6. Flagship Initiative Development:
MANUFACTURING
To review the Manufacturing Industry Final Report in its entirety please visit our website at
www.actionsouthwest.com.
1. Make Manufacturing a Priority in the Region
Challenge
Urban and municipal governments in the southwest region have not made manufacturing a
priority. Popular perceptions of manufacturing are out of date, creating difficulties for
manufacturers in attracting young people or receiving the services they require too compete
effectively in rapidly changing global markets. The southwest region stands to lose investments,
businesses, and jobs if manufacturers cannot count on the support of their local communities,
urban and municipal governments, provincial and federal governments.
Solution
While the prime responsibility for managing change and competitive success rests on
manufacturers themselves; all levels of governments, key institutions and the public at large need
to become more aware of the important contribution that manufacturing makes to the
Saskatchewan economy, as well as the challenges and changes facing manufacturers across the
region. Officials at all levels of government need to be more aware of the importance of a
prosperous manufacturing base and the changes that are occurring within the industry. They
need to be more sensitive of the impact that their decisions have on manufacturing and therefore
on the economic base of the region. And, they should be more responsive and more proactive in
meeting the requirements of manufacturers.
General Approach
A coherent and integrated strategy is needed for the southwest region to elevate the awareness of
the manufacturing sector to enable manufacturers to respond to the challenges and opportunities
of a global marketplace. This strategic and integrated approach requires all levels of government – when it comes to improving the business environment for manufacturers or attracting and
retaining manufacturing investments in the region. The strategy must respond effectively to the
changing needs of manufacturers and should involve manufacturers, all levels of government, the
schools, research centers, labor groups, supporting financial and business services, as well as the
commitment of the public at large. A committee will be formed and continue to meet to develop
additional action plans and ensure the initial action plans are implemented.
Action Plan
- The creation of a manufacturing week should be considered to highlight the broad range
of manufacturing that exists in the southwest to change the perception that this industry is low-tech and to use it as a tool to reward our local players for the successes they have
achieved.
- Engage manufacturers in the region to collaboratively and cooperatively purchase
advertising space in major regional newspapers profiling the manufacturing industry.
These monthly profiles highlighting a manufacturing business of the week will highlight
products and services produced; employment opportunities available, and trends in the
industry. Currently the Southwest Booster, Prairie Post and other newspapers in the
region dedicate many pages annually to profiling the oil and gas industry. This has
worked well to build the profile of the energy sectors importance along with the
opportunities that exist.
- Implement a regional trade show for manufacturers in the southwest so companies,
potential job applicants, and regional residents can become more aware of what the
manufacturing industry has to offer (capabilities, skills and capacity, and economic
impact). The showcase will provide a forum that will enable southwest manufacturers to
network with other manufacturers and the region at large, developing business
relationships and displaying their capabilities. (See Manufacturing Industry Final Report
Appendix A-1 at www.actionsouthwest.com for detailed action plan)
- A complete listing of municipal tax incentives for manufacturers in the region and a
comparison to other provincial jurisdictions will be developed and distributed to regional
manufacturers and municipal governments in the southwest. Urban and municipal tax
policies should aim at strengthening investment in innovation and new technologies
through a decelerated property tax abatement / credit program on expanded facilities.
This local tax incentive would reward risk taking on the part of manufacturers (which are
more capital intensive than other businesses) and bring the regions tax system more in
line with the provisions and incentives offered in other jurisdictions, including the United
States. Each municipality is encouraged to have its own attractive policy dedicated to
business retention, expansion and investment attraction of the manufacturing sector.
- Continue quarterly meetings with the manufacturing cluster / network team to work on
behalf of southwest manufacturers to ensure long term competitiveness. Government
decision-making and regulatory approvals need to be less costly and timelier. Lean
management processes should be a priority and adopted to cut red tape and speed up
approvals at all levels of government. There should be greater harmonization of
regulatory compliance requirements across provinces, and between Canada and our major
trading partners, especially the United States. Effective enforcement of regulatory
policies is essential.
- An annual survey referred to as “CONTACT” will be implemented to keep in touch with
the needs of the manufacturing sector of the southwest region. This survey will be
customized to collect profile information (company capabilities, challenges, opportunities
and trends) on the many businesses and industries that make up the sector. Survey data
will be tabulated, and recommendations made to better address the challenges and
opportunities that our regional manufacturers face. The survey will be conducted in three ways: personal visits / one on one interview, mail out, and telephone. A task force will
be set up to implement and assess the short survey.
Ultimately “CONTACT” will connect with over seventy manufacturers in the region
annually to: assist in overcoming obstacles; assist with growth opportunities; provide
better information and understanding to local leaders on the strengths and weaknesses of
the areas business climate; express appreciation to existing firms for their important
contribution to the local economy; and educate area residents about the contribution that
regional manufacturers make to the economic and social well being and the quality of life
of the region.
- Industry and governments must work together to ensure that a reliable and cost-effective
supply of energy is available to fuel economic growth and that the transportation and
telecommunications infrastructure is expanded and upgraded to meet growing volumes of
business at the speed and capacity required by modern manufacturers doing business
around the world.
Possible Sources of Leadership: Private Sector / Industry Champions, Support Institutions,
Saskatchewan Rural Development, Saskatchewan Industry and Resources, Cypress Hills and
Southwest Regional Economic Development Authorities, Southwest Community Futures
Development Corporation, Chambers of Commerce.
2. Benchmark Manufacturing Competitiveness
Challenge
In order to develop accurate municipal policy intervention and regional resource allocation to
grow the manufacturing sector, regional stakeholders and municipal leaders must first identify
what the most competitive industries in the region are and secondly identify the different
components of an industry cluster and how the components relate to each other. This analysis
requires a mix of quantitative and qualitative analysis to identify the regional industries with the
greatest levels of exports, local employment, regional linkages, and productivity.
Economic regions are not jurisdictions like cities or provinces. Businesses do not particularly
care about political boundaries. They are primarily concerned with the extent to which a region
does, or does not offer a competitive advantage as a location. In other words, businesses are
interested in the extent to which the region’s economic foundation capacity inputs such as skilled
workers, technology, finance, infrastructure, etc, provide a strategic advantage from which to
achieve productivity gains over similar businesses in other regions. Where such conditions exist,
an economic region has a location advantage that will be sought after by companies wanting to
gain access to specialized location advantages. A region is therefore best conceived in terms of
the: geographic range of commuters, relative accessibility and density of critical buyer-supplier
linkages, and extent to which it offers reasonable access to specialized infrastructure and
economic institutions.
Solution
The southwest economy must be more precisely mapped in terms of businesses in the high value
added manufacturing, specifically focused on clarifying linkages and geographic clusters.
