed into a cleaner PlascoSyngas used to fuel internal combustion engines that efficiently generate electricity.

The company is developing its first commercial plants in Red Deer, Alta. and Ottawa.

Industrial boost for G Plus ROUYN-NORANDA, Que: The federal government has delivered $160,158 in repayable funding to G Plus Industrial Plastics Inc. This financial assistance, through the federal Business and Regional Growth program, will enable the Abitibi-Témiscamingue firm to acquire new equipment, such as a digital cutting table and moulds, to develop new products and implement a commercialization strategy outside of the province to expand its customer base.

G-Plus said the project will add four new jobs to the its current 12-person workforce.

The manufacturer of plastic industrial products for the mining sector has been conducting research and development to create alloy materials capable of replacing steel. The substitutes, which the firm has already introduced to the market, are lightweight and resistant to chemicals, impact, wear and corrosion.

Bell Helicopter’s 429 model for corporate, utility and emergency markets.

Avior secures $35M helicopter deal LAVAL, Que.: Bell Helicopter Textron Canada Ltd. has awarded Avior Integrated Products Inc. a US$35 million, multi-year contract to supply structural assemblies for the new 429 Helicopter.

Avior, a supplier of lightweight structural assemblies for the aerospace industry, will manufacture the engine cowl structure, which includes multiple lightweight hybrid assemblies using advanced composite materials and aluminum.

The composite work will be performed at Avior’s Granby facility and the metal fabrication will be done at its assembly facility in Laval.

The company has already doubled its clean room production space, added new inspection and process technology and recently installed an additional 8- x 26-foot autoclave.

Avior said the contract is expected to create 60 new skilled jobs.

The Model 429 program is Bell Helicopter’s most advanced

PHOTO: BELL HELICOPTER

Departments

IFR-certified light twin-engine helicopter for emergency, corporate and utility markets.

Bell Helicopter Textron Canada, a Bell Helicopter affiliate, manufactures Bell’s commercial helicopters at its 656,600-squarefoot Mirabel facility.

Solar film growth venture formed VANCOUVER: Natcore Technology Inc. is forming a joint venture company with a consortium in China to develop and manufacture film-growth equipment and materials used in solar cells.

Vancouver-based Natcore, sole licensee of a thin-film growth technology developed

by Rice University in Houston, and Zhuzhou Hi-Tech Industrial Development Zone will form Natcore China to manufacture anti-reflective film growth equipment and materials using Natcore’s proprietary liquid phase deposition.

Natcore’s technology grows thin films of silicon dioxide—a fundamental building block in solar cells—in mild chemical baths using standard, low-cost

equipment, which enables roomtemperature growth of various silicon oxides on silicon wafers.

This technology could enable silicon solar cell manufacturers to significantly reduce manufacturing costs and increase throughput.

The company says it has the potential to allow for the first time mass manufacturing of super-efficient tandem solar cells with double the power output of today’s most efficient devices.

EDC backs Thermo Design’s Russian deal OTTAWA: Export Development Canada (EDC) will provide a US$48 million loan to Russia’s Gazprombank bank to finance the purchase of systems manufactured by an Edmontonbased manufacturer that capture and process flared gas.

Gazprombank will provide the direct financing to the project operator (ObGasProcessing, CJSC, a subsidiary of Monolit LLC, member of the Roza Mira Group) to purchase the equipment from Thermo Design Engineering Ltd. Its systems will allow the operator to capture flare gas at a production site in the KhantyMansiysk Autonomous Region, an important area for oil and gas exploration and production in Russia.

As of Jan. 1, 2012 Russian legislation will require the complete elimination of flared gas at hydrocarbon production sites.

The processing equipment, which makes extensive use of waste heat recovery and a stateof-the-art control system, will be fabricated in Canada.

>> PLANT Off-site

Phil Hines, general manager of Kost Klip Manufacturing in Port Coquitlam, BC, stopped for a PLANT break at a spot overlooking the ancient Monasteries at Meteora in Greece.

Appear in PLANT Off-Site and win $50! Have a photo taken of you reading PLANT in a remote, interesting or exotic location.

Send photos with name, title, company, address and phone number to Off-Site, Canadian PLANT, One Mount Pleasant Rd., Toronto, Ont. M4Y 2Y5. Sorry, we can’t return them. Digital photos should be 5x7 inches and 300 dpi. Send them to joe. terrett@plant.rogers.com.

4 Canadian PLANT

March 2010

Our lifestyle approach to sustainability 1 Product Design We strive to design products that reduce consumption across the whole lifecycle.

2 2

6 Final Disposal

Raw Materials

Innovative products combined with reliable dispensing mean you can reduce how much gets used, wasted and thrown away.

We are committed to responsible sourcing of raw materials and ensuring the sustainability of the fiber we use.

We strive to use less of the world’s resources so there’s more left for the future.

5

3 Use

Manufacturing

Our high performance products and systems aim to help customers reduce their usage.

We invest in new technology and process improvements to reduce the use of natural resources and waste from manufacturing.

4 Transport We continue to develop more efficient ways of packing, handling and transporting our products to reduce the impact of their distribution.

Reduce Today, Respect Tomorrow* is the KIMBERLY-CLARK PROFESSIONAL* approach to sustainability. It begins with the understanding that the way we use resources today shapes the world of tomorrow. And it has led us to focus on reducing consumption at every stage of the product lifecycle – from design and manufacture to distribution and disposal. Reduction is the key to lowering the environmental impact of our activities as well as those of customers.

To learn more about Reduce Today, Respect Tomorrow* and how we can reduce consumption in your business, visit www.kcpreducetoday.com/us/ca ®/*Trademarks of Kimberly-Clark Worldwide, Inc. or its affiliates. Marques deposees de Kimberly-Clark Worldwide, Inc. ou de ses filiales. ©2010 KCWW. K01773 K3885-10-01

Departments

>> Industry View

>> Careers

>> Bulletins

MC Machinery Canada in Mississauga, Ont. has appointed Darren Carroll as the direct sales manager for Mitsubishi product lines in Canada.

Raydan Manufacturing Inc., an Edmonton-based manufacturer of specialized suspension and coupling systems for trucks, trailers and heavy equipment, has shut down its wholly owned Ontario subsidiary.

Dave McAnerney replaces David Lynn as president and CEO of Sun-Rype Products Ltd., a Kelowna, BC fruit juice and snack manufacturer. McAnerney Darren Carroll joined the company in 2005 and served as vicepresident of operations and human resources before taking over as acting president and CEO in 2008.

Magma Energy Corp., a Vancouver-based geothermal power company, has appointed Catherine Hickson vice-president of exploration and chief geologist, and Andrea Zarakic vice-president of operations and development. Hickson heads up all of Magma’s international exploration activities and Zarakic leads the geothermal development projects.

A Northland Power Income Fund has entered into a 20-year power purchase agreement with the Saskatchewan Power Corp. to build and own a new natural-gas-fired power plant that will provide baseload power to the province’s energy system.

The 261 megawatt combined-

cycle plant will be built near North Battleford. Total cost of the project is $700 million.

Jana Laboratories Inc., a piping systems technology firm, will act as an authorized testing facility for CSA International, the Canadian-based testing and certification firm. Jana, based in Aurora, Ont., will manage applications for the certification of plastic pipe, fittings and assemblies for pressure applications.

COM DEV International Ltd., a Cambridge, Ont.-based manufacturer of space hardware subsystems, has been awarded

a US$6 million contract to supply an unnamed customer with switches, filters and multiplexers for a commercial communications satellite. The company expects to complete work within the first half 2011.

MTI Global Inc., a manufacturer of cellular materials (such as silicon) based in Mississauga, Ont., has been selected by C&D Zodiac to supply a thermal and acoustic insulation system for the new Bombardier CSeries aircraft. Bombardier has 90 firm orders and an additional 90 options for the 100- to 149-seat aircraft.

>> Events Better Physical Asset Management C-More April 12-16, Toronto Improve your reliability decisions. Centre for Maintenance Optimization and Reliability Engineering (C-More) at the University of Toronto presents a five-day learning experience that will help maintenance pros cut costs, reduce interruptions, anticipate and spot trouble, and achieve greater output.

Visit www.utoronto.ca/april.

Micromanufacturing & Nanomanufacturing Conference SME April 14-15, Phoenix Hosted by the Society of Manufacturing Engineers (SME), the conference provides ideas to improve micromanufacturing.

Nanomanufacturing will look at the latest applications and trends in top-down fabrication and bottom-up assembly techniques.

Visit www.sme.org/micro and www.sme. org/nanomanufacturing.

Superior 2010 Health & Safety Conference, Trade Show IAPA, OSSA, FSA April 20-21, Sault Ste. Marie, Ont. Presented by the Ontario Service Safety Alliance (OSSA), Industrial Accident Prevention Association (IAPA), Farm Safety Association (FSA). Thirty-two concurrent sessions addressing changing legislation, emerging issues affecting your company and innovative solutions to reduce injuries in your workplace. Visit www.iapa.ca or call (800) 406-4272.

World Tooling & Machining Conference ISTMA June 20-24, Windsor, Ont. This is the 13th annual meeting of the International Special Tooling and Machinery Association (ISTMA) and the 11th International Pattern-Model Makers Congress. The world event, hosted by the Canadian Tooling and Machining Association (CMTA) and the National Tooling and Machining Association (NTMA) in the US, will explore global opportunities for special tooling and machining companies. Visit www.istma.org/istma-world.

