7. Network/Flagship Coordination & Implementation:
Taking Action

Building the Foundation

The time has come to lay the groundwork for sustaining the momentum that has already been started through this initiative. Together, we must begin tailoring our future actions to the specific economic needs of industry in the region and realizing that unification is the seed of growth for the Southwest.

The final stage of the ASBNC strategy involves, once again, the coordination of numerous regional leaders who will work together with the ASBNC to begin taking action by implementing four industry networks and a select number of flagship initiative action plans.

Implementing the Networks

The ASBNC has proven that big things can happen with one small step. And the best way to begin building the foundation of a united region would be to create four official industry networks that would be profiled over time to the entire region. Actual formalized networks that would bring industry together to act on new opportunities to grow their business, sector and ultimately, our region while illustrating the power of partnerships.

Select members of our industry leadership teams agreed to take part in structuring a formal alliance with one another, and to show their commitment each member endorsed their signature in a letter of intent. To continue demonstrating the power of collaborations and partnerships these four industry alliances will be profiled on the ASBNC website (www.actionsouthwest.com) and serve as a role model to the region.

To begin forming the actual alliances all members of our industry Leadership Teams received personal copies of the ASBNC Self Evaluation Workbook and ASBNC How to Network Book to review. These manuals are part of the ASBNC Self-Help Toolkit created to teach small and medium sized business owners and senior managers how to begin forming their own strategic alliance or building on existing alliances in order to allow them to be more competitive.

The Self Evaluation Workbook provides a sneak preview of the sort of questions, issues and concerns businesses will have to ask themselves about their companies as they prepare to form a business network. A booklet with a series of worksheet spreads that can be used by potential networkers as a kind of readiness guide.

The How to Network Book provides a ready reference to the networking process, information on how to get started, seeking partners, forming the alliance and actually implementing the arrangement.

The ASBNC is committed to educating the entire region about the power of partnerships through business networks and are offering these self-help toolkit manuals free of charge on our website.

Once the members learned what was required in formulating an actual network the next step was determining what their industries network would be and how it would be structured. Further, the ASBNC felt it was important to know what those who participated in the process learned from working together and any suggestions they may have to assist us in moving forward. This information is detailed, by industry, below:

MANUFACTURING

Network Analysis

Through the five round table meetings that took place from October 2004 to February 2005, it became clear that most manufacturers needed and wanted to learn and practice the fundamentals of becoming lean if they wanted to compete in the global market place. Lean is about reducing waste and creating efficiencies to increase productivity levels. Therefore the Manufacturing Cluster / Network Team have chosen to implement a “lean manufacturing consortium- network”. The analysis supporting this decision is detailed below.

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. Also, in recent decades, Saskatchewan has been under-performing relative to other provinces in Canada. 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.

In particular the firms in the southwest region of the province frequently lack critical mass, with an absence of trust and linkages at the all-important local level. This collaboration or working interdependently does not come easily to many of our firms and support organizations. But building early successes in non-threatening arenas provides the foundation for later, bigger collaboration and increased productivity levels. Forming a network of manufacturing small and medium sized companies with a purpose of reducing waste and creating efficiencies is such a network that is non-threatening and if implemented successfully will be the first step leading to further, more complex functioning business networks.

In an effort to increase our productivity levels, reduce the imbalance in income per capita and ultimately boost our standard of living, increased focus is now being placed on fostering the Southwest Region’s innovation capacity and performance in the context of a global economy. The global economy is all about speed, quality, flexibility, innovation, and building critical mass. This new style of doing business demands a team approach at a local level, a networking approach. Therefore, a lean manufacturing consortium- network has moved to the forefront as the first functioning business network for the manufacturing sector of the southwest region.

Research shows a clear link between increased productivity levels and the levels of innovation through lean manufacturing consortium – networks at the provincial, regional and corporate levels. The synergistic effect of manufacturers working together collaboratively to reduce waste and create efficiencies will result in innovative solutions to problems, and ultimately make the manufacturing sector more competitive resulting in significant new investment and jobs in the region.