Knowing what clusters are present in a region, who their members are, and how they achieve
competitive advantage is an important element in understanding regional economies. Identifying
the most important sectors, actors, and interconnections in the region in advance can open our
eyes to key relationships within the region. A prerequisite to developing a cluster is the
identification of regional competitive advantage based on labor force statistics, unique regional
attributes, availability and quality of public and private infrastructure, and proximity to input and
product markets.
Competitive advantage analysis will address issues such as: Why are the companies located in
the region and what competitive advantages does the region offer? Who are the customers and
supplier industries; where are they located; how have they changed over time; and is geographic
proximity important? Do companies interact with other regional firms, trade associations, or
local universities; what issues seem ripe for collaboration among regional companies? What
important regional issues, like workforce development, transportation, telecommunication, or
regulatory issues, need to be addressed to promote the growth of the cluster? How is the regional
cluster being impacted by changes in technology and the international economy?
General Approach
Competitive advantage analysis will be conducted and used to write a detailed case study report
about the sources of competitive advantage, barriers to regional economic growth, and potential
avenues for public intervention. It is therefore recommended that the region undertake a series
of in-depth quantitative and qualitative institutional analysis of all regional clusters in southwest
Saskatchewan. The purpose of this study would be to identify successful examples of cluster
development and related policies at the regional level which other policymakers around the
province can emulate as well as identify new opportunities for public action.
- Perform in-depth qualitative analysis to develop case studies and cluster maps that
analyze each cluster’s special characteristics in terms of structure, growth opportunities,
and common issues on which cluster participants could collaborate.
- Examine the operation of existing regional consortium or clusters to assess their
effectiveness; identify best practices from which other provincial and national clusters
can learn; and recommend new opportunities for promoting inter-firm cooperation.
- Identify examples where public policy has been helpful to furthering clusters / consortia,
what modifications were needed and how they came about, drawing from those lessons
that might be more broadly applied in making certain public policies contribute to the
economic dynamism of the cluster and well being of the communities’ residents.
Action Plan
- Conducting Competitive Advantage Analysis (CAA) will focus on the assessment,
structure and performance of a region, to identify local strengths (competitive advantages
and potential for economic development; and provide a strong understanding of local
economies by “mapping” the SME population in terms of their industry, location, and
their linkages with each other and larger firms.
A full competitive advantage analysis would include an examination of local
infrastructure, markets, labor force, amenities, access to transportation routes etc. This
analysis will also focus on examining local industries / sectors to identify leading and
lagging sectors and their prospects for employment growth. CAA classifies sectors
according to their concentration of employment and assesses their growth / decline
compared to provincial trends. CAA will help identify opportunities for growing underrepresented
sectors that could provide required inputs for existing industries. It can also
provide insights for industry-targeting or niche marketing strategies, workforce
development as well as broad community strategic planning.
Regional competitive advantage changes over time in response to new technologies,
tastes and institutions. Growth prospects also change over time in response to market
forces and individual firms within an industry may exhibit employment and sales trends
counter to that of the industry as a whole. Therefore it is recommended to conduct a
CAA every five years to select the appropriate industries to target, and design programs
to assist specific sectors. A consultant will be hired to perform the CAA and purchasing
benchmark data from other jurisdictions will be entertained for additional comparative
analysis. The analysis will communicate how the region compares, identifying areas of
strength and areas for improvement. (See Manufacturing Industry Final Report Appendix
A-2 at www.actionsouthwest.com for detailed action plan)
Possible Sources of Leadership: Private Sector / Industry Champions, Support Institutions,
Saskatchewan Rural Development, Saskatchewan Industry and Resources, National Research
Council, Saskatchewan Research Council, Cypress Hills and Southwest Regional Economic
Development Authorities, Southwest Community Futures Development Corporation.
3. Improve Business Services to Manufacturers
Challenge
The development of a vibrant manufacturing sector in the southwest is more than good projects
with adequate capital. It is essential that projects include an experienced management team and
a well-developed business plan. Many of Saskatchewan manufacturers emerge from either a
scientific or production background and have limited experience in finance, marketing and human resource development. This lack of key business skills increases the likelihood that
projects and businesses will be challenged.
Solution
There is a perceived need to assist growth-oriented manufacturing companies in developing
successful businesses by providing experienced based options and advice in response to their
development needs. Existing manufacturers require a greater level of business services than
what is normally provided by local business development organizations and chambers of
commerce. The areas and topics of services that need to be provided to manufacturers in the
region are as follows:
- Strategic business and financial planning for growth through exporting in global markets.
- Sales and marketing – product design, product positioning, pricing, distribution,
promotion and identification of niche markets.
- Operations – engineering, performance, manufacturing, equipment and facilities.
- Merger and acquisition activities, consolidation and succession planning.
- Competitive intelligence, innovation and technology management.
- Commercialization of new products and services.
- Advanced manufacturing systems (AMS).
- Quality management systems (TQM and ISO).
- Strategic marketing / market research / specialized niche markets.
- Innovative organization and human resource management / team building and
compensation.
- Informatics management for growth, including electronic commerce.
- Benchmarking / diagnostics / productivity management and improvement.
- Inter firm collaboration and networking to build competitive advantages.
- Effective use of boards of directors and advisory bodies.
- Technical, particularly how to identify available technology.
- Financial support for the development of researched opportunities.
General Approach
Manufacturers will need easy access to best practice and technological and management
expertise from across the province, Canada as well as from other countries. Stronger linkages
reaching across institutional boundaries are needed among manufacturers, universities, colleges,
and research centers. A more strategic and integrated approach is needed in building local
centers of business service excellence based on combining innovation, manufacturing strengths,
and effective business support services.
Business development organizations (REDA’s, CFDC’s, Chambers of Commerce, Community
Economic Development Officers, local federal and provincial department agencies as well as the
private business services sector) will have to enhance their ability and work in partnership with
other resources to provide the expertise and services needed by manufacturers to grow. These business service providers will need to adjust and put together a plan to improve services to meet
the current needs of the manufacturing sector.
Action Plan
- Develop a Manufacturer’s Mentorship Council (MMC) to help manufacturers requiring
assistance. The main members of the council will involve private enterprise willing to
provide their expertise and time to the initiative. Program and resource use such as the
National Research Council, and the Saskatchewan Research Council will also be utilized
and strengthened in the region. These technology liaison officers will play an important
role in providing specific advice / mentorship and building linkages between
manufacturers, post-secondary institutions, and research centers. Strengthening
important linkages with the national and provincial research and granting councils, the
Cypress Hills College, and with industry sector organizations and private enterprise
(especially those relating to the manufacturing sector), the MMC will be an effective
instrument accelerating the coordination and optimization of research priorities and
business management opportunities.