6 Canadian PLANT

March 2010

Economy << Departments COMPOSITE LEADING INDICATOR smoothed % change 1.6 1.2 0.8 0.4 SOURCE: STATISTICS CANADA

0.0 0.4 -0.8

ECONOMIC DEVELOPMENTS AND TRENDS

-1.2 -1.6

2008

US growth capital-intensive 130

2.2

130

2.1

130

2.0

130

1.9

130

1.8

2007

2008

2009

0.0

2007

2008

2009

50 48

Current dollars 2002 Constant dollars 0.2

0.4

0.6

0.8

1.0

PLANT STAFF

trend that will hinder Canada’s competitive position in the post recession economy,” says Benjamin Tal, senior economist at CIBC. Indeed, most of the growth in US manufacturing over the past year has been capital intensive and has helped power industrial output, but without a corresponding rise in employment. Meanwhile, labour intensive sectors continue to lose ground.

The report says Canada’s industrial production has stabilized and manufacturing in capital-intensive sectors has also outpaced activity in labour intensive sectors.

But the average capital intensity is 40% lower. Canada’s dependence on labour will mean more job growth as the economy recovers to meet demand, even with a stronger dollar. But given the increased prevalence of better-capitalized and more efficient production facilities stateside, Tal says Canadian manufacturers will find it even more difficult to compete when the dust settles.

www.plant.ca

42 40 38

Current dollars

36

2002 Constant dollars

34

Comments? E-mail joe.terrett@plant.rogers.com.

DJ 2005

* thousand US$ per worker

Average intensity in Canada’s manufacturing sector is 40% lower Source:capital Statistics Canada than in the US.

T

44

1.2

Source: Statistics Canada Manufacturing in high capital-intensive sectors has increased over labour intensive sectors.

he recovery appears to be coming along nicely and profits are up, even for manufacturers, according to Statistics Canada’s latest economic reports.

It reported 1.2% growth in real GDP during the final quarter of 2009, a 5% jump from a year earlier.

Canadian corporations profits increased 7.9% ($4.4 billion) during the fourth quarter to $60.1 billion and manufacturing’s share was up for a third consecutive quarter at $11.2 billion, an increase of 4.4 per cent.

Although Canada is adding more manufacturing jobs than the US as the economy recovers, the gains may not last. An Economic Insights report from CIBC World Markets notes manufacturing sectors on both sides of the border are showing signs of life but the improvement in the US is stronger and more capital intensive, which is creating a “radical restructuring” of industry.

And producing much more with less labour is “a

46 SOURCE: STATISTICS CANADA

2.3

2002 Constant dollars

52

J

J

2006

2007

J 2008

D 2009

Source: Statistics Manufacturing salesCanada rose 1.6% to $43 billion in December, the sixth increase in seven months.

INDUSTRIAL PRICES index (1997=100) 130 125 120 115

SOURCE: STATISTICS CANADA

130

Current dollars

54

SOURCE: INDUSTRY CANADA, CIBC

2.4

SOURCE: INDUSTRY CANADA, CIBC

130

C$8n, SAAR

$ billions 56

Wood Paper Petroleum and coal Primary metals Transportation equipment Chemical Non metallic Food, Beverage, Tobacco Furniture Textile Plastics and rubber Printing Electrical equipment Fabricated metal Wholesale Apparel and leather Computer and electronic Misc manufacturing Machinery Average

2010

MANUFACTURING SALES

Capital intensity* ratio Canada to US

Manufacturing Activity: ratio of high to low capital intensity sectors

2009

Source: Statistics Canada The composite index rose 0.9% in January driven by eight of the 10 components. Both components on the decline were related to manufacturing.

CANADA LAGS US IN MANUFACTURING CAPITAL INTENSITY

CANADIAN MANUFACTURING STABILIZING Industrial production

M J J A S O N D J F M A M J J A S O N D J

110 105 100

Industrial product price index (PPI) IPPI excluding petroleum and coal products J

J 2007

J 2008

J 2009

2010

Industrial product prices rose 0.3% in January, an improvement over Source: Statistics Canada December’s 0.1% increase but still behind a 1% gain in November.

Canadian PLANT 7

Departments

>> Labour Relations

Don’t buy into the Buy American exemption

By Ken Lewenza

A

s if proroguing Parliament for the second time in less than a year wasn’t a clear enough message to Canadians that they have no control when it comes to setting their country’s priorities and agenda, the Buy American exemption deal further demonstrates the Conservatives’ disdain for the principles of democracy.

This significant trade agreement was negotiated behind closed doors and announced during a parliamentary shut-

no guarantee that a single job in Canada “willThere’s result from this agreement... ” down without any debate or an opportunity for dissent from the opposition, or any input at all from Canadians.

The deal promises to level the playing field for Canadian businesses and workers by providing equal access with US companies to bid on economic stimulus projects south of the border that would otherwise be subject to made-in-the-USA restrictions. It also affords Canada a “fasttrack” approach to solving future disputes

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arising from Buy American clauses on public spending.

The Conservatives are boasting that it will “preserve and create Canadian jobs,” although the doling out of US stimulus project funding ended less than two weeks after the deal was struck.

There’s no guarantee that a single job in Canada will result from this agreement, but it may have severe consequences for workers by preventing governments from

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managing and directing public spending projects in the future.

In exchange for access to US stimulus funds, provinces, territories and many municipalities may now become parties to the World Trade Organization Agreement on Government Procurement (GPA). This would be the first instance of sub-national governments in Canada becoming party to a major multilateral international trade agreement.

All Canadian companies get in return is the chance to bid on publicly funded construction and infrastructure projects in 37 US states on par with companies in the EU, Japan, Korea, Singapore and many others.

And by signing on to the WTO, municipal and provincial governments open themselves up to the same level of ruthless global competition when the time comes to spend public funds on big-ticket infrastructure and supply projects at home. These lucrative contracts are huge economic drivers and often create thousands of local jobs, return millions in tax revenues and promote regional economic development.

Up for grabs Local content rules, environmental regulations and safety standards are all up for grabs under the WTO rules, which would limit the ability of government and citizens to control how tax dollars are best spent.

Consider the landmark $1.2 billion light rail transit project in Toronto. It involved important domestic content provisions and will generate tremendous economic activity at local, provincial and national levels. Would this deal have been struck down under new WTO rules?

Worse still, there are no guarantees of access to US procurement markets after the stimulus funding has dried up.

Long-standing Buy American legislation still exists and will continue to govern federally funded projects, whether they are in construction, transit infrastructure development or shipbuilding, well into the future. And there’s nothing wrong with that approach. In fact, it’s high time our federal government followed the Quebec, Ontario and Toronto leads in establishing strategic Buy Canadian policies that cover major public purchases.

Instead, the Harper government has sold Canadians a bill of goods.

Until the public can exercise its democratic right to vote this government out of office, the Conservatives will continue to plow ahead with their own corporate, free-market agenda, no matter what the cost to Canadians.

Ken Lewenza is the president of the Canadian Auto Workers Union, which represents 225,000 Canadian workers.

E-mail cawcomm@caw.ca.

Comments? E-mail joe.terrett@plant. rogers.com.

8 Canadian PLANT

March 2010

Solar Power << Sustainability

Here comes the

Day4 technician examines a photovoltaic cell.

Day4 catching rays in Australia BURNABY, BC: Day4 Energy Inc. has signed a distribution agreement with an Australian company that will cover the Australian, New Zealand and Oceania markets.

Regency Solar, a supplier of solar energy products and systems based in Melbourne, will focus on providing its customers with solar energy solutions based exclusively around Day4 solar module technology.

This is the first foray into the region for Day4, a Burnaby, BC-based manufacturer of high performance photovoltaic solar technology for residential, commercial and utility scale installations.

The first shipment of Day4’s high performance 48MC modules to Regency Solar was completed immediately upon the signing of the agreement.

Hydrogenics powers boat project MISSISSAUGA, Ont.: Hydrogenics Corp. has won a contract to supply the United Nations Industrial Development Organization with six HyPM HD8 fuel cell power modules for a boat project coordinated by the International Centre for Hydrogen Energy Technologies in Istanbul, Turkey.

Hydrogenics, a developer of hydrogen and fuel cell systems based in Mississauga, Ont., will also supply carbon composite hydrogen storage tanks and components, other auxiliaries and spare parts for two years of operation.

BIOREM focuses on VOCs, biogas GUELPH, Ont.: BIOREM Inc. is expanding its volatile organic compounds (VOCs) and methane (biogas) emissions business in the industrial market.

The Guelph, Ont.-based manufacturer of emissions control systems said both industrial applications combine for an annual $400-million market in the US alone.

Solutions currently available to clean VOC and methane emissions from air streams, such as thermal oxidizers, chemical scrubbers and iron sponges, are nonbiological in nature and generate additional greenhouse gases or harmful byproducts during the cleaning process.

BIOREM’s new bio filtration medias and processes, which will be applied to both applications to handle the high concentrations of contaminants, are currently being validated using prototype units now operating at a compost facility, automotive plant and a Brownfield superfund site in the US.

www.plant.ca

SUN

Ontario’s feed-in tariff attracts solar projects and manufacturing investment

By Noelle Stapinsky, Features Editor

T

he race is on in Ontario to lock down land and rooftop leases for solar panel installations where the provincial government is offering attractive guaranteed rates for the energy they produce, but the one glitch many eager renewable energy companies are plagued by is the lack of suppliers.