Saskatchewan companies that have embraced lean principles are getting results – reduced inventory, increased productivity, and shorter production and delivery times. Lean manufacturing 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.

Network Implementation

To begin the development of a functioning lean manufacturing consortium- network the following steps were undertaken:

• On March 31st, 2005 the Action Southwest Business Networks Coalition cosponsored and promoted a Lean Principles workshop for southwest manufacturers. This introductory workshop went beyond the “what” and “why” of lean. This was an interactive session where people gained an understanding of the main lean tools and their practical application, learning how to reduce inefficiencies in their operations and improve their bottom line. Participants left 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. In total 25 participants representing 11 companies attended the workshop. From this group, five companies expressed great interest in learning more and forming a southwest lean manufacturing consortium – network.
• The next step will be to form a southwest lean manufacturing consortium - network. The southwest lean manufacturing consortium - network simply put, will have a focus on eliminating waste so that all processes in the total system, process, or production line of a company, add value from the customer’s perspective. A second information session in partnership with the Action Southwest Business Networks Coalition, Saskatchewan Rural Development, Saskatchewan Industry and Resources and the Canadian Manufacturers and Exporters will be held in September 2005. This session will involve working through the “self evaluation workbook”, reviewing the “how to network workbook” and solidifying the development of a letter of intent, cooperation agreement and business plan for the network involving all of the companies that are interested in proceeding further in the network.

BUSINESS PLAN

Background:

Lean manufacturing is a production process and a philosophy developed by Toyota, and increasingly adopted by other manufacturing sectors all over the world. The concept of lean is to meet customers’ requirements providing them with what they want, how they want it, when they want it, with the quantity they want and with the lowest possible cost for the producer. Lean accomplishes this by the identification and elimination of waste from the manufacturing process. Wastes are defined as non-value added activities to the customer. These activities occupy over 95% of the total production time in the average company. In other words the average company spends only five percent of its time doing actual production. The significant amount of waste in the production process shows how great the potential for lean can be for those companies committing to be lean.

Saskatchewan businesses have started to incorporate lean operations programs. Some have trained personnel “in house” to improve efficiency in processing lines, work stations, layouts and work cells. Southwest Saskatchewan businesses, regardless of their production capacity or their location, can benefit from lean manufacturing. “Lean Enterprise” or “High Performance Manufacturing” is a program developed and administered by the Canadian Manufacturers and Exporters (CME). This program teaches members of the consortium how to identify and eliminate inefficiencies and increase their productivity.

Although thought of in the context of manufacturing or processing, lean is a concept that can be applied to any value stream, and wherever there is waste. Any organization (service, retail, healthcare, environment, construction, maintenance, and government) in rural or urban Saskatchewan would benefit from incorporating lean concepts into their operation.

However, it is important to note that without serious top-down enthusiasm and daily attention to setting it up, the lean experience will not be a successful experience. The lean experience is a continuous effort and it requires total and continuous commitment from all individuals in the organization. It also requires effort to collect data on every step of the process of producing services or products. Companies’ or organizations’ presidents, once they embark on the process, must recognize this and try to keep all individuals involved and motivated about the lean process. Employees need to be prepared to change and the organization’s leader needs to communicate to them that they are the major engine to make this new “lean” process work. This can be achieved by sharing information, empowering employees and training them about the lean process.