The MMC will enable manufacturers to benefit from mentorship and the strategic advice
of experts and to consider issues that will be critical to the long-term growth of their
enterprise. The MMC will be composed of ten - fifteen individuals with expertise in
various areas of business management, research and development and manufacturing
processes with the ability and experience in providing advice on the service areas
mentioned above. To access the MMC along with a one stop shop list of skills and
resources available to help business expand and grow, and access the technical advisors
to assist in the due diligence process a toll free number will be available at 1-877-773-
GROW (See Manufacturing Industry Final Report Appendix A-3 at
www.actionsouthwest.com for detailed Action Plan).
Possible Sources of Leadership: Senior or semi-retired scientists, engineers who have
demonstrated career experience in the conduct of successful research projects,
government laboratories, Cypress Hills Regional College, National Research Council,
Saskatchewan Research Council, Cypress Hills and Southwest Regional Economic
Development Authorities, Southwest Community Futures Development Corporation,
Saskatchewan Rural Development, Saskatchewan Industry and Resources, accounting
firm, law firm, marketing firm, various private enterprises and business service providers.
- Coordinate a “learning seminar series” for manufacturers including luncheon speakers,
complete workshops and short courses on the various areas of topics that manufacturers
require information and assistance on to grow their business. A schedule of workshops
and learning seminars will be developed for a complete calendar year, updated and
distributed in the region on a monthly basis. This training event calendar will also
include seminars that are taking place in other locations outside of the southwest region
and province. Those learning sessions to be created, customized and delivered right in
the region will involve booking speakers in advance, advertising and promoting the event
to manufacturers in the region. Some learning sessions may have a registration fee to cover the cost of professional facilitation. Other sessions will be free and utilize the
expertise of federal and provincial government specialists that can speak on particular
topics in question.
Possible Sources of Leadership: Saskatchewan Rural Development, Saskatchewan
Industry and Resources, Western Economic Diversification, Southwest Community
Futures Development Corporation, Cypress Hills and Southwest Regional Economic
Development Authorities.
- Conduct Export Diagnostics / Readiness Assessments for companies looking at
exporting. Also ensure the Southwest Center for Entrepreneurial Development along
with its key partners becomes a one stop shop for exporting services. To achieve this,
mature partnerships need to be developed with the Saskatchewan Trade and Export
Partnership and International Trade Canada.
Possible Sources of Leadership: Saskatchewan Rural Development, Saskatchewan
Industry and Resources, Saskatchewan Trade and Export Partnership, and International
Trade Canada.
4. Improve Access to Financial Capital
Challenge
There has been a significant demand for project funding and business investment in the
southwest region. However implementation of business expansion opportunities and green-field
projects is limited by minimal access to appropriate funding / capital (institutional and private
investor). Some of our brightest, most promising small and medium sized businesses continue to
face difficulty obtaining risk capital to finance their growth. For small local companies, it is
even more of a problem, especially when they need less than $1 million.
Solution
The region needs to retain, attract and encourage investments in our capacity to create growth and prosperity in the manufacturing sector. If we want to improve our record in process
improvement and product innovation, business expansion and global product mandates we need
a business environment conducive to manufacturers investment needs. The solution will involve
facilitating access to financing for start-up and growth companies by improving knowledge of
the region and the manufacturing sector among lenders / investors, and linking manufacturing
entrepreneurs to lenders/investors/funding agencies.
Manufacturers require a full range of international business and financial services – including
support for exporting and importing goods and services, inward and outward investment,
identifying reliable business partners, moving people and accessing skilled personnel and
technologies from around the world. Manufacturers also need access to cost-competitive insurance services, especially with respect to product liability insurance for exporters into the
United States.
General Approach
The southwest region needs a strategy aimed at retaining, attracting, and encouraging
investments in our capacity to create wealth. If we want to improve the region’s record of
investment in process improvement and product innovation, business expansion, and global
product mandates, we need a business environment that is second to none in rewarding
successful risk-taking on the part of our manufacturing sector, financial sector and angel capital
sector.
Financial institutions need to be encouraged to develop a sounder understanding of the changes,
processes, and risks involved in modern manufacturing – and to structure their services
accordingly, and manufacturers looking for capital need to be aware of the needs of the investor
(be investor ready). However, not all the needs of each manufacturer in the region can be met
through institutional financing alone. Therefore, additional sources of debt and equity capital
need to be developed that meet the financial needs of manufacturers on a local basis across
southwest Saskatchewan.
The approach taken to improve access to financial capital will involve organizing a systematic
effort to assist manufacturers and industry support businesses through the financial life cycle by
helping meet their needs for: financial information, expanded angel networks, and financial
management.
Action Plan
- Assemble and disseminate tools / techniques for making manufacturers investor ready, as
it is determined that a major part of the problem of finding financing is related to the noninvestor
readiness of entrepreneurs / small and medium sized enterprises, who do not
understand the needs of investors and the reality of risk financing. These techniques
delivered through workshops, seminars or round table dialogue will prepare
manufacturers to present their cases for investment to angels and other sources of
financing in an appealing and business-like way. (All tools will be accessed from the
federal government at http://ccip.ic.gc.ca as well as the provincial government
www.ir.gov.sk.ca).
- Hold a one-day symposium “Angles on Angels”: How to Find Money for Your Business.
The symposium will be designed for small business owners and entrepreneurs looking for
financing and/or equity investment of up to $1 million. The event will cover the
financing/investment possibilities from “love money” to bank debt, quasi-equity and “going public”. Legal issues involved with attracting angels into a business venture will
also be covered. Speakers will include a panel of local businesses that had obtained
financing in various ways.
Representatives of the Business Development Bank of Canada, SaskWorks Venture
Fund, Working Ventures Fund and the Golden Opportunities Fund will make
presentations on their venture capital programs as well as the Saskatchewan Securities
Commission. The event will be advertised through a brochure mail drop to all
manufacturers in the southwest and newspaper and radio advertising for eight weeks prior
to the event. Several press releases will be sent out along with other partner / link
advertising on various sites and literature.
- Organize a “Steps to Growth Capital” seminar. This seminar / workshop will run on
Tuesday and Thursday evenings from 6:00 p.m. to 10:00 p.m. over a four week period. It
will be advertised in the regional newspapers for three weeks and through chambers of
commerce, business development organizations, along with other provincial and federal
agencies. Consultants including an accountant, a financial planner and a training course
developer will be hired to deliver the seminar.
Topics covered will include:
- Methods of analysis and terminology used by potential investors in evaluating the
financial state of a company.
- An examination of why and in what circumstances companies with growing sales
may need an injection of capital.
- The introduction of tools that can help to determine how much and what kind of
financing a company needs.