As part of Ontario’s Green Energy Act, the Ontario Power Authority has introduced a renewable energy feed-in program (FIT), North America’s first comprehensive pricing structure for renewable electricity production. The program is intended to phase out coalfired electricity generation, boost the development of renewable energy technologies and create new green industries and jobs.

But to benefit from the FIT program, companies have to meet its 50% content requirements, meaning half of all materials, such as converters, cables, solar panels and labour, must be sourced from within the province.

This represents an opportunity for Toronto-based Hybridyne Power Systems Canada—a subsidiary of Atlantic Wind and Solar Inc.­—which specializes in international sales and installation of hybrid wind and solar renewable energy systems. Hybridyne had tentative plans to manufacture wind turbines in Newfoundland, but is now looking at Ontario.

“There are not very many companies in Ontario right now that can meet these requirements and a lot of people are scrambling to start manufacturing panels and wind turbines here,” says Brent O’Connor, investor relations for Atlantic Wind and Solar.

The company is already racking up orders. It recently announced a solar energy park installation in Newcastle, Ont., about 80 kilometres north of Toronto.

And photovoltaic solar panels supplied

by Burnaby, BC-based Day4 Energy Inc. will be installed on 10 acres of land to produce 2 megawatts of power, enough to power 360 homes.

“This will be the largest [project] of its kind for a Canadian company and also for a Canadian solar panel manufacturer,” says O’Connor.

The Day4 order also included an additional 3.1 megawatts of solar panels destined for rooftop installations in the Toronto area.

Although Hybridyne will not disclose which buildings will get the additional panels, O’Connor says that 1.23 megawatts of the order will be used on six roof tops it has secured with Remington Group, an Ontario real estate developer.

Hybridyne has also formed an alliance

PHOTOS: DAY4

PHOTOS: DAY4

>> Clean Tech

Day4 rooftop solar modules being installed at Aster Holzbau, a wood products manufacturer in Jenesien, Italy.

with Cushman and Wakefield, one of the largest privately owned commercial realtors in North America.

“We have another 100 [roof top] projects in the pipeline; 30 are about to close and six have already closed,” says O’Connor.

Attracting private capital The upside for Day4, which exports about 95% of its products to Europe, is that it’s finally getting an opportunity to grow its Canadian market.

“Now that Ontario has a performancebased subsidy, [the province will] increase the amount of renewable energy in its electrical system,” says John MacDonald, CEO of Day4. “This type of subsidy attracts private capital.

You make money generating electricity and you don’t burden the taxpayer, you burden the ratepayer.”

The new solar FIT rates for Ontario will be 80.2 cents per kilowatt hour for any solar photovoltaic cell producing

Get FIT Ontario says its feed-in tariff (FIT) program offers renewable energy providers stable prices under long-term contracts for energy generated from: • biomass • biogas • landfill gas • on-shore and off-shore wind • solar photovoltaic • water power Visit http://fit.powerauthority.on.ca. You can also download version 1.1 of the OPA Feed-in Overview at www.plant.ca. Click on COMMUNITY, then RESEARCH.

less than 10 kilowatts, compared to the old rate of 40 cents per kilowatt hour.

Germany has had a similar scheme in place for about 10 years. “Today, they have the largest percentage of renewable generation on their grid of any other country in the world. The average incremental cost to the German ratepayer is a little over three euros a month— the price of a cup of coffee,” says MacDonald.

Hybridyne claims that combining its advanced inverter technology with the Day4 solar modules to convert direct current energy from the sun into usable alternating current electricity provides up to 30% more kilowatt-hours of electricity than conventional inverter technology. And Day4’s panel technology also works well during Ontario winters.

“Some panels [produced in Asia] will lose up to 5% efficiency per year. Day4 might lose one per cent,” says O’Connor.

“The feed-in tariff program’s power purchase agreement is put in place for 20 years and we need a panel that’s going to perform for that range.”

The Ontario government’s goal is to generate 10,000 megawatts of power from the FIT program. This spells “opportunity” for Ontario manufacturers.

But they better move fast. Companies from the other provinces are also looking for real estate and existing facilities to get a piece of the action.

Noelle Stapinsky is the features editor for Canadian PLANT and Canadian Manufacturing.com. E-mail noelle.stapinsky@rci.rogers.com.

Comments? E-mail joe.terrett@plant. rogers.com.

Canadian PLANT 9

Sustainability

>> Solar Power

>> Green Manufacturing Use meaningful metrics

PHOTO: WOODBINE

Menova solar panels maintain a 90-degree angle facing the sun.

Woodbine taps into

solar power

Automotive expertise pays off in growing energy niche

T

he sun is shining on Woodbine Tool and Die Mfg. The tier two supplier to the automotive industry was approached by Menova Energy Inc.— an Ottawa-based solar energy solution provider—to enter into a solar panel manufacturing partnership.

Established in 1979 as a three person, 5,000-square-foot tool and die shop, the Markham, Ont.-based company has since grown into two facilities employing 195 people—50,000 square-feet for tooling and a 150,000 square-feet manufacturing.

Woodbine supplies a variety of dies, stampings and assemblies to tier one companies such as Magna International Inc., Van-Rob Stampings Inc., Martinrea International Inc. and the ABC Group Inc. But its competitive advantage is building and running tooling that performs extrusion and in-die tapping.

If someone wants a multi-dimensional

bracket with three to five different fasteners on it to attach bolts or other parts, the treading would normally have been done in a secondary process. Woodbine adds the threading during the progressive stamping process, cutting costs and improving quality.

Woodbine has perfected a die built process that uses original part material and extrudes it out to the necessary fastener diameter and height. “After extruding, we roll tap the actual threads to it at the speed of up to 30 strokes per minute.

This saves an extra cost of separate fasteners and their installation for our customers,” says Max Popov, the company’s head of business development.

Developing novel processes—and the staff to make them work—has positioned Woodbine as a preferred outfitter for solar panel manufacturing.

“Menova was looking for an automotive

Ergonomic Products Lift & tiLts

By Brett Wills

A

s the old saying goes: What gets measured gets managed, but when it comes to green initiatives, you need to veer away from traditional metrics.

Green metrics are not easy to relate to because of the units used. What does reducing energy use by 1,000 kilowatt hours actually mean? When employees have a hard time relating to the metric, they lose motivation, which becomes a drag on a green project’s momentum.

To maintain employee engagement, use metrics that are easy to relate to. Here are four examples: 1. Translate kilowatts per hour into household terms, such as the annual energy consumption of a computer or television. An energy reduction program would be stated in the number of computers or televisions unplugged.

2. Translate carbon dioxide into pollution caused by a car over one year. You can easily determine how much carbon dioxide a tree sequesters. Instead of measuring carbon footprint reduction programs in metric tonnes of carbon dioxide, measure by how many cars have been taken off the road, or by the number of trees planted.

3. Use swimming pools or bottles to illustrate water savings in litres or gallons.

4. Convert metric tonnes of garbage into elephants, cars or the weight of a product made by your company.

Using meaningful metrics tangibly demonstrates the impact of your green program and goes a long way towards sustaining gains.

company that could bring automotive expertise to manufacture its solar systems to tight engineering standards,” says Gunter Riegel, co-owner of Woodbine.

Menova’s Rack’n Track product line consists of all-aluminum rooftop or groundmount solar tracking systems mounted on a circular structure that follow the sun’s movement throughout the day for optimal energy absorption. Unlike conventional solar panel setups, these systems maintain a 90-degree angle facing the sun, increasing efficiency by 25 per cent.

Transition to solar “The systems use a GPS locator to connect to a smart system, which knows what time of the year it is and what position the solar panels need to be in at each point in time,” says Popov.

The manufacturing and assembly of these units will be done at Woodbine’s manufacturing facility. Some new machinery was needed to process the structured aluminum, but Riegel says the transition to solar manufacturing was quiet easy.

It was mostly about the mindset of the employees and making sure the solar part of the business was built to the same high standard as the automotive production.

“We have trained our operators to work with aluminum extrusions and tubes, re-tooled a couple robotic cells to weld some of the solar tracks components, and we sent personnel to specialized training in order to become more proficient in aluminum welding,” adds Popov.

And with production scheduled to start later this year, Riegel predicts the solar part of the business will account for about 30% of the company’s revenues.

—Noelle Stapinsky

Brett Wills is the director of the Green Enterprise Movement and a senior consultant with High Performance Solutions in Cambridge, Ont. He is also the author of Green Intentions: Creating a Green Value Stream to Compete and Win, published by Productivity Press.

Contact him at bwills@hpsinc.ca.

Comments? E-mail joe.terrett@plant. rogers.com.

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Lean leads to

green Kaizen events reduce Cogent’s carbon footprint

By Ron Harper

G

reen practices have a positive impact on the environment, but they’re also good for business.

With that in mind, Cogent Power Inc., a Burlington, Ont. manufacturer of transformer components and electrical steel products for power markets, decided to tackle its environmental challenges in 2006 and formed a Green Team.

These dedicated employees applied lean tools such as kaizen and value stream mapping to eliminate landfill waste, reduce and offset Cogent’s carbon footprint while encouraging employees to make eco-friendly choices.

Many manufacturers choose to see energy as part of the cost of producing and supplying a product; however, much of it can be wasted, so the Green Team decided to address the use of electricity and natural gas, both major carbon contributors.