Currently there are three lean manufacturing consortiums in Saskatchewan:

1. South Saskatchewan Manufacturing Consortium:
• Brandt Industries
• Dumur Industries
• Dutch Industries
• Stewart Steel Inc.
• Ralph McKay Empire
• Watergroup Companies Inc.
• Canada Post
• Precision Industries
• Conserva Pak Seeding Systems
• Raider Industries
• Sasko Windows and Doors Inc.
• Sweeprite
  
  
2. Consortium of Manufacturing Excellence
• Canada Post
• Cover-All Building Systems Inc.
• Doepker Industries
• Industrial Machine and Manufacturing Inc.
• Bourgault Industries
• MIFAB Manufacturing
• Northern Steel Industries Ltd.
• Vanguard Inc.
• Precision Metal Fabricating Ltd.
• Schulte Industries Ltd.
• DSI-Thiessen Team
  
  
3. Northern Saskatchewan Consortium of Manufacturing Excellence
• SED Systems
• International Road Dynamics
• Dawn Foods
• Burton Cabinets
• Siemens Laserworks
• CNH Global
• Hitachi Canadian Industries
• Norampac
• Standard Machine
• Combine World

Mission and Objectives:

Through the development and implementation of a lean manufacturing consortium – business network, 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 southwest Saskatchewan companies interested in improving their productivity and competitiveness.
• Determine how lean principles can be applied throughout an organization.
• Form a functioning, self sustaining lean manufacturing consortium – network.

Structure:

• The Business Network Advisor will provide support and assistance to the lean manufacturing consortium – business network.
• The Canadian Manufacturers and Exporters (CME) will provide the required leadership moving the consortium forward.
• Business network team members will represent various manufacturing firms throughout the region. Any other interested business from a different sector will also be welcomed into the consortium - network.
• Each member company has one seat on the consortium’s board of directors and is responsible for choosing the seminars for members.
• The CME brings in the speakers / trainers at reduced cost to the consortium - network members. Seats not filled by consortium members are offered to outside companies.
• The key success elements of this consortium – business network 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

Key Tasks:

Members of the lean manufacturing consortium- network will meet quarterly to obtain the necessary training and knowledge required to move the company toward lean principles.
Lean manufacturing requires the involvement of everybody in the company. You can’t change what you can’t see; therefore proper motivation for all individuals in the company to learn how to see wastes in the manufacturing process is crucial.

There are five key tasks required in the journey to becoming lean.

• The first step to get lean is for the change agent to understand and get educated about the lean process. This might be done by reading books on lean thinking, or taking work-shops.
• Once the decision to get lean is made, companies may hire an outside consultant or trainers to work with their staff on the lean process.
• The next step in lean manufacturing is to map the value stream. Value is defined in terms of a specific product at specific price through direct dialogue with specific customers. This step involves mapping every step in the organization’s production process to identify where resources (time and money) are being spent. Value stream analysis usually identifies three types of actions occurring in the production process:
• Actions that create value;
• Actions that create no value but can not be avoided with the current technology; and
• Actions that create no value and are avoidable. The elimination of this type of actions will allow dramatic cost savings.
(It is important to note that most companies in Saskatchewan involved in the lean process don’t do this step very rigorously since they have more than one product and it is difficult to do value stream mapping for all the products. In Saskatchewan the key drivers of getting lean are to reduce hours put in jobs, reduce inventories, and reduce the space needed for the production process.)
• After eliminating wasted actions, the next step is to make the value-creating steps for the manufactured product flow continuously. In this step the company needs to make the manufacturing process flow without interruption, stoppages, errors and waste. This process is called one-piece flow.
• The last step of the lean process is perfection. It is difficult to get it right the first time. As a result, the company continues with the lean process by continuously identifying and removing wastes from the manufacturing process. This allows the company to offer a product which is very close to what the customer really wants.
• The following examples show the type of courses that may be delivered in the consortium- network:
• Lean Product Design – the workshop presents a set of leading-edge methods for slashing waste, increasing speed and efficiency, and design products for high-margin, sustainable manufacture.
• 5S and the Visual Factory – Explains the 5-S’s, Sieri (Tidy), Seiton (Orderly), Seiso (Clean), Seiketsu (Standardize) and Shitsuke (Self-Discipline) and how these concepts contribute to a safe and effective company. Discussion on how to make workplaces “visual” where key performance measures are displayed simply and effectively.
• High-Mix, Low-Volume – daylong learn by doing simulation. Participants become part of a fictitious aircraft manufacturing company that must adopt Lean principles to improve its competitive position to land a major contract.
• Effective Office – determining how the office fits into the business and how it can add value to the process.
• Lean Purchasing – discussion on supply chain management, supplier development, and streamlining the purchasing business process.