- The “Steps to Growth Capital” workshop materials and course will be accessed
from http://growth.ic.gc.ca
- Coordinate investor forums for small and medium sized manufacturers to make short
presentations to potential investors. Potential angel investors will need to be identified
and have a specific interest in those ventures being presented. Invitees will be made up
of four different types of people: advisors (accountants, lawyers, consultants); financiers
(lenders, venture capitalists, established investors); successful entrepreneurs; and centers
of influence (politicians, prominent executives, etc.) Advisors will be important because
they often represent potential investors who don’t want their interest known. Several
presenters will be introduced through these intermediaries. If advisors become convinced
that forums work, they will refer other clients and will even occasionally invest
themselves.
Lenders are necessary because most venture financing is part debt and part equity.
Especially for private investors, having the support of a banker early in the process often
acts as a catalyst in moving the deal forward. It is also important bankers attend the
forums because their presence can attract other participants that might not have come
otherwise. Centers of influence give the event credibility and can offer all manner of
support to future endeavors. Local politicians will be given a chance to speak briefly to
build goodwill for the group. (See Manufacturing Industry Final Report Appendix A-4 at
www.actionsouthwest.com for action plan detail)
- Develop an angel investor network within the region, from whom business advice can be
sought and to whom investment proposals can be presented. The primary objective is to
assist a target market of small and medium sized manufacturers with growth potential to
access venture capital though angel investors. The network would provide assistance to
manufacturers with annual revenues of $250,000 or more that show growth potential,
either high growth or constant growth.
This network would involve the development and maintenance of a solid roster of
potential angels. A data base would include approximately 25 angels in the region –
experienced investors with an annual income of more than $100,000 and a net worth of
more that $1/2 million. To keep the network excited, the onus is put on the investment
facilitators to ensure that opportunities presented for discussion at any given time are of
high quality. In the event that deals brought to the network are of poor caliber, the angel
network will lose trust and participation will falter.
- Operate and promote a worldwide Internet database network to link opportunities with
investment. This database will be broken down into two parts: firms looking for
financing and risk capital investors not just restricted to the regions territorial boundaries.
Registration is free, and record validation is made by local economic development offices
acting as franchisees.
The southwest region has at their service, local economic development agencies or
departments. The practitioners who work there are very familiar with the local economy
and have a lot of credibility in the business community. The needs that local
entrepreneurs / small and medium sized enterprises, reveal to these economic
development agencies often involve financing. The offices have the knowledge required
to assess investment proposals and provide assistance to entrepreneurs. It is
recommended that economic development offices become a franchisee, promote and
utilize the already existing Internet local database network called Capital Connexion
http://www.capital-connexion.com (See Manufacturing Industry Final Report Appendix
A-5 at www.actionsouthwest.com for detailed action plan).
Possible Sources of Leadership: Private Sector / Industry Champions, Financial Institutions,
Regional Economic Development Authorities, Community Futures Development Corporation,
Farm Credit Corporation, Saskatchewan Rural Development, Saskatchewan Industry and
Resources, Financial Advisors / Brokers, Legal Advisors, Chartered Accountants, Nekaneet First
Nations.
5. Improve Knowledge Infrastructure to Develop Skilled Labor
Challenge
A key challenge facing the southwest regional economy is the supply of available labor and
skilled labor. Firms locating in a community, whether they are local startups or firms moving
into the community need a labor pool in order to meet current and future needs. Generally,
communities with at least 1,000 people in the labor force have a population that is large enough
to attract and sustain a reasonable level of services and amenities that entice people to live in
those communities. These communities have a critical mass of labor, population, services and
amenities that give them the potential to grow and expand. Most of our communities in the
southwest do not have the required target number of existing labor force and the related
community services and amenities to attract new labor. As certain sectors in the region expand,
there will be a growing demand and competition for labor / human capital, with the right skills
and abilities.
As the regional economy becomes increasingly diversified and sophisticated in its adoption of
modern technology, the bar is raised even further for those potential employees competing for
jobs. Higher levels of skills and education are now being required by employers and in particular
the manufacturing sector. The Canada West Foundation’s Looking West 2004 Survey found that
issues around skilled labor are important not just to southwest Saskatchewan but to Western
Canada in general. When asked to rate the importance of ensuring a skilled labor force for the
coming years, nearly 71% of westerners including southwest manufacturers rated this issue as a
high priority. Also, According to the Canada West Foundation, 73 of 76 major industry
associations in the West expect moderate to severe worker shortages within the next five years.
And 41 of those associations said the number of students currently graduating from post
secondary institutes, will not be enough to meet the demands of their industries.
Access to a sufficient quantity of highly skilled labor in a competitive environment is frequently
cited as a concern among southwest manufacturers. Some companies are doing innovative
things with regards to recruiting and skills training, but some serious gaps remain. The
demographic challenges the region is facing include: an aging workforce that will result in a
future labor shortage; a growing aboriginal population with more than half of the aboriginal
population less than 24 years of age but there are minimal first nations people residing in the
southwest; and labor market challenges in skilled trades. The regions working age population is
not growing, and is increasingly clustered around larger urban centers such as Swift Current and
is highly mobile.
As companies consider making large capital investments with the expectation of 20 or 30 years
production to extract the maximum return, uncertainty about the labor environment in the region
increases their risk. With increased activity in other key economic sectors, projected skill
shortages could hinder growth in the manufacturing sector, send companies and individuals
elsewhere looking for opportunities and change our way of life.
Solution
The most important resource to business is the knowledge, skill, and productivity of its
employees or its “human capital”. Recent research shows that investment in human capital is
three times more important to economic growth over the long run than is investment in physical
capital. And the most important development resource for sector clusters and their industries is a highly educated workforce and the availability of a pool of skilled technical workers. In fact
research from the Conference Board of Canada has concluded that the key factor driving growth
of sector clusters and their industries is the low opportunity cost of gaining access to a ready
supply of skilled human capital that attracts managerial talent and entrepreneurs into the region.
People drive economies, and we must act now to make sure we have the people that businesses
need to continue to thrive. A growing manufacturing sector cluster will signal opportunity and
its success stories help attract the best talent. The concentration of firms reduces the risk of
relocation for employees because of the increased choice of potential employers. The greater the
concentration of firms, the easier it could be expected for firms to attract skilled resources from
other regions.
General Approach
The manufacturing sector needs a better alignment of training and skills development to meet the
current and future skills needs. Tools that need to be developed to attract, retain and build
human capital fall into the following types of challenges and related actions: on the job training,
alternative training, promotion of college and trades training enrollment; and better communicate
a positive image of careers in manufacturing.