With the support of its suppliers, Cogent replaced 311 metal halide light fixtures with T5 fluorescent models that consume a total of 241 watts per fixture, a 46% energy reduction. Lighted emergency signs were replaced with CSA-approved glow signs that require no electricity. And energy-wasting problems such as air leaks in compressors, lines and equipment were also addressed. Old,

www.plant.ca

inefficient motors were replaced with high efficiency motors and motion detectors were installed in office areas that didn’t require constant lighting.

Manufacturing transformer cores uses a lot of natural gas and nitrogen in two large gas-fired annealing furnaces. By retrofitting bearings and seals, heat loss was lowered with a significant reduction of oxygen ingress. Redesigning and rebuilding primary door systems, and refinements to the sequencing of products entering and exiting the furnaces, substantially reduced natural gas and nitrogen use while increasing the level of product quality.

Extending green benefits Cogent employs a unique and highly effective method for replenishing a series of kanbans used to stock production supplies. This system was put in place and happily accepted by suppliers who actively take part in maintaining and replenishing them.

Suppliers and customers also helped eliminate waste, which contributed to a reduction in landfill waste, resources used and the energy required to produce new materials.

Arrangements were made with a skid supplier and domestic customers to reuse and refurbish wood skids. The old skids are returned to the supplier

PHOTO: COGENT

Case History << Operations

where they are refurbished, then resold to Cogent at a fraction of the cost. And cardboard suppliers recommended new packaging that would contain the highest recycled content available.

Kaizen events focussed specifically on green improvements. Two in particular reduced packaging materials and related waste. A kaizen identified the following: • Current packaging designs contained excess material.

• Non-standardized wooden skid designs for specific customer requirements, increased inventory and customer waste.

• Less costly, more eco-friendly packaging (such as recyclable polyester banding) was available.

• Nonrecyclable packaging components such as tarpaper or volatile corrosion inhibitor (VCI) paper could be eliminated with the introduction of new materials and packaging changes.

• Reducing the packaging and introducing greener products resulted in less movement and improved labour costs.

Replacing metal halide light fixtures with T5 fluorescents consumes 46% less energy.

ments to its recycling efforts, Cogent has achieved a total recycling rate of 97.4% (post-consumer waste diverted from landfill) resulting in an annual savings of $182,000. The purchase of new domestic skids has been reduced by 35% and 97% of all outgoing material is packaged to a single standard. Twenty-five per cent less packaging is used with the elimination of tarpaper and VCI paper. New packaging is fully recyclable and it uses 25% less material. There has also been a significant reduction in unnecessary motion.

Cogent’s lean and green initiatives have also benefited all levels of the extended enterprise: • Skid suppliers consume fewer resources.

• Customers get improved packaging and less waste.

• With the advancement of Cogent’s

“Cogent’s lean and green initiatives have also benefited all levels of the extended enterprise...”

Thanks to Cogent’s lean and green efforts there were waste and cost reductions in the following areas: Electrical power demand. It decreased by 25% per unit pound of product sold, and annual electricity consumption was reduced by an estimated 574,840 kilowatt hours saving an estimated $70,000. The lighting retrofit alone reduced electrical demand by 66 kilowatts. Carbon dioxide emissions were reduced by 382 tonnes, sulphur dioxide by 1,700 kilograms and nitrous oxides by 355 kilograms.

Natural gas use. Consumption was reduced 10% per pound of annealed or 214,098 cubic metres per year for an estimated savings of $35,000—enough to heat 88 Ontario homes in one year.

Nitrogen consumption. Changes to the annealing furnace that improved natural gas consumption reduced nitrogen by 33% per pounds of annealed product for an annual savings of $82,000.

Landfill reductions. With improve-

work with amorphous materials (which provide less than one third of the power lost in a transformer to heat and noise) and other highly efficient magnetic materials, customers can significantly lower the operating costs of their transformer networks.

The company participates in green community events and employees are encouraged to extend energy saving practices and recycling to their homes.

With a company culture that embraces lean thinking and continuous improvement, it’s hard to be lean and not green.

Ron Harper is the president of Cogent Power Inc., a Burlington, Ont. manufacturer of transformer components and electrical steel products for the power generation, transmission and distribution markets. E-mail ron.harper@ cogentpowerinc.com.

Comments? E-mail joe.terrett@plant. rogers.com.

Canadian PLANT 11

Operations

>> Think Lean

PHOTO: TOYOTA

Put some speed behind your parts

Toyota's original vision was to procure and assemble parts into a vehicle, sell it and collect the cash before supplier invoices became due.

Better and faster equals greater value and fatter margins

By Richard Kunst

M

any manufacturers focus on implementing the tools without understanding lean’s true purpose, so let’s revisit why Toyota began to develop the now famous Toyota Production System (TSP).

The Japanese automotive manufacturer concluded it needed to change its production methodology primarily

because it was broke. The vision was simple: procure parts, assemble them into a vehicle, sell the vehicle and collect the cash before supplier invoices became due. It was all about the velocity of parts through Toyota’s system and the effective use of labour to make it happen.

With this in mind, folks from Toyota visited the US to witness the effectiveness of the Ford assembly line. During the visit they went to a supermarket and marvelled at the concept of replenishing such a wide array of products. They took those basic concepts back to Japan and tweaked them to support the initial vision of collecting cash before invoices were due.

Measured against the original TPS vision, how are you doing? If we compare your accounts payable plus inventory compared to your accounts receivable and cash balance how effective is your lean program? Are the tools

you’re using working to enhance cash flow?

Let’s explore some of the basic tools and how they apply to the vision of velocity.

Focus on the team member. The role of lean tools is to make team members highly productive at their workstations, keeping them clean, comfortable, and well informed with a constant, uninterrupted supply of parts and supplies.

Material conveyance. It’s the primary focus within the TPS and other tools become subservient to the support of its increasing velocity. Toyota doesn’t implement anything unless it supports the velocity of inventory through the entire value stream. Velocity is also extended into the information and communication flows since they have a direct impact on part velocity; hence the use of kanban systems. Material conveyance will automatically prioritize which lean tools to implement and to what extent. If your system focuses on the reduction of WIP inventory, it will result in a cleaner and more effective work area while increasing your agility.

Run bus routes throughout your facility. Put them on standard schedules and their frequency will reflect the inventory level you’re willing to tolerate. Increasing the frequency of bus routes will provide the incentive to increase the effectiveness of other lean tools to help achieve the perfect process.

5S+1 or workplace organization. More than just a housekeeping solution, it also enhances productivity by forcing team members to be more organized.

How can 5S be applied to part velocity?

When an operator’s attention is interrupted, it can take up to 20 minutes to regain focus on the task at hand. Workstation flow racks (replenish from the back, consume from the front) help operators focus on their jobs without interruption. The quantity stored at the workstation is a direct reflection of your bus route frequency for commodities.

Driving change Focusing on part velocity will drive significant change, especially if activities revolve around how frequently you run bus routes. Increasing frequency will necessitate changes to your production system.

The next significant opportunity to increase part velocity is implementing bus routes between suppliers and point of use locations in the plant.

Most organizations like to force their suppliers to absorb freight costs, which amounts to thinly disguised cost savings. Taking control of your freight allows you to engineer and design the bus route, including how frequently the routes should run.

Don’t blindly accept the benefits of vendor-managed inventory. Yes, it removes the cost impact related to the procurement of inventory until the commodity is consumed, but the carrying cost is now buried in your purchase price, so is it actually cheaper?

With your eyes on part velocity, you’ll uncover many new opportunities and will make more sense of various lean tools, such as SMED or set-up reduction to reduce lot sizes which increases part velocity; and standard work to insure that cycle times of tasks will support part velocity through the value stream. A good example is the frequency a buyer places orders for specific commodities or parts.

The ultimate opportunity is a trigger from the point of use location directly to the supplier, bypassing purchasing. For example, as tires and rims are installed on the assembly line the supplier is triggered with a replenishment request.

As part velocity increases through your supply chain, you’ll need to be better, which will make you faster. If you’re better and faster, you’ll be cheaper, thus improving customer value and your margins while enhancing the ultimate metric: positive cash flow. And is that not our ultimate goal?

Richard Kunst is president and CEO of Kunst Solutions Corp., which publishes the Lean Thoughts e-newsletter.

E-mail rkunst@kunstartofsolutions.com.

Comments? E-mail joe.terrett@plant.rogers.com.

12 Canadian PLANT

7PLNT15928.indd 1

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March 2010

Retirement << Management

Selling your business:

Think ahead PHOTO: iSTOCKPHOTO

Maximize your company’s value with a comprehensive exit plan Forty per cent of boomer business owners plan to retire over the next five years. The savvy ones are planning their exit strategies now.

By Jason Kwiatkowski

T

hinking about selling your manufacturing business and spending more time on your golf game; or perhaps pursuing other business interests? Start formulating your exit plan.

Consider that front-line baby boomers turn 65 next year. Among them are business owners who are driving the largest transfer of private wealth in history.

Forty per cent of boomers with private family businesses intend to retire within the next five years. Many are relying on the proceeds from the sale of their companies to fund their retirement, yet as more boomers put their enterprises on the market, the growing supply of businesses will exert downward pressure on sale prices. This translates into lower returns and more stress.

The number one reason business exits fail is lack of planning. Too many owners are reactive—forced to sell because of burnout, health issues, marital problems or business conditions—and these types of fire sales leave too much money on the table. On the other hand, owners who invest time and make the effort to prepare ultimately sell their companies for a significant premium.