Team and Responsibilities:

• Business Network Advisor – Doug Howorko: Provide direction, support and assistance to the consortium – network to help facilitate and accelerate the process. Contact: 885 6th Ave N.E, Swift Current Saskatchewan, S9H-5C2, email- dhoworko@rd.gov.sk.ca, tel- 306-778-8416, fax- 306-778-8526.
• Support / Advisor – Scott Summach: Provide support and advisory services to the consortium. Contact: Saskatchewan Industry and Resources, Innovation Place, Saskatoon, SK, email – ssummach@ir.gov.sk.ca, tel – 306-933-7207.
• Consortium – Network Coordinator: Brian McCready of the Canadian Manufacturers and Exporters to provide initiative and coordination of training activities for network participants. Contact: #1931 – 10060 – Jasper Avenue, Edmonton Alberta, T5J-3R8, email- Brian.McCready@cme-mec.ca or www.cme-mec.ca, tel- 780-426-6622 or 1-800-642-3871, fax- 780-426-1509.
• Network Participants: To be confirmed, and will provide continued involvement and support in reaching the training initiatives in becoming a lean enterprise.

Challenges:

Lean manufacturing is necessary for the success of southwest Saskatchewan manufacturers, and could be incorporated into their strategic plan, however only a few companies in Saskatchewan have gone completely lean. The reasons for this could be:

• To quickly “lean” a business and make rapid progress, the decision to go lean needs to come from the top of the organization. If the company does not have this top “change agent”, then the effectiveness of the conversion is dependent upon each individual in the company taking on the responsibility for the value stream he/she works on without the assurance of a commitment to see the process through to completion.
• Lean manufacturing is neither a quick fix nor a one time task. For lean manufacturing to work, it should be done continuously and adopted as an essential component of the business. It is necessary for lean companies to have someone responsible (lean leader) for continuously assessing every value stream if long-term benefits from lean are to be achieved.
• Lean results might be immediate in some areas, but it typically requires 3 to 5 years for the benefit of the lean process to be fully realized. This raises the risk that efforts to become lean might be dominated by the need to address short term issues.
• Lean implementation is difficult and might be disrupting. It involves changes, which might face resistance from managers and workers alike. There is also a risk that the new process will be abandoned under stress, and leadership is needed for a business to get and stay lean.
• Another problem is that the short term immediate financial needs of shareholders and managers are often the priorities, not trying to create and maximize value for the customer and long term profitability and efficiency that can be achieved through becoming lean.

Expected Results:

Lean consortiums are industry led – members choose the training they need. They focus on technology and knowledge transfer – members learn from each other best practices and the use of new technologies. Ultimately lean boosts productivity and competitiveness and is needed as part of a business retention and growth strategy. Some of the major benefits include the following:

• Lean differs from traditional batch-and-queue manufacturing because the system strives for a one-piece flow. In one-piece flow, one part is moved through various processes with minimum delay between processes. This requires the whole operation be designed so that the production process covers the least amount of floor space possible.
• Lean reduces several kinds of waste in manufacturing. Those wastes are: producing a product not requested by customers or which does not meet their needs, doing more processes than actually needed, unnecessary movement of workers and products, mistakes or defects that require correction, and workers waiting for product or information required for the process. Lean manufacturing reduces significantly the waiting and traveling time.
• In lean manufacturing, the manufacturer only produces what the customer wants, when he wants it. The manufacturer determines the pace of production, or time needed to produce the number of parts required. The manufacturer could respond to a change in demand by adjusting the number of operators and number of shifts. This method is often more cost effective than investing in high volume equipment. Carrying reduced inventory further reduces overhead costs.
• Lean manufacturing might lead to higher employee morale and more enjoyable work environment, since employees are actual participants in the lean process making decisions that contribute to a higher quality product, increased consumer satisfaction and improved company bottom lines. Lean manufacturing can also lead to more stable demand, since customers become much more reliable when they know they can get what they want when they want it.
• Moving from batch production to one-piece flow and reducing the amount of floor space required will save the manufacturer money. The money saved by using lean manufacturing can be reinvested into the business, pay off debt, be redistributed to employees as incentives or add to bottom line profit.
• Results from existing lean consortiums - networks include:
• Reduced inventory
• Decreased bank debt
• Product delivery times reduced
• Engineering time reduced
• Space requirements reduced
• Productivity increase
• Travel time reduced
• Process time reduced
• Gross margin increased

Resource Requirements:

Other lean manufacturing consortium – business networks in the province have been supported by Saskatchewan Industry and Resources, National Research Council – IRAP program. These support agencies provided subsidized the cost for outside consultants to bring their expertise to the participating companies.

Budget:

Eight companies will be required to fulfill the financial requirements of a quality functioning lean manufacturing consortium – business network. Under this program, it is estimated that each member company will pay $2,500 to join the consortium and an additional fee to become a CME member.

Timing:

Full operation of this business network is expected to begin October 2005. Recruiting a total of eight participants for the lean manufacturing consortium will be completed by August, 2005. The original participants of the network will be committed for a period of three to five years, which is the recommended time for a company to become lean.

COOPERATION AGREEMENT

Participants:

• Doug Howorko, Business Network Advisor, Saskatchewan Rural Development.
• Scott Summach, Support / Advisor, Saskatchewan Industry and Resources
• Brian McCready, Coordinator of Consortium, Canadian Manufacturers and Exporters.
• Chuck Thompson, Director of Operations, Stark and Marsh Chartered Accountants.
• Brad Nelson, General Manager, Honey Bee Manufacturing

Goal of Cooperation and Areas of Cooperation

The prime goal of this network is to initiate, develop and implement a lean manufacturing consortium – business network by October 2005. Cooperation is required from members to provide time for development of the network, and implementation of lean enterprise fundamentals, as well as provide limited funding assistance for this activity.

Legal Form of Organization

This organization is strictly and unilaterally voluntary and bears no legal requirements. The interests of the group are geared towards improving their efficiency and productivity through the completion and implementation of lean enterprise fundamentals.

Rights and Obligations

Cooperation will be required amongst members in the following areas:

• Provision of time to review training materials.
• Provision of time to attend training presentations.
• Provision of limited funding as required.
• The provision of support in this initiative.

Cost and Income Distribution

A certain commitment of funding from member companies will be required. This funding is approximately $2,500 per company. Funding will offset training and consultant costs for companies learning and implementing the fundamentals of lean enterprise.

Investments and Finances

Funding from various government departments and related programs is expected to be obtained to help subsidize the cost of training and consultants. Contributions are expected to be $2,000 to $3,000 per company.

Business Administration and Internal Accounting

The Canadian Manufacturers and Exporters will provide all administration and internal accounting. Generally accepted accounting principles shall be applied as required.

Management and Decision Making

The driving force behind this network is the member companies. Support and leadership will be provided by the Canadian Manufacturers and Exporters, along with the Business Network Advisor.

Progress Reporting and Development Tasks

It is anticipated that the implementation of this business network will commence in October 2005. Reporting progress will take place on a quarterly basis.

Acceptance of New Members

The leadership activity promotes the admittance of new members. A much larger representation of manufacturing sector companies in the southwest is encouraged.

Agreement Termination

This agreement will remain in effect until such time as alternative activities take precedence.