Addressing this challenge is complex and cannot be carried out by any single government,
secondary and post secondary education institution, or industry in isolation. It will require a
coordinated effort of all three sectors working together to ensure there are enough skilled
workers to get the job done. More on the job training, expanding aboriginal involvement in the
workforce, and increasing awareness among young people of opportunities in the trades are just
some of the recommendations required. There is no silver bullet, but there are some practical,
concrete actions that could help alleviate the shortages.
Action Plan
- Develop a Southwest Skills Pipeline Network. This network will be regional in focus
with a mission to ensure that the southwest region and its key industry sectors are able to
obtain the skills needed for competitive growth on an ongoing basis. The objective of the
Skills Pipeline Network is to create an advantage in the ability to match skills supply to
demand in this region—whether for graduates or existing workforce. The Southwest
Skills Pipeline Network will utilize the skills and support of the Labor Attraction and
Retention Committee (LARC) already in place, and led by the Swift Current Chamber of
Commerce and Cypress Hills Regional College. This committee will be responsible for
the following:
- Identify skill needs shared in common across industry clusters that need to be
addressed. These may be needs for preparation of future employees as well as
retraining of existing workforce. Note that recruitment of skills will certainly be
part of this agenda.
- Evaluate Supply: Ensure that the match between existing training (at all levels)
and regional manufacturing cluster needs using existing courses and curriculum, but also explore new modes of delivery, timing or cost that may respond to
workforce or student needs.
- Develop New Training: Plan new curriculum to meet growing or unsatisfied
demand for occupational skills—whether individual cluster or across clusters.
- Create New Certificates or Diploma: Explore and develop new certificate or
diploma programs that might create a regional skills advantage for one or more
clusters.
- Ensure responsiveness: Manage the quality of supply and demand through
ongoing skills development activities.
- (See Manufacturing Industry Final Report Appendix A-6 at
www.actionsouthwest.com for detailed action plan)
- It is important to change outdated perceptions of manufacturing and build interest in the
extensive range of career opportunities that manufacturers offer young people today. At
the same time, high schools should be doing more to encourage and prepare students for
careers in manufacturing. Companies must contact guidance councilors to educate them
on various career choices opportunities within their company. High school tours can also
be provided to educate the students and promote employment within their company.
- Form a Business-Education Partnership. Many communities in the U.S. have formed
business education partnerships to work together on long-term education-to-employment
issues such as preparing youth and underemployed groups for the workforce. A business
education partnership could work to invest in the youth and underemployed groups to
ensure their readiness for skilled positions in the community. Activities could include
one or more of the following: job shadowing, plant tours, speakers in the school,
mentoring, internships, apprenticeships, or summer jobs in industry for teachers. A
partnership might include K-12 school reps., key employers of skilled labor, unions,
higher education institutions, chamber reps., etc. The issues involved are complex, thus
the commitment needs to be strong with a long-term perspective for a partnership to
succeed.
- Saskatchewan’s colleges and technology institutes are recognized as leaders in skills
development, technical training, and tailoring programs for local needs. But, more is
needed. Training programs need to be more customized to the changing needs of
manufacturing and delivered on a just-in-time basis. Training Institutes such as the
Cypress Hills Regional College and Saskatchewan Institute of Applied Science and
Technology should be invited to trade shows and industry meetings to learn about the
needs within the industry and the surrounding companies. Meetings should be
collectively set up between training institutes and advisory committees to discuss course
planning.
- The regions apprenticeship programs need to be strengthened by encouraging the
participation of more young people in trades training, improving the delivery of training
programs, providing adequate financial assistance for apprentices, and building greater
support and collaboration among manufacturers and colleges. Apprentice programs need
to be expanded so that training on modern equipment can be utilized. Many of the training institutes and technical schools do not have access to training on appropriate
equipment because they often do not have the money to purchase modern equipment;
therefore arrangements for classes to come in and train/expose the students to the
company’s equipment can greatly improve the skills of the graduating students looking
for employment. This will give the student a chance to experience working within a
regional company and increases the chances of them coming back for employment after
course completion.
- Saskatchewan’s two universities are recognized as leaders in innovative research. But,
more should be done to strengthen ties between universities and manufacturers. Stronger
partnerships are needed between manufacturers and educational institutions to strengthen
in-house training capabilities and provide continuing adult education and skills upgrading
programs. More practical experience for teachers and students is needed in engineering
and business programs. And, curricula should better reflect the advanced technological,
management, marketing, and financing requirements of modern manufacturing.
Representatives from the manufacturing sector need to sit on the Regional Advisory
Council of the University of Saskatchewan. This council meets in Swift Current
quarterly, with a purpose to improve education and program delivery of the university
and to better meet the needs of the southwest region.
- Potential employees can also be accessed by contacting immigration, local multi-cultural
/ aboriginal groups, and open door societies to determine if there are any members who
are not utilizing their skills to full potential and would like a chance to do so. Work with
the Federation of Saskatchewan Indian Nations along with federal and provincial
Departments of Immigration to target First Nations peoples and immigrants to locate in
southwest Saskatchewan. Companies will have to work through the provincial nominee
program so immigration approvals can be fast tracked for skilled personnel recruited for
manufacturing jobs. Communities will have to provide incentives to encourage
immigration to small communities, provide a venue for the exchange of cultural values to
increase cross cultural understanding, build the foundation for minority group
partnerships, and develop programming to welcome and integrate immigrants in the
community.
Possible Sources of Leadership: Private Sector / Industry Champions, Support Institutions, K-
12 School Divisions, Cypress Hills Regional College, Maverick School, Chambers of
Commerce, Saskatchewan Career and Employment Services, Human Resources Skills
Development Canada, Nekaneet First Nations, First Nation Educator, Friendship Center,
Provincial Nominee Program, Cypress Hills Regional College.
6. Develop a Regional Brand to Build Image and Identity
Challenge
The current internal and external image of the southwest region is unclear and undeveloped.
This has allowed for the fostering of an environment of doom and gloom associated with rural
southwest Saskatchewan. This doom and gloom has significantly affected the attitude of many
regional manufacturers, related businesses, employees and residents. Many see no future in the
southwest and this affects their outlook in terms of developing new initiatives or new business
opportunities that could positively affect the growth and wealth of the region. Also,
Saskatchewan’s business tax structure is viewed by manufacturers as uncompetitive and as a
disincentive for investment in the southwest region.
The negativity in the southwest is just as harmful to the world beyond the regional, provincial
and national borders. The view that the southwest is in terminal decline does not make it an
attractive place for new investment attraction and immigrants, whether they are from urban
Saskatchewan, outside of the province or outside of the country. Why would some new potential
business or immigrant move to southwest Saskatchewan buy a house and invest capital when
they are told that it is in a death spiral (doom and gloom image and identity).
