Innovation and automation are key to survival, auto parts supplier says

Despite the recent economic downturn, Martinrea International Inc. has managed to remain a tier-one supplier to the automotive sector. Rob Wildeboer, executive chairman and co-founder of the company, says that ongoing technological investment, innovation and automation are key to survival and growth. During his opening address at Canadian Manufacturing Week (CMW)/WeldExpo 2010 last week at the Toronto Congress Centre, Wildeboer shared his insights with a crowded room of manufacturers.

"I think that automated processes allow you to reduce your manufacturing costs. It allows you to increase your throughput," Wildeboer said. "The reality is that automation has allowed us to be as efficient as we can possibly be. The interesting thing about automating where you can, and where it makes sense, is robots don’t break down if you maintain them well. It allows you to increase your throughput for your factory size, and being more efficient allows you to basically price your product so that you have contribution margin when your competitors might not. So we automate wherever possible, wherever it makes sense."

He explained that Martinrea invested in machines used for bending and end forming at its fluid systems plant in Brampton, Ont., and replaced 14 people per shift in the process. "That means that effectively you take a lot of cost out of the process. It makes you effective. That means that we can compete, for example, with plants in China or anywhere else [that] otherwise have a labour cost advantage. And the labour that goes into our products are from the people that make the equipment and that automate for us, which are good, high paying, skilled jobs in Ontario."

On the topic of innovation, Wildeboer explained that little process improvements go a long way. "You have product innovation and you have process innovation. In the manufacturing world, a lot of the improvements are process improvements. A little bit improved every day. If we have our people that are committed to improving processes…you’re going to be able to take cost out through the life of the program. We have programs that last seven years. We need to reduce cost, automate [and] innovate every day…Innovation is often the mindset of the people you have and the opportunities in which you create for them."

During his keynote address, Wildeboer also listed his top tips for making manufacturing in Canada more competitive. On his list is better access to the North American market and a more secure international border.

"The best thing we can do for our manufacturing industry is ensure access to our largest markets in North America. Probably the best way to do that is deal with the security fears and concerns of Americans," Wildeboer explained. "It is time to knock down the border between us to the greatest extent possible, and recognize that our failure to have a secure international border hurts this industry. It has got to be harder for people to come into Canada from abroad."

He also added that in order to be competitive, Canada has to: be the lowest tax jurisdiction for making things; make service costs more competitive; fully understand environmental needs before "emasculating" the economy with prohibitive regulations; have a great infrastructure; maintain a focus on its strengths; have government policy that rewards and encourages hard work; obtain trained and educated people by encouraging training and apprenticeship programs; have less people in government and more people working in the private sector; and have a co-ordinated, consistent and not duplicative government.

"I think if we make progress on that top 10 list," he said, "we will be amazed at what innovations we can come up with."

The Canadian dollar did not make Wildeboer’s list for tips on how to remain competitive. Why? "My view is, it is what it is. We should be prepared for a strong dollar. By spending dollars on productive assets and efficiencies, with the right tax incentives, we can build better companies."

Click here to view an on-camera interview with Martinrea’s Rob Wildeboer.