Confidentiality and Information

All financial and business dealing of member companies will remain confidential.

Conflict Resolution

Conflict resulting from activities of this business network will be resolved via democratic vote at committee meetings.

Lessons in Working Collaboratively

It is not always easy to get the key movers and shakers involved during the early stages of forming a lean manufacturing consortium - business network. Some manufacturers were sitting on the fence watching skeptically to see if this particular initiative would take off or flounder. Senior leaders need to feel that there is going to be a pay-off for their time and involvement. An early, and simple, measure of the success of a lean manufacturing consortium - business network will be the willingness of senior participants to front up to the next meeting; an early warning sign is if they delegate or are ‘no-shows’. Maintaining this attention will be dependent on generating early benefits for the stakeholders.

The challenge with recruiting various sizes and types of manufacturers into the lean manufacturing consortium – network was that some of the smaller businesses issues and opportunities had little relevance with some of the larger manufacturers. Also, synergies for further potential networks or strategic alliances may only get established between the larger firms on the team that share common, issues, opportunities, capabilities, and capacity.

Research on business networks is remarkably consistent in its description of the institutional environment required to nurture and support industry and sector needs. Recommended are changes in political, social and economic conditions to encourage trust and collective action. Indeed inter-firm competition is discouraged because such rivalries impede networking and the provision of collective services such as labor training programs, marketing, information, technology development and transfer, and new product development. Thus, the success of business networks in a region, in part is determined by changing beliefs, in particular, the belief that our competitors are more global rather than regional.

The beliefs and institutions in the region need to readily change in order to permit widespread development of business networks. Cooperative behavior, understanding information and committing assets collectively within the manufacturing sector in the region needs to grow.

 

ENERGY

Network Analysis

An analysis of the Self Evaluation Workbooks completed by the Leadership Team yielded the following results relating to why network:

• To achieve competitive advantages of scale, scope and speed
• To stimulate new business opportunities
• To reduce costs

The most critical success factors identified are:

• You must be passionate about your business
• You must have something in common
• You must explore every potential avenue in order to be successful
• You must be prepared to cooperate with competing companies to achieve the networking objective
• You must be prepared to provide some funding
• Senior management MUST see and realize an economic gain

Of the numerous areas of cooperation, the following areas are ranked from 1 – 3:

1. Human Resource development
2. Cooperation on production/servicing
3. Collaboration on Purchasing

A review of the flagship initiatives indicates the existing labour shortage and the potential for an even larger shortage is the prime concern of energy companies. Not withstanding the volatility of the commodity market relating to energy, labour issues appear to dominate during both high and low pricing situations. The ability to attract a local labour force and retain these workers has a significant effect on the bottom line. Success in this area reduces costs in subsistence, travel, availability and promotes local training initiatives. Very importantly, it also improves the economic picture in the Southwest thereby increasing employment attraction.

For this reason, the Leadership Team decided to Network on the prime flagship initiative. This initiative calls for activity to increase the volume of local employees through the provision of education, environmental and job opportunity presentations to all graduating Grade XII students in the Southwest.

Network Implementation

In order to satisfy the intent of the selected flagship initiative and the resulting networking required, a number of steps were undertaken:

1. Frank open discussions on the competitive nature of the energy sector to dispel any negative images.
2. Commitment from the Leadership Team to work towards a common goal.
3. Involvement of the educational institutions to remove any thoughts of a ‘pie in the sky’ approach.
4. Development of a realistic action plan that provided detailed steps that Leadership Team members felt was within grasp.
5. Development of a simple straightforward business plan that was easily read and covered all bases.
6. Development of a letter of intent that specified goals, objectives, and most importantly, potential funding commitments.
7. The potential for adding new Leadership Team participants once a quality product was developed and ready for implementation. This had the effect of eventually reducing potential financial funding commitments from the existing team.
8. Most importantly, the Business Network Advisor must be prepared, have a thorough understanding of the legitimate business processes and must provide this knowledge in a strong interactive mode with members.