Solution
Southwest Saskatchewan must improve its image as being open for investment and prove it by
building an identity that it is a competitive location for businesses to invest, manufacture,
employ, and grow. One of the keys to the success of Alberta is the view “that Alberta is the
place to be and invest”. This positive outlook (brand/identity) is not only ingrained in the minds
of Alberta residents, but prevails among people living outside Alberta, as witnessed by the views
of many southwest residents towards Alberta. This positive attitude (brand / image) builds upon
itself and has been a very powerful catalyst in creating the booming Alberta economy.
General Approach
One method of improving attractiveness for people to relocate or invest is for the region to brand
itself—communicating the opportunities offered by all sectors / clusters and their related
industries. Doing this, the region will be known as moving into the mainstream of economic
development and increase its profile. The regional community might decide to establish a
campaign promoting the southwest’s strengths around its competitiveness: business costs and
quality of life factors: affordability (cost of living), security, health care, education, recreation,
accessibility, etc.
Current businesses and residents need to understand or be reminded of the positive qualities of
the region and why businesses and residents chose to live and invest here. Once the region
adopts and begins to live its new brand, firms suggested that a good target audience to market the
brand to, to attract new financial and human capital would be Aboriginal persons and immigrants
to Canada from surplus labor areas.
Action Plan
- A project committee will be created to explore developing a southwest regional brand.
Focus groups from different municipalities in the region could be used to gather support
and develop initial ideas. These ideas could then be refined and presented to the region
through town hall meetings and/or surveys. A thorough regional dialogue would be
necessary to gain consensus on a vision, identity or brand that works for the entire
southwest region. Without community/regional buy-in, any chosen image is not likely to
stick. Once consensus is achieved, a plan for implementing the selected vision, identity
or brand could be developed. Just like choosing a name, developing an image can be an
emotional endeavor. Therefore, it may be advisable to contract with an outside branding
consultant to coordinate this project since they are paid, in part, not to get their feelings
hurt. (See Manufacturing Industry Final Report Appendix A-7 at
www.actionsouthwest.com for detailed action plan)
Possible Sources of Leadership: Private Sector / Industry Champions, Support Institutions,
Urban and Rural Municipality Officials via the Southwest Municipal Government Association,
Tourism Swift Current, Horseshoe Tourism, Southwest Tourism Association, Nekaneet First
Nations, Cypress Hills and Southwest Regional Economic Development Authorities, Southwest
Community Futures Development Corporation, Chambers of Commerce officials;
representatives from business; marketing, public relations, and design professionals or educators.
7. Catalyze Innovation Through Business Networks
Challenge
Today’s global trading environment is a very difficult one for small manufacturers. The
difficulty stems from heightened competition from both advanced and developing economies;
increased demands for quality, service, responsiveness and value; fragmenting niche markets;
and accelerated technological change. In many ways, this new environment is well suited to
small and medium sized companies. Customer intimacy, speed and flexibility are the hallmarks
of successful businesses. The newest advances in flexible production technology and
management practices can put small producers on a competitive cost footing with large
manufacturers formerly dominant due to economies of scale. In a world of fragmented niche
markets, small and medium sized firms are able to innovate rapidly and produce efficiently in
small batches can do very well in global markets.
However, the advantages of small and medium sized manufacturers are balanced by important
constraints that limit their ability to upgrade their products and processes and penetrate global
markets. These include limited ability to:
- Access professional services such as engineering, management consulting, accounting,
market research and worker training programs.
- Upgrade production capabilities, which might require investment in expensive new
process technology.
- Acquire intelligence on global markets.
- Establish credible presence in overseas markets.
- Conduct extensive Research and Development.
- Access adequate financing for investment.
- Fulfill larger contracts requiring large volume production capacity or multiple skills.
Solution
To be highly successful in a global economy manufacturers must focus their business strategies
on rapid product and process innovation aimed at meeting customer needs in new, better, faster,
and less expensive ways. Innovation of new products, production systems and business methods
must become a priority within the company and their supply chains. Innovation is essential for a
manufacturer’s survival as well as for their long -term growth. In today’s business environment
manufacturers must specialize in the products and services they provide and work more
interdependently (form business networks) to increase efficiencies, develop new products and
markets and achieve growth.
Sometimes known as partnerships, collaborations, or strategic alliances, a business network lets
firms capitalize on what they do best, share risks and profits, while remaining independent. A
business network can be seen as a “virtual company” a “think tank” for innovation, benefiting
from enhanced inter-firm productivity and new expertise. By being interdependent,
manufacturers collaborate more in innovative research, design, and product development, sharing
best practices, and pooling resources to acquire the expertise they need to implement continuous
improvement programs. Business networks can be created in a number of ways to help
companies improve profitability and achieve efficiencies that aren’t possible when companies
work alone. They enable firms to access resources and to develop projects normally available
only to larger firms. Using this kind of teamwork, companies can expand markets, lower costs
and improve profits.
Business networks can be used to rationalize purchasing and training, to improve product
development, to share the cost of an expensive piece of equipment, to share export development
and marketing efforts, to increase access to equity and capital formation, access human and
financial resources in order to develop and bid on larger scale projects and help gain access to
markets once beyond our reach, and improve the bottom line. Business networks are a proven
strategy for small and medium sized companies, which are facing huge changes in the way they
do business now and in the future.
General Approach
Throw a party……If you want to stimulate innovation, gather a group of executives from growth
oriented companies and buy the drinks and hors d’oeuvres so they can build relationships.
According to authors, Richard Lester and Michael Piore, innovation is a social process. When
you bring a diverse group together to discuss varied topics in a safe environment, ideas will be
explored and tested leading to innovation (Harvard University Press, 2004). Well, we may not be able to throw parties each month, but it is recommended that the region continue to support
the development of functioning business networks and strategic alliances within the
manufacturing sector; as well as support the education and the awareness on the importance of
business networks as a strategy needed to increase productivity and capacity utilization levels,
innovation and ultimately grow the manufacturing sector and regional economy as a whole.
Gauging interest in business networks will ultimately require manufacturing industries to look at
the global trends that affect their industry. Are there international competitors in the local
market? If so where are they from? How is their performance fulfilling needs important to
customers, and how fast are they improving? What are the technological trends in the industry?
What actions will have to be taken to be competitive in ten years? These are not easy questions
to address or answer given the hectic pace of day to day concerns. Possibly one of the best ways
to get networking going is to investigate these questions, put the resources in place to get the
answers, and publicize the results as widely and often as possible. A shared understanding of
real competitive concerns is the most basic motivator for modernization and networking efforts.