Control timing If you intend to sell your manufacturing business in the coming decade, you need to prepare well in advance to control the timing of the sale and to maximize net proceeds. Here’s an approach that can help you do this.

First, planning should begin several years prior to a sale. In a Newport Partners survey of more than 100 Canadian business sellers, 62% recommended methodically pre-planning the sale of a business two to three years in advance. However, less than 25% actually did so themselves.

Properly preparing a business for transition begins with a formal exit plan.

This document sets out the steps that must be taken to accomplish your goals, and addresses all the business, personal, financial, legal and tax issues involved in transitioning your business to new owners.

The benefits to having a formalized plan include: • Achieving your business and personal goals.

• Retaining control over how and when Continued on page 14

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Management

>> Motivation

Planning your exit

Boost morale

Continued from page 13

the business is exited.

• Maximizing company value in good times or bad.

• Minimizing, deferring or eliminating capital gains taxes upon the sale of the business.

• Reducing stress and tension among family members and employees.

To be effective, an exit plan needs to integrate these components: Goals assessment. Determining business, personal, and family/estate goals provides the plan’s direction and frame of reference. Each goal should be specific, measurable, achievable, realistic and time-framed.

Financial needs assessment. How much money do you need to realize from the sale of the business to achieve your goals?

Business valuation. An independent valuation conducted by a professional business valuator at least three years prior to exit will establish a current baseline for the company. This allows time to implement measures, such as growing revenues, increasing margins, strengthening the management team and diversifying the customer base that may be required to raise the value of the business.

Exit alternatives analysis. Assess the pros and cons of alternatives as they relate to your goals. Internal transition options involve a sale to family members, existing shareholders, management team or employees. Alternatives for external transfers include third-party sales, refinancing or going public.

Net proceeds analysis. This is the amount you get to keep after selling the business and settling all liabilities, income taxes and other obligations.

Thus net cash received upon sale can be significantly lower than the sale price.

Conduct a net proceeds analysis for each relevant exit alternative.

Action plan. Identify the specific tasks that must be carried out, such as obtaining appropriate insurance, completing tax and estate planning, finalizing a will, preparing a contingency plan and developing a strategic plan for the business. Identify the timing and priority of each task and the individuals responsible for them. And schedule regular meetings with those guiding and implementing the exit plan to ensure it progresses as intended.

Procrastination is often the key impediment to effective exit planning. Want to reduce stress and make money? Start planning your exit now.

1.

2.

3.

4.

5.

6.

Jason Kwiatkowski is a senior manager in the Financial Advisory Services group of BDO Canada LLP (www.bdo. ca) based in Toronto. Call (416) 3696057 or e-mail jkwiatkowski@bdo.ca.

Comments? E-mail joe.terrett@plant. rogers.com.

14 Canadian PLANT

RECESSION-WEARY EMPLOYEES NEED FUTURE INCENTIVES AND TRANSPARENCY

BY NOELLE STAPINSKY, FEATURES EDITOR

A

fter a tough year of cost cutting, restructuring, wage freezes and layoffs, many companies are struggling to maintain healthy production with a reduced workforce.

Stress and distraction erodes productivity, but the right management strategies will cultivate a healthier, more positive work environment without breaking the budget.

“In tough times, organizations can’t invest a lot of money into programs to improve employee engagement,” says Vince Marsh, senior specialist at Deloitte Canada in Halifax. “Often, that’s not what people are looking for. They’re looking for a better relationship with their direct report [manager].”

Marsh says the relationship between management and employee is imperative to employee retention. “The number one reason people leave their jobs is because they [don’t] get along with their direct report or there’s something about their manager that makes the job difficult.”

So improving employee morale can be as simple as adjusting the way a company interacts with its people. Offering a transparent look at the state of the business and its objectives moving forward relieves stress and encourages staff to work as a team to achieve goals.

“In hard times, people need a clear view of where the problem is coming from,” says Marsh. “The problem might just be the economy, so I encourage people to make sure they’re clear about what they’re going to tell their people. Make it concise and externalize the problem.”

Management should remind employees about their strengths and attributes, and how their contribution helps the company get through tough times.

Listen to what people have to say and demonstrate appreciation for what they contribute to the company.

“People have stories and issues,” says Marsh. “Managers need to listen to them and stay engaged. A manager might hear something he or she doesn’t like, but don’t react: just listen.”

Winnipeg-based Allmar International, a national supplier of architectural hardware and building products, recruited Marsh to help enhance its employee engagement strategies.

Allmar wasn’t hit hard by the recession. With a log of contracts in place for large construction projects, business was

steady during the past year, slowing only in the summer. But Allmar has branch offices across the country, and Richard Hutchings, the firm’s CFO, says the downturn was noticeable in Alberta and BC. In Alberta, structure projects dropped with the price of oil. And the condo market ground to a halt in Vancouver and Victoria.

But instead of reacting to the economic downturn with layoffs, Allmar decided to use the time for more training and to improve internal systems. The idea is to hit the ground running when the economy bounces back.

Retaining talent “We wanted to improve on how we treated our employees and how we manage them,” says Hutchings. “Our key to success is attracting and retaining talent. If I have those people, I’ll have more business.”

As a service-based company, Allmar must hire people who are knowledgeable about building codes and be capable of building relationships with contractors and end users in a variety of markets.

Allmar wanted to create an environment that people didn’t want to leave.

“We decided we needed more training to ensure that we were listening to our employees and conducting performance reviews in a positive way,” says Hutchings.

Marsh conducted a team diagnostic to analyze what Allmar was doing well and what could be improved upon.

“He found we needed to work on accountability and constructive interaction,” says Hutchings. “A lot of our people thought that conflict was a bad thing. We

weren’t prepared to disagree with each other as we needed to get better.”

People listen at different levels. Often, people are thinking what they are going to say rather than focusing on what is being communicated to them. Many people also allow their emotions to colour their viewpoint or reactions in a discussion.

“Marsh taught us how to conduct dialogue on sensitive subjects and resolve them by separating emotions from observations,” says Hutchings.

They also found the executive team was too geographic and it was unclear about who was accountable for covering key areas.

To remedy this, Allmar redesigned the executive team around functional areas and assigned accountability to each person.

“We covered off areas that weren’t being covered before and eliminated duplication,” says Hutchings. “Now we have more clear roles and accountabilities to achieve the objectives.”

Allmar also launched a peer recognition program and a revamped sales recognition program.

“We decided there were a lot of people in the organization that didn’t get recognized and all the attention was going to the sales staff,” says Hutchings.

The peer program allows staff to nominate co-workers who demonstrate exceptional work, dedication and represent Allmar values. In a short time, nominations flooded in from across the country with personal stories about the company’s unsung heroes.

UPPING YOUR OUTPUT

W

hen times get tough, fewer people are expected to do more. Work loads double creating more stress and distraction.

“We’ve got this myth that we can multi-task, but in times like this it’s really hard to do that,” says Vince Marsh, senior specialist at Deloitte Canada in Halifax. “A big part of being successful [and productive] is saying ‘no’ to things you’re used to doing and change the way you start your day.”

Here are some tips on how to change work habits to increase productivity: 1. Break the technology habit. Many people can’t resist the chime notification of a new e-mail, the buzz of the blackberry or the blinking red light signalling an awaiting message. Messages are often “urgent” but not necessarily of critical importance.

2. Morning mandate. Morning is the most productive time for most people. Change the way you start your day by not even opening email or checking voice mail. Focus on what is the most critical task you have to handle. Using your most productive time to accomplish major tasks will increase productivity and reduce stress.

3. Lean meeting. Cut meeting times in half and stack them in the afternoon so there aren’t gaps in between. Too many people are included in meetings that are spread too far apart throughout the day. By properly scheduling meetings back-to-back in the afternoon will increase morning productivity and waste less employee time.

March 2010

>> Tax Strategy

Winding-up operations?

SIX TAX IMPLICATIONS TO CONSIDER

BY MARK WALTERS

PHOTO: iSTOCKPHOTO

A

These stories were published on the company’s internal document sharing site and three employees were awarded a trip for two anywhere in North America.

“Appreciation has a powerful impact on the way people feel and it increases their well-being,” says Marsh. “That’s a good thing, especially when the rewards they may be used to aren’t forthcoming.”

Allmar’s investment in training was the key to aligning productivity with its overall corporate goals. “[This year] will be continued improvement internally and building our people up so we can hit the ground running when the economy comes back,” says Hutchings. “We might not be making as much money, but we must have a longterm view.”

It’s easy for people to lose sight of their roles and value to the company.

Changing how your company interacts with employees will reduce stress and result in a more positive and productive workplace.

Noelle Stapinsky is the features editor of Canadian PLANT and Canadian Manufacturing.com. E-mail noelle. stapinsky@rci.rogers.com.

Comments? E-mail joe.terrett@plant. rogers.com.

s economic conditions improve, some manufacturers will still face capacity and other issues that will lead to the closure of one or more of their facilities. Tax implications arising from plant closures are often overlooked. Avoid unpleasant surprises: consider the full scope of tax issues when winding-up operations. Here are some issues to consider: 1. Employees. First of all, proper notice of a plant closing to employees is required.

Due to timing and valuation assumptions, actual pension obligations may be significantly higher than the reported accounting liability, requiring additional funding. Do surpluses in pension or benefit plans have to be distributed to employees? Additional payouts, such as severance and vacation accruals may be required under collective agreements.