BUSINESS PLAN

Mission and Objectives:

• To promote safety, educational and environmental awareness of the energy sector in the Southwest.
• To develop a one hour presentation on all areas of the energy business from geographical formations through the production, servicing and extraction of energy.
• To deliver this presentation to all graduating high school students in the Southwest.
• To promote employment opportunities in the energy sector to Southwest residents.

Structure:

• The Business Network Advisor will provide support and assistance to the business network.
• One member company representative will Chair the business network.
• Leadership Team members representing various energy sector companies will complete the team.
• Areas of cooperation are identified previously. Each party expects a return through increased local employment levels via the initiative implementation. Enhanced student awareness of the safety, environmental and educational aspects of the energy sector in the Southwest will reap additional benefits.

Key Tasks:

• Development of a one hour presentation on the energy sector in Southwest Saskatchewan.
• Review of presentation content with educational institutions.
• Finalization of presentation material and medium, i.e. PowerPoint.
• Secure times and dates for presentations in the various high schools.
• Secure energy companies involvement in presentation dates.
• Determine and initiate monthly follow-up meeting to discuss progress.
• Develop reporting procedures to ensure all participants are updated.

Team and Responsibilities:

• Business Network Advisor – Terry New, BNA: Provide direction, support and assistance to the network to ensure implementation of the flagship initiative.
  
  
• Chairperson, Energy Business Network - Erroll Castle, Cochrane Engineering: Provide initiative and coordination activities of network participants.
  
  
• Network Participants – Gordon Olson, Area Superintendent, South Saskatchewan Business, Husky Energy, - David Monuik, Rogue Gas Search Inc, - John Kennedy, General Manager, Diamond Energy Services Inc. - Provide continued involvement and support in reaching initiatives.

Resource Requirements:

• Time and involvement from network team members.
• Limited funding assistance for presentation development and delivery.

Budget:

• Identified as approximately $1,500 to $2,000.

Timing:

• This network is expected to continue on an ongoing annual basis.

Expected Results:

• Significantly enhanced awareness of the energy sector contributions to Southwest Saskatchewan.
• Improved awareness of the strong safety considerations of the energy sector by high school students.
• Potential long-term employment opportunities for local residents realization.

COOPERATION AGREEMENT

1. Participants:

• Erroll Castle, Cochrane Engineering - Chairperson
• John Kennedy, Diamond Energy Services Inc.
• Gordon Olson, Husky Energy
• David Monuik, Rogue Gas Search Inc.
• Terry New, Business Network Advisor

2. Goal of Cooperation and Areas of Cooperation

The prime goal of this network is to initiate, develop and implement the primary flagship initiative identified through October 2004 to March 2005. Cooperation is required from members to provide time for the development, review and finalization of the activity as well as provide limited funding assistance for this activity.

3. Legal Form of Organization

This organization is strictly and unilaterally voluntary and bears no legal requirements. The interests of the group are geared towards improving economic conditions in the Southwest through the provision of safety, environmental and educational means. A member shall chair the network with all other participants providing support to achieve the successful completion of the primary flagship initiative.

4. Rights and Obligations

Cooperation will be required amongst members in the following areas:

• Provision of time to review presentation materials.
• Provision of time to attend presentations to answer student questions.
• Provision of limited funding as required on a volunteer basis.
• The provision of support in this initiative.

5. Cost and Income Distribution

A certain commitment of funding from member participants is required. This funding is approx. $1,500 - $2,000 in total. Funding will offset presentation development costs and the actual delivery of the presentations.

6. Investments and Finances

There are no binding financial commitments to members of the business network. Should funding be required, proper accounting mechanisms shall be developed and reported upon.

7. Business Administration and Internal Accounting

Generally accepted accounting principles shall be applied as required.