Action Plan
- Continue with the Action Southwest Business Networks Coalition ASBNC, to become a
service center, a strong factor creating institution for helping firms develop business
networks and strategic alliances in the manufacturing sector. The ASBNC will be
responsible for:
- Institutionalizing ongoing communication among and between firms, and with
outside entities as required (such as specialists, designers equipment makers and
customers). Federal, provincial and municipal governments will continue to play
a catalytic role in the ASBNC by organizing key firms, nonprofits, and public
institutions to create cluster councils / networks at regional and provincial levels. While the public sector can play a catalytic role, private sector leadership is
essential in providing the necessary credibility and direction.
- Promote and encourage dialogue and cooperation among manufacturing cluster
participants to develop a collective vision of the regional and provincial
challenges and opportunities of the manufacturing sector. These ongoing round
table dialogue consultations help increase the presence of characteristics closely
associated with cluster dynamism such as self-awareness and associative behavior
among firms.
- Performing the research needed, whether on new technology or international
markets, in order to identify threats and opportunities for the network.
- Utilizing what is learned about competitive barriers to organize the crucial service
or services, whether through private consultants or public institutions, that
participating forms need.
- Performing shared front office functions.
- Actively housing and managing collective investments made by the network in
such things as training resources, international market databases, and possibly
advanced manufacturing machinery.
- Establish flexible business networks between manufacturers in the southwest region.
Flexible manufacturing networks have gained recognition as a new competitive model for
small and medium sized manufacturing firms. Flexible manufacturing networks
encompasses many forms of cooperation, they are broken down into factor creating and
production networks.
Factor Creating Networks
The most basic and important type of cooperation between firms happens in factor
creating networks – collective efforts to build and sustain an infrastructure of factors
tailored to an industry’s needs. The factors are made available to all participating firms
no matter how small. This activity will be accomplished through the economic
development partners of the southwest working in close cooperation with local
governments, educational and research institutions. The factor creating networks will
engage in several key activities, they are:
- Put together training and apprenticeship programs, and operating training centers.
- Investigate, introduce and even house collective investments in process
technology.
- Sponsor university (and other research institute research).
- Work to promote quality practices and certification in the industry.
- Collect up to date, industry specific information on international markets and
competitors, performance benchmarks, technological and market trends.
- Organize trade fairs and other broad industry marketing activities.
- Facilitate social interaction and information-sharing among members, which may
set the stage for greater collaboration.
In factor creating cooperation – firms still compete fiercely, but also recognize the need
to participate in continuously upgrading the pool of factors from which they draw. The
factors can be considered pre-competitive in the sense that they benefit all firms without
curtailing competition. Their purpose is to raise the standards of domestic competition so
that the industry as a whole is competitive internationally.
Production Networks
Upon this broad solid base of specialized infrastructure, many smaller groups of firms go
further, undertaking joint production and marketing work. Each group takes its own
unique, often highly fluid form, and evolves over time in response to market
opportunities and demands. This interdependence is referred to as a production network
and means any group working to penetrate markets together.
Production networks will involve smaller groupings of firms that build on a strong factor
base and work together over time in the following ways:
- By transforming existing supplier-customer links into partnerships designed to
coordinate scheduling, product development, and process improvement efforts.
- By combining individual specialties in order to jointly develop new products,
complete product lines, or turnkey projects.
- By penetrating distant new markets through joint marketing efforts.
Production networks are invariably built upon an existing base of sophisticated “factor
creating” networking. Small and medium sized manufacturers without effective, broad
based factor-creating mechanisms underpinning their efforts will not be successful in
joint production and marketing unless they direct a considerable amount of energy toward
the basic competitiveness-building work and trust building. (See Manufacturing Industry
Final Report Appendix A-8 at www.actionsouthwest.com for detailed action plan)
- Enable business interdependence though business capacity exchange website. An
interactive website will be developed to focus on sharing and exchanging machine and
labor capacity between manufacturers within the region. The introduction of new and
improved products and services, the adoption of new technologies and improved business
processes, and the upgrading of employee skills – remains a priority with southwest
manufacturers, although investments in innovation have fallen as cash flow has declined
overall in the industry over the past three years. The conception of this project was born
out of the desire to effectively deal with the cyclical nature of skilled labor demand in the
manufacturing industry. According to Saskatchewan Industry and Resources,
Saskatchewan manufacturing companies have historically operated at a 75% machine and
labor capacity utilization level and fall behind the Canadian average by 6 percent in the
area of innovativeness of the manufacturing sector.
Generally communities with at least 1,000 people in the labor force have a population
that is large enough to attract and sustain a reasonable level of services and amenities that
entice people to live in these communities. These communities have critical mass of
labor, population, services and amenities that give them the potential to grow and expand.
However the southwest has many communities that fall well below this required level of
workforce, services and amenities to attract people. This is negatively affecting
employee recruitment and retention forcing some companies to move to larger centers to
find skilled labor.
The capacity exchange website will create substantial benefits to both the companies and
the employee by creating a consistent demand for labor as well as pulling in the labor
supply. This project is a proactive approach to business retention for rural regions, and it
is hoped that the companies will realize the benefits derived from cluster co-operation in
the region. (See Manufacturing Industry Final Report Appendix A-9 at
www.actionsouthwest.com for detailed action plan)
- Develop a training program and train ten new Business Network Advisors in the region.
A training program that has been developed by Confederation College in Ontario will be
customized for Saskatchewan. The training program will ensure the success of future
business network advisors in delivering effective broker services and contribute to the
quality of the initiative. Broker services need to be developed to help manufacturing
firms discover what they need and where to find it. Services include analyzing market and technology trends, encouraging cooperation and collaboration in the areas of
marketing, sales, and input purchases, providing applied research, labor training, and
business assistance programs.
Business Network Advisors have a critical role working independently to build
confidence and trust within a network, ensuring that the needs and concerns of each
partner are addressed. The business network advisor helps corporations assess their
sustainability for a network strategy, assess market opportunities, identify strategic
alliances, and develop a plan for growth of the business sector in question. The business
network advisors help in navigating through the network information process, from sector
growth strategies, through business plan development and then to implementation. (See
Manufacturing Industry Final Report Appendix A-10 at www.actionsouthwest.com for
detailed action plan).
- Conduct 10 community informational training sessions for manufacturers to learn about
strategic alliances and business networks. The purpose of the training session will be to
help launch the process of forming alliances among small and medium sized businesses.
Each training session will involve working through a self evaluation guide book to
determine company readiness and if business networks are appropriate for their business
challenges and opportunities. The sessions will also involve advice and direction on how
to develop a functioning business network. Toolkits will be made available for
companies looking to pursue a business network.
- Facilitate a regional manufacturing trade show event to initiate and foster networking and
business-to-business relationships. Invited participants will include local manufacturers,
government and provincial purchasing groups, and other manufacturers outside the
southwest region depending on the capacity. The manufacturers showcase would be held
in the region where companies from the surrounding area can display their capabilities at
no cost. This show would be used to help companies collaborate with each other on
issues and form partnerships for initiatives such as flexible buyer networking so that
common buying and shipping can be done collectively. Talks and training can be
provided at this show such as quality management, inventory control, purchasing
practices, etc.