Take into account the applicability of various payroll taxes. Deductibility will depend on the nature and timing of the payment. Various tax planning opportunities for employees may exist.

2. Closure costs. Consider transfer pricing agreements (termination clauses, etc.) and principles, including Canada Revenue Agency (CRA) views, when determining whether a Canadian company should bear all, or some, closure costs. The deductibility of closure costs also depends on the nature of expenditure. If the closure costs are deductible, the timing of expense for tax purposes typically depends on whether a legal obligation exists and when the obligation ultimately is paid.

3. Tangible assets. Asset appraisals are often required to support valuations from a tax perspective and to provide a defense against third party claims, if any, resulting from the closure. In addition the CRA will look for supporting evidence for the valuation of properties transferred to related non-residents.

Terminal losses, if any, on scrapped assets may need to be deferred and amortized. Tax losses on transfers of assets to related parties may be restricted or may have to be deferred and amortized. Gains related to a plant closure may be taxed either as income gains (approximately 32% combined federal and provincial rate in Ontario) or as capital gains (one half of regular income rates).

Be aware of commodity tax and customs issues on the transfer of assets to other legal entities both inside and outside Canada. You may get a reduction in Municipal Property Tax on vacant properties.

4. Intangible assets. Consider the possible disposition of certain intangible assets such as customer relationships, intellectual property and manufacturing know-how. The transfer of these intangibles is likely to be considered eligible capital property disposition and taxed similar to capital gains (only 50% of the gain is taxable). Again, the CRA will want to see valuation for assets transferred across borders.

5. Distributions to US parent company. In-kind and cash distributions can be subject to a Canadian withholding tax of between 5% to 25 per cent. In-kind or cash repayment of intercorporate debt are generally free from Canadian withholding taxes.

6. Tax losses. Significant tax losses could arise on closure, requiring future restructuring to ensure losses are fully utilized within the permitted three-year carry back and/or 20-year carry forward period. Without proper planning tax losses could become stranded and worthless.

Mark Walters is the leader of the Canadian Tax Automotive Practice of PricewaterhouseCoopers LLP. E-mail mark.walters@ca.pwc.com. Visit www.pwc.com/ca/auto.

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mmts.ca Canadian PLANT 15

Innovations

>> Patents

Protecting your intellectual property keeping your research secure

By Nancy Hill

C

hallenging economic and market conditions hit the auto industry hard over the past two years and there may be considerable debate about the best ways for companies to survive and thrive, but there certainly is consensus on the need to innovate.

AUTO21, a Canadian Network of Centres of Excellence, focuses on automotive research and development and it supports more than 200 researchers across Canada working on 52 autorelated projects in a variety of areas.

Each project is supported and guided by industry or public sector partners. It doesn’t take an ownership role in any Innovators must take steps to protect their intellectual property. intellectual property that results from a project: that’s left to the project’s researchers and How patents work. Patents grant the owner exclupartners to determine, but the protection of intellectual sive rights to make, use and sell an invention for 20 property is a serious concern. Here are five important years from the date of applications filed after 1989, or 17 factors companies engaged in innovation projects years from the date of issue for applications filed prior should consider: to 1989.

Patents are granted to any new and useful art, process, Transferring technology. This is done in the auto machine, manufacture or composition of matter or any sector through patenting and then licensing or asnew and useful improvement. In the automotive industry, signing the technology to a receptor within the industry. for example, new composites, new powertrains, improved It’s typically handled through the technology transfer batteries, new sensors or sensing systems and software office at the researcher’s university or institution. Such would be considered patentable. Fees are paid to maintain agreements often lead to further, and more targetted the patent over it and the application’s lifetime. research.

Preserving confidentiality. Confidential discloFiling an application. In Canada and the US there sure agreements require each party to keep all is a one-year grace period to file a patent applicaproprietary information secret. The obligation typically tion, starting when the invention was first disclosed to expires once the invention or innovation has been made the public. This grace period is not available in most public through the patent system or other methods. other jurisdictions.

3.

1.

2.

4.

5.

PHOTO: iSOCKPHOTO

Five things you need to know about

To obtain valid patent protection your first application must be filed before the invention is disclosed. Canada has applied a first-to-file system since 1989. If there’s more than one patent application for the same subject, the person who filed first gets the protection. Most countries follow the same first-to-file regime, but the US uses a first-to-invent system.

Protection in multiple jurisdictions. A common strategy is to file in one jurisdiction, such as in Canada or the US, while the invention is still secret. This is done in the automotive industry since the use and manufacture of automobiles and their parts takes place in many jurisdictions.

Patent applications can be filed in other jurisdictions within one year from the original filing date, but an alternative is to file a subsequent application under the Patent Cooperation Treaty (PCT), which allows applicants to designate more than 100 countries.

This buys time to decide where to seek patent protection, and it defers the filing costs in each country or region for two and a half years from the original application date.

There are other forms of intellectual property protection such as copyright, trade marks, trade secrets, integrated circuit topography and plant breeders’ rights.

Accordingly, there are many opportunities for licensing in research and researchers are ready to tackle specific industrial problems that can be proprietary to industry partners who are keen to sharpen their competitive edge through innovation.

Nancy Hill is a lawyer and patent/trademark agent with Hill & Schumacher, a law firm based in Toronto (www.hill-schumacher.com) and a member of the AUTO21 Research Management Committee. Visit www.auto21.ca.

Comments? E-mail joe.terrett@plant.rogers.com.

Web Sources Check out the following websites for more information on the protection of intellectual property.

Canadian Intellectual Property Office Everything you want to know about patents, copyrights, trade marks and industrial designs. www.cipo.ic.gc.ca

THOUSANDS OF APPLICATIONS.

Canadian Patent Office

HUNDREDS OF LABELS.

Information on patents and processes for patent applications. www.servicecanada.gc.ca/eng/goc/patents.shtml

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Western Economic Diversification Canada This federal government department, established to improve the economic competitiveness of the West, offers information on obtaining a patent in Canada and the US. www.wd.gc.ca/eng/7133.asp

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16 Canadian PLANT

March 2010

Report Card << Innovations

We’re D-level innovators PHOTO: iSTOCKPHOTO

Canada’s performance ranked 14th out 17 countries

By Joe Terrett, Editor

C

anada is home to some great innovators: most famously Research In Motion and its ubiquitous Blackberry come to mind; but when it comes to innovation, we’re a D-level performer, according to a Conference Board of Canada ranking.

Its How Canada Performs report card places Canada 14th among 17 peer countries. Of the 12 measurement indicators, we get one B, two Cs and nine Ds. That lone B is for the number of scientific articles published per one million population.

And Canada ranks second to last on the new indicator—the number of international trademarks filed per million population—a measure of services sector innovations and non-technological innovations. Ten countries had at least twice our share of trademarks by population.

“Canada is well-supplied with educational institutions and carries out scientific research that is well-respected around the world,” says Gilles Rheaume, vice-president, public policy for the Ottawa-based research firm. “But, with a few exceptions, Canada does not successfully commercialize its scientific and technological discoveries into world leading products and services. Canadian companies are rarely at the leading edge of new technology and find themselves a step behind the leaders.”

Integration needed Rheaume told PLANT there are “many, many factors” in play, among them: lack of an inviting domestic market for innovative new products and services; difficulty accessing risk capital; and the need for a more integrated national strategy from government.

He says the federal government is currently focussed on science and technology but pays little attention to commercialization. Rheaume stresses the importance of developing domestic markets: by providing incentives and establishing market standards, companies can nurture their innovations before taking them to the next level globally.

The Conference Board notes countries with the highest overall scores have developed successful national strategies for innovation, giving them global leadership in one or more areas. For example: • Switzerland, the top-ranked country, is a leader in the pharmaceuticals industry.

• Ireland is the host of innovative information technology companies, and is a leader in high and medium-high technology manufacturing.

• The US fosters a combination of top science and engineering facilities, broad and deep capital markets and an entre-

www.plant.ca

Canadian PLANT 17

preneurial culture. It’s also a leader in share of world patents and knowledgeintensive services.

Canada was leading in two highly innovative sectors—biotechnology and renewable fuels—but it has shifted to a follower position because of complex and time-consuming regulatory processes, slow technology adoption rates,

When it comes to innovation, Canada ranks near the bottom of the class.

and increasing tendencies for Canadian companies to ignore Canadian markets for their new products.

Another Conference Board study, Conflicting Forces for Canadian Prosperity: Examining the Interplay Between

Regulation and Innovation, shows firms currently face longer regulatory approval times in Canada than competitors in other countries.

To create a more hospitable environment for innovation, he said government has to commit to it over the long-term and come up with a national strategy.

And the focus should not be on companies, but the opportunities.

“Don’t pick winners, pick the races,” he says, using an Olympian metaphor.

“Create the opportunities for those who want to compete to win gold.”

For copies of the reports go to www. conferenceboard.ca.

Comments? E-mail joe.terrett@plant. rogers.com.

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Technology

>> Vision Sensor

PHOTO: CREAFORM

>> Plantware

Taking a 3D image for reverse engineering.

Scan to reverse engineer Version 4 of Creaform’s VxScan software integrates data acquired by a Handyscan 3D laser scanner and the HandyPROBE armless and portable CMM. The new platform makes it possible to create geometrical entities such as planes, lines, points, spheres, cylinders, or circles directly from scanning or probing data in a single referential and in real time. Then you can save them in a format that allows direct exporting into most reverse engineering and CAD software.

Creaform is a 3D technological company with offices in Quebec and Montreal. www.creaform3d.com

Plex improves scheduling Plex Systems Inc. has enhanced the production scheduling functionality of its Plex Online manufacturing ERP software.

You can pull test scheduling reports that show all jobs, operations, and constraints that contribute to a particular scenario’s results, then adjust the parameters.

An new workcentre type-scheduling sort method gathers information about each part to be processed, sorting the information into what you identify as “like attributes.” A second feature allows you to prioritize jobs based on part attributes such as oil type.

Plex Systems Inc. is the Auburn Hills, Mich.-based developer of Plex Online, a software as a service solution for manufacturing. www.plex.com

Smart cameras, smarter robots Windsor student wins scholarship for smart sensor technology

By Noelle Stapinsky, Features Editor

J

ust two tiny cameras connected to a circuit board and a three-minute technology pitch landed Siddhant Ahuja a $10,000 scholarship.

The Ontario PhD student from the University of Windsor won over a panel of Dragon’s Den-like judges at the 2010 AUTO21 TestDRIVE competition in Ottawa, which showcases automotive technologies developed by Canadian university graduate students, and took top prize with his work on smart cameras used for quality control, assembly and robotic guidance.

Working under Dr. Jonathan Wu, a professor and Canada Research Chair in automotive sensors and sensing systems at the university, Ahuja started with a problem description: auto manufacturers need to constantly reconfigure their facilities to produce new car models. The challenge: conventional wireless communication monitoring systems are unreliable on auto assembly lines due to radio frequency interference from the harsh plant conditions.

Currently auto manufacturers use cameras connected to computers, network equipment and servers on assembly lines, but a single camera is unable to perceive distances between objects.

“A significant part of manufacturing relies on industrial robots, which are pre-programmed by a human operator. If one of the robots slips out of sync or malfunctions, the whole production line shuts down,” says Ahuja. “My idea is to provide these robots with their own set of eyes and connect them to an intelligent network that will enable them to communicate to each other and cooperatively achieve whatever the end goal is.”

If a central node shuts down, everything shuts down and Ahuja says this results in a lot of infrastructure and maintenance costs.

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All of these single vision cameras are sending gigabytes of information to a central computer for processing. To streamline this process and increase efficiency on the plant floor, Ahuja built a tiny module with two cameras to give industrial robots a 3D optical view of production. This “sight” enables the robots to detect shapes, colour and distances between objects.

“All of the processing is done onboard and the only data sent to the central computer would be pass or fail criteria or analytics,” says Ahuja.

With this new sight and a real-time communication through a network, the robots will self-organize to effectively execute tasks on the assembly line.

“They can optimize themselves,” says Ahuja. “For example, one could be welding, one could be doing quality inspections, but if one is closer to a part that is needed, it can pick it up and deliver it to the assembly station.”

Properly used, this kind of system would reduce overhead costs, waste and downtime, and maximize efficiency.

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More alternatives Of course, implementing such a smart technology would mean fewer human operators on the assembly line. Ahuja says it’s a move toward a fully automated process, which is expected to have an efficiency rate of more than 80 per cent.

Now that the first step of his project—developing the robot eyes—is complete, Ahuja and team will working on establishing the smart camera network and testing it at the manufacturing facility of an industrial partner in the AUTO21 program. AUTO21, a Canadian Network of Centres of Excellence, focuses on automotive research and development and it supports more than 200 researchers across Canada.

Although designed for automotive applications, this system could also be configured to other manufacturing processes in industries such as aerospace, food and

March 2010

>>TECH TIP

USE DIAGNOSTICS TO SAVE ON MOTOR REPAIRS

D

PHOTO: UNIVERSITY OF WINDSOR

PHOTO: iSTOCKPHOTO

o you find repair shops dislike you performing any type of testing after a motor has been fixed? The likely reason: some of them resort to shortcuts and don’t want to have their reputations questioned by knowledgeable maintenance professionals.

It’s not unusual, for instance, to discover the repair shop spliced conductors because it ran out of wire. Or two conductors two sizes smaller have been spliced because the shop didn’t have the right wire size. You get roughly the same simple resistance but it dramatically changes the impedance of the circuit and causes the parallel circuits to act as a transformer, heating up the associated coils and behaving like a short circuit.

Where do these revelations come from? A survey in the US by the Electrical Apparatus Service Association (EASA) found 81% of repair shops actually admit to altering the windings during repairs, and 73% of those admit to doing it for their own convenience. And less than half of repair shops perform any type of testing on the motor from the time it comes in until the time it leaves.

The situation in Canada is similar.

Honest repair shops want their customers to evaluate and commission repairs: it quickly sets them apart from the shoddy shops. Consider the benefits of a predicMotor diagnostics prevents unexpected downtime. tive maintenance approach to commissioning tests: • It helps with troubleshooting later. Some testing methods that use low voltage impedance measurements will identify overheated or contaminated windings.

• Motor circuit analysis tests—including resistance, impedance, inductance and others— used for condition-based maintenance or previous commissioning can be compared to a motor returning from repair. This is important if you’re unable to verify that your specifications or standard industry practices are being applied. A changed reading is an indicator the windings have been altered from the original and the motor will not perform as designed.

If you are using repair specifications, verify the repair shop is actually following them. This can be done with on-site inspections or by requiring specific reports.

—Steve Gahbauer, Contributing Editor

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Dr. Jonathan Wu (left) and Siddhant Ahuja from the University of Windsor give the thumbs up to a smart sensor technology they developed (right) that could fully automate automotive manufacturing.

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electronics. And there are other sectors that Ahuga finds interesting, such as video games.

“You could actually replace the [Nintendo] Wii controllers with two cameras,” says the innovator.

With two smart cameras mounted to the top of a television, Wii players wouldn’t have to hold anything to play video games. The cameras would detect every movement from facial expressions to body movements and sounds and replicate them in the animation on the television screen.

This technology may also change the advertising world. Ahuja suggests it could be used to create digital billboards in shopping malls. When a person passes by the advertisement, the smart cameras would analyze the person’s gender, what brands they’re wearing, and generate an ad that fits the demographic.

Okay, but smart robots also bring to mind the humanity destroying Terminators and the cyber domination of Skynet depicted in the 1980 sci-fi flick. But Ahuja assures us there are limits to what the robots can do.

“They really can’t start building more robots or an army of robots,” laughs Ahuja. “Operators can always see what’s going on, who’s doing what and they can always override [the robots] if they feel the action is unauthorized.”

Giving robots full vision and a bag of self-organizing tricks will drive up efficiency and put many manufacturers on the road to full automation, but what of the industrial workforce? Ahuja believes humans should the ones coming up with innovative processes, not picking up a part and placing it somewhere else. Leave those repetitious jobs to the smart robots.

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Noelle Stapinsky is the features editor of Canadian PLANT and Canadian Manufacturing.com. E-mail noelle.stapinsky@rci.rogers.com.

Comments? E-mail joe.terrett@plant.rogers.com.

Canadian PLANT 19

www.plant.ca 2010-UK COL.indd 1

12/9/09 11:24:28 AM

Trends

>> Forestry

FPAC banks on the bio-age

Integrating bio-energy production will be key to its survival

By Noelle Stapinsky, Features Editor

they can produce hardwood, two by fours and other wood products while using the residual waste such as the tops of trees, bark and stumps he economy may be on the mend, but as the feedstock for a bio product.

Canada’s battered forest industry continPulp mills would continue to produce paper, ues to struggle. Demand for many forestry but also extract some of the cellulose, hemicelproducts is in decline while crippling pricing luloses and lignin at the end of the process. The pressures from global competitors, particularly cellulose is used to make bio chemicals and those in developing countries, are driving Canahemicelluloses produces polymer and ethanol. dian companies into bankruptcies, and plants “If you can replace polymer with hemicelare closing, resulting in mounting job losses luloses you are reducing your hydrocarbon use (more than 90,000 since 2001). within plastics and you end up with a greener The industry needs to find new ways to prosproduct,” says Pierre Lapointe, president and per and support its workforce of 270,000, and CEO of Quebec-based FPInnovations, Canada’s that “something new” may be bio-energy and largest forestry sector research organization bio-chemicals.

As sawmills crank out planks and 2x4s, they can save the wood scrap for use as feedstock in bio and the provider of the potential technologies A year long-study—The Bio-pathways products. studied in the Bio-pathways Project.

Project—was commissioned by the Forest level. And they discovered forestry companies need to FPInnovations has developed a new technology that Products Association of Canada (FPAC), which reprelook no further than to their existing operations. By produces nanocrystalline cellulose (NCC), which may sents Canada’s wood, pulp and paper producers nationintegrating biotechnology, forestry companies can conbecome an alterative to nano-carbon tubes used in the ally and internationally. It revealed forestry companies vert biomass (wood fibre) for other uses while producautomotive and aerospace industry. could capitalize on the bio-age by integrating bio-energy ing traditional products.

“We are doing research with a helicopter company production with existing operations.