- Secure program funding to help with the subsidization of private sector consulting to help
companies form business networks. A fund will be established to assist with the further
development of business networks. This fund will allow for businesses to apply for
subsidization of the cost of a qualified business network advisor. Eligible networks will
include three or more companies engaged in one or more cooperative activities aimed at
new business opportunities, new markets or building or maintaining a competitive edge.
(See Manufacturing Industry Final Report Appendix A-11 at www.actionsouthwest.com
for detailed action plan)
Possible Sources of Leadership: Private Sector / Industry Champions, Support Institutions,
Saskatchewan Rural Development, Saskatchewan Industry and Resources, Southwest Centre for
Entrepreneurial Development, Cypress Hills Regional College, Chambers of Commerce, Cypress Hills and Southwest Regional Economic Development Authorities, and Southwest Community
Futures Development Corporation.
8. Establish a Lean Manufacturing Consortium
Challenge
For most of the past two decades, Canada’s gross domestic product (GDP) per capita relative to
the United States has been on a downward slide, year after year. In 2003 for example, the gap in
GDP per capita (at purchasing power parity) stood at $6,501. This represented a shortfall of
about 17% of the U.S. level. Research has determined that the main cause for the income gap
(i.e., in GDP per capita) is the lower Canadian productivity levels. According to Saskatchewan
Industry and Resources, Saskatchewan manufacturing companies have historically operated at a
75% machine and labor capacity utilization level and fall behind the Canadian average by 6
percent in the area of innovativeness of the manufacturing sector.
Solution
Quality and increased productivity can be improved and controlled by implementing internal
company systems such as a quality management system and Lean Manufacturing along with the
appropriate training and hard work. Saskatchewan companies are embracing lean principles and
getting results – reduced inventory,
increased productivity, and shorter
production and delivery times. Lean
Enterprise is all about reducing
inefficiencies and waste from the first
point of customer contact to the point of
delivery of the product. In today’s
global marketplace with trans-border
trade issues and a higher Canadian
dollar, companies need to be more
competitive. Exposure to Lean events
is invaluable in today’s business
environment.
“There are a number of companies who are
ready and committed to form a Southwest
Lean Manufacturing Consortium and start
working together. We feel this is the basic
fundamental root to building other functioning
business networks to create new products, new
services and more innovation.”
Doug Howorko, BNA
Manufacturing Leadership Team
General Approach
Saskatchewan companies like Doepker Industries, Brandt Engineered Products, and Cover-All
Building Systems are recognized for their implementation of Lean and have shared their success
stories with their peers at international Lean Manufacturing conferences. Lean principles will be
introduced in the southwest region to educate manufacturers on the principles of lean manufacturing. The objectives are: to learn what lean enterprise is and how it can improve a
company’s performance; dialogue with other Saskatchewan companies interested in improving
their productivity and competitiveness; and determine how lean principles can be applied
throughout an organization.
Action Plan
- Promote and host a Lean Principles workshop in the southwest region. This workshop
will go beyond the “what” and “why” of lean. This is an interactive session where people
will gain an understanding of the main lean tools and their practical application. People
will leave the workshop with a better picture of how to apply lean throughout their
organization, along with an assessment of the impact on doing lean the right way and
how they measure up to best practices today. Participants that should attend include
business people from all sectors wanting to learn how to reduce inefficiencies in their
operations and improve their bottom line; and are in a position manage change within
their organization; and who:
- Want to begin their lean journey in the right direction.
- Have attempted lean but did not receive the expected results.
- Just want to learn more about what lean is and how to do it.
(See Manufacturing Industry Final Report Appendix A-12 at www.actionsouthwest.com
for detailed action plan)
- Form a Southwest Lean Manufacturing Consortium / Network. A lean manufacturing
consortium / network simply put, has a focus on eliminating waste so that all processes in
the total system, process, or production line add value from the Customer’s perspective.
The key success elements of this consortium include:
- Non-competing companies
- Members pay a membership fee which allows a pooling of resources to bring in
leading consultants and training sessions
- Members have a say in the events planned and on the inclusion of new members
to the group
- Size is limited
- Members are willing to learn from each other and share their best practices
- There are plant visits to member companies
- The size of the company does not matter
(See Manufacturing Industry Final Report Appendix A-13 at www.actionsouthwest.com
for detailed action plan)
Possible Sources of Leadership: Private Sector / Industry Champions, Support Institutions,
Saskatchewan Rural Development, Saskatchewan Industry and Resources, Canadian
Manufacturers and Exporters.
9. Use Government Procurement to Enable Growth
Challenge
Local manufacturers and related industries are not capturing an adequate market share of
government procurement.
Solution
Government can stimulate cluster development in the manufacturing sector by being a
sophisticated buyer of products and services. Manufacturers need to form networks both within
and outside the cluster to leverage capacity and potential to capture government procurement
opportunities.
General Approach
Manufacturers in the region need to become more aware and active (working interdependently)
in engaging procurement by governments and public agencies.
Action Plan
- Promote and encourage southwest manufacturers to attend the annual Saskatchewan
Property Management Corporation “Public Sector Procurement Showcase”. The
Saskatchewan provincial government is opening the door to public sector procurement by
hosting a purchasers’ showcase. The provincial government knows it can be daunting to
find necessary time and resources to make contact with each and every public sector
agency that might be able to use the products and services southwest manufacturers
provide.
The purchasers’ showcase will make that task much easier by bringing together dozens of
public sector agencies all under one roof. All the manufacturers have to do is walk in the
door and introduce them-self. For Saskatchewan suppliers already doing business with
the public sector, the purchasers’ showcase will provide the opportunity to find out if
there are other organizations to do business with. Also at the showcase will be free
seminars and guest speakers. To register, visit: www.spmc.gov.sk.ca/showcase.
- Work with the provincial “corporate procurement committee”. This committee consists of
members from major Saskatchewan corporations, representing crown corporations, the
private sector and government departments. The members of the committee are VP’s of
the purchasing division. The mission of the Corporate Procurement Committee is to
promote Saskatchewan economic growth by developing quality, competitive suppliers of
goods and services in Saskatchewan. (See Manufacturing Industry Final Report
Appendix A-14 at www.actionsouthwest.com for detailed action plan)
Possible Sources of Leadership: Private Sector / Industry Champions, Support Institutions,
Saskatchewan Industry and Resources, Saskatchewan Corporate Procurement Committee,
Saskatchewan Property and Management Corporation, SaskTel, SaskPower, other Crowns.