Some segments, such as lumber, are always going to be to introduce NCCs in their rotors,” says Lapointe. “It’s “It’s really about the transformation of the sector,” profitable, says Cobden. a totally new field. Imagine using [trees] in aerospace says Catherine Cobden, FPAC’s vice-president of ecoHowever, a lot of pulp and paper companies need to manufacturing.” nomics and regulatory affairs. transform themselves and they have the most significant The study pulled together more than 60 industry opportunities in the bio-chemical field. experts, executives and governments to assess 27 New technology Traditionally, saw mills would burn residual waste to traditional and emerging bio-chemical and bio-energy FPInnoations is currently working with a Canadian 1101-306_PlantCan_Industry:Transport 10/9/09 4:21 PM Page 1 generate energy. With an integrated bio system in place, technologies on an economic, social and environmental company to set up a pre-commercial NCC demonstration plant that will cost $40 million. Lapointe estimates it would cost $150 million to $250 million for a full commercial plant and getting this kind of money will be tough.

“The challenge is not going to be the willingness to change,” says Lapointe. “It’s that there is no capital money available at this point.”

Armed with the study results, FPAC is calling on the federal government for help, asking for $300 million per year over the next three to five years. Cobden says the $300 million could come from additional funding or by changing existing programs. And the association would like the government to come up with a Made in Canada clean energy action plan to help advance the development of home grown technology; create a repayable revolving fund for capital investments; and leverage the tax system to create capital investment tax credits to keep up with incentives offered in the US and abroad.

If the government doesn’t invest additional money or make funds more readily available through existing programs, Cobden believes a biotransformation will The Business Development Bank of Canada take place anyway. “The economics are pretty clear. It BECAUSE understands your reality. It provides the will just take longer.” necessary support so your business can ENTREPRENEURS PHOTO: FPAC

T

grow at the pace of your aspirations – come rain or shine.

WANT TO GO FAR.

Noelle Stapinsky is the features editor of Canadian PLANT and Canadian Manufacturing.com. E-mail noelle.stapinsky@rci.rogers.com.

Comments? E-mail joe.terrett@plant.rogers.com.

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20 Canadian PLANT

2010-LIT.indd 1

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March 2010 2/22/10 1:07:22 PM

Product Showcase << Departments

Conveyors & Lifts

Give secure lift to your contoured structures The VPFL4-20-AIR below-the-hook vacuum lifter from Anver Corp., a Hudson, Mass. manufacturer of specialized vacuum equipment, uses a three-legged approach with pivoting suction cups that attach securely to contoured structures and vessels.

It accommodates awkward loads from 24 to 48 in. in diameter and up to 500 lb., and has an all-welded steel frame with an adjustable handle bar to keep the operator at a safe distance.

Features include a vacuum loss sensor that activates an audio-visual alarm in the event of a vacuum loss or 10% leakage; a slide control valve with a safety lock; a high capacity air-powered vacuum pump; gauges; and an air filter. Various vacuum suction cup materials are offered to match applications. www.anver.com Anver VPFL4-20-AIR vacuum lifter secures its load.

New 2-Day Conference

A powered skid lifter from Presto.

Skid lifter takes a load off The Powered Skid Lifter from Presto Lifts eliminates repetitive bending, lifting and carrying of a load to a workstation and raising it to the most comfortable working height.

Available in 20- and 27-in.-wide configurations, the lifters handle up to 2,200 lb. and will rise to a 31½-in. height.

A 12-volt maintenance-free battery powers the lift to maximum height in less than six seconds.

Units include a battery discharge indicator and an integral battery charger.

Among the standard safety features are an overload relief valve and automatic stabilizers that take over from the wheels and lock into place when the load is approximately 15-in. high.

The lifts are constructed with high-tensile strength steel that reduces weight without sacrificing strength and their standard forks are 44-in. long. www.prestolifts.com

May 4 – 5, 2010 A lift for lean production floors

Dematic’s modular conveyor: built on a universal slide channel.

Modular conveyor system boosts flexibility Dematic Corp.’s Rapistan Modular Conveyor System improves carton control, operates quietly and is a low energy consumer. And its modules drop into existing systems or easily change configurations.

Dematic, a supplier of logistics automation solutions in Grand Rapids, Mich., says all the conveyor modules are built on a universal side channel and include roller or belted straight sections, curves, inclines/declines, right angle transfers and steerable wheel diverters.

Many of the components are common and fewer parts are needed onhand.

The system is scalable and flexible: right-angle transfers and wheel sorters can be added quickly and the company says it retrofits easily into an existing conveyor layout.

Configure it with motorized rollers, standard AC drives or variable frequency drives. A segmented belt-conveying surface with automatic tracking and self-tensioning belts optimizes carton control. With the controls mounted onboard and connected with CAN Bus, parameters such as conveyor speed, accumulation mode and sleep mode are adjusted locally or from a central location. www.dematic.us

www.plant.ca

Wildeck Inc.’s hydraulic cantilever VLift provides a space-saving materials handling solution for leaner production areas.

Guide columns are constructed of 6-in.-wide flange structural steel with a state-of-the art hydraulic ram and large 2 ½-in. diameter dual pistons that deliver a smooth lifting motion.

Wildeck, a manufacturer of vertical lifts based in Waukesha, Wis., says the single-cylinder hydraulic system prevents twisting during operation and eliminates all moving hoses, cables and chains. And fewer components means easier installation, reduced maintenance, and longer service life.

The standard carriage dimension is 6 x 6 ft. with a lifting capacity up to 3,000 lb. and services heights up to 14 ft. Material safely loads or unloads in a C, Z, or 90-degree pattern allow for maximum installation flexibility. Models are offered for servicing heights of up to 14 ft.

Safety interlocks prevent the VRC from moving unless the gates are fully closed and they’re designed to open only when the carriage is at a designated level. Additional safety features include mechanical stops that ensure positive levelling with the upper deck; redundant overload protection that prevents the carriage from lifting if loaded to more than 120% of its rated capacity; and velocity fuses that safely control VRC decent. www.wildeck.com

Canadian PLANT 21

International Centre Mississauga, Ontario

Ontario’s Prevention System partners have joined forces to present Partners in Prevention 2010 – a new health and safety conference and trade show for all Ontario workplaces.

• More than 60 interactive sessions, workshops, professional development courses and keynote speakers.

• Leading practices, compliance advice, business solutions, take-away tools and a trade show featuring over 400 exhibitors.

• Co-locating events: Your Workplace 2010, CANECT 2010, MASC 2010 PRE-CONFERENCE EVENTS: MAY 3 • Small Business Forum 2010 • Leadership Summit 2010 www.PartnersinPreventionOntario .com/plant For more information or to request a copy of the Preliminary Guide: Tel 1.800.406.4272 or 905.614.4272 Fax 905.614.1420

PartnersInPrev_CDN_Plant.indd 1

2/16/10 11:38:29 AM

Departments

>> Postscript

Improving our abysmal innovation record

By Stephen Murgatroyd

T

here has been some substantiated concern that Canada is losing the innovation battle: according to the Conference Board of Canada, we are ranked 14th out of 17 nations when it comes to innovation.

In the past, Canada has invested in university research, development and commercialization activities in the vain hope of producing great commercial outcomes. The reality, of course, has proven the opposite. The roughly $14-billion an-

The roughly $14-billion annual investment in R&D to our “universities has produced only modest returns… ” nual investment in R&D to our universities has produced only modest returns, the result of the fact that universities are simply not designed to create commercial value from ideas and that they lack the incentives to do so.

It’s obvious the solution is not to continue spending even more on our universities to try and fix the path to commercialization.

The real solution is to focus energy on

where innovation really takes place—business. Rather than boost spending on R&D in universities, the federal government needs to use any new funds to significantly boost IRAP—the Industrial Research Assistance Program—and create incentives for private and public partnerships. More specifically, make focussed and strategic investments in key industry sectors it wants to grow and minimize investments in dying industry sectors.

The government must also boost funding for post-graduate student placements, especially those with a co-op component with business or leading to a post-doctoral position within business.

It’s worth noting that those countries ahead of Canada in innovation have a higher percentage of post-grads working in business, which is key to leveraging ideas and innovation.

Third, invest in applied research where it’s currently taking place, that is, in the colleges and polytechnic institutions.

It’s these institutions, after all, which are most closely aligned to industry, providing it with both the skilled people and the critical (and relatively inexpensive) applied work it needs.

Fourth, address the real lack of tier one venture capital in the country. Whether situated in Ontario, BC or Alberta, companies need to be “fed” two things—risk capital, supported by expert managerial talent, and realistic current market intelligence. Tier one venture firms supply both; banks and angel investors do not.

Stand firm Further, the government needs to partner with the provinces in developing appropriate local innovation strategies; simplify the processes it uses for securing IRAP funds; start pooling its intelligence; stop believing its own press releases; and start getting realistic about the challenges facing Canada over the next 25 years. It’s time for some leadership and courage on the innovation file.

Finally, the government needs to stand firm, in the interests of Canadian firms and researchers, against the persistent demands of the WTO and the US as they relate to intellectual property, demands which would retrospectively extend patent protection and toughen Canadian copyright laws. While fulfilling the demands would lead to more protection for the creators, it would come at the expense of those who wish to use the creations to generate wealth.

Canada must, in partnership with other countries that are also balking at the hegemony of intellectual property law demands of the US, show what a 21st century collaborative intellectual property regime could look like: A focus on open access, open source, rapid but short life for technologybased patents and a regime of copyright which is fair yet innovative.

There is a lot to do. The Canadian government released its budget just prior to press time. We will see by the budget’s content if the government understands the challenge and has the courage to act.

Stephen Murgatroyd, based in Edmonton, is a management consultant and writer. An expert in strategy and innovation, he was Dean of the School of Business at Athabasca University and founder of the world’s first online MBA. E-mail stephen.murgatroyd@troymedia.com.

22 Canadian PLANT

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