8. Management and Decision making

The driving force behind this network shall be the chairperson supported by the Business Network Advisor and committee members.

9. Progress Reporting and Development Tasks

Timelines are subject to time constraints of the network members. It is anticipated that implementation of the primary flagship initiative will occur in the fall/winter of 2005/2006.

10. Acceptance of New Members

The leadership actively promotes the admittance of new members. A much larger representation of energy companies in the Southwest is encouraged.

11. Agreement Termination

This agreement will remain in effect until such time as alternative activities take precedence.

12. Confidentiality and Information

All financial and business dealing of member Companies will remain confidential.

13. Conflict Resolution

Conflict resulting from activities of this business network will be resolved via democratic vote at committee meetings.

Lessons in Working Collaboratively

• The energy industry is strongly competitive within itself.
• Meeting with energy personnel in boom times is almost impossible.
• Contact with most companies on programs such as Action Southwest can best be accomplished through one-on-one meetings over lunch periods.
• Energy companies are, when available, more than willing to share information and expertise as long as their competitive advantage is not compromised.
• Issues of a common nature such as impending and existing labour shortages and potential solutions to it are of considerable interest to the industry.
• Facilitation is a prime requirement when engaging various companies to dialogue.
• Most energy related companies already have numerous industry associations representing them.
• Energy companies contribute strongly to community organizations and events and are actively involved in volunteerism.
• Industry officials are well organized in marketing and promotion, ie. National Oil Week celebrations, Industry day etc.

Overcoming Obstacles

Lessons learned in this process are identified below and include some aspects that may be unique to the energy sector.

• Time is as important as money to energy companies. A meeting requiring daytime activity represents a drop in production. Meetings with this sector require timing considerations, i.e. over dinner, over coffee, at their site, of a short duration, one-on-one as opposed to group settings.
• With high activity in the energy sector, consideration must be given to the Business Network Advisor being ultimately responsible for all activity and coordination. Limited availability of energy sector personnel requires specific handling.
• Decision making participation rather than developing initiatives is of inherent interest to the energy sector. Present findings, if we agree, we will participate.
• There must be economic, public image or community contribution benefits to the energy sector.
• Limited funding to support initiatives is available should benefits be realizable.

 

TOURISM

Network Analysis

Working with the list of all ten flagship initiatives developed by the Leadership Team, we identified the importance of creating mediums that would serve to connect both visitors and communities with key destinations across the area.

Beginning with the Quick Links and Regional Map projects, we concluded that adding tourism packages would be a natural extension. While packaging fits the initial projects, we did have to acknowledge that at present, there are actually few packages in the region.

While this presented the group with an inventory challenge, we also knew there were a great many single experiences that could and would evolve into packages, hence the plan to create a list of experiences and give visitors a “great excuse” to visit.

The plan adopted has become a package of “100 Great Experiences ” that are available to visitors and residents across the region. The experiences are intended to serve the visitor, but they also provide every business and community the opportunity to participate.

The underlying purpose of the project is build a network of tourism packages to cross promote the region, providing visitors with a wide range of experiences that can only be found by exploring the Great Southwest.

Network Implementation

Work has started on identifying a list of 100 Great Experiences that are available across the region. All members of the Leadership Team have agreed to submit a minimum of 10 experiences from their local area.

The committee of the Leadership Team has committed itself to compiling the list from across the region into a workable document that can be printed, distributed and promoted on-line across the region.

Tourism Swift Current has also committed its support to the project and will work to obtain additional marketing, print and web support from local businesses, supporting media and related tourism organizations.

In support of the first phase of “100 Great Experiences,” Sask Landing Golf Resort, Comfort Inn in Swift Current and Tourism Swift Current have committed to building and marketing a “Play and Stay” golf package.

This is the first step of the network process and as the list of 100 Great Experiences evolves, a package criteria will be established that is based on successful packaging programs across the country.

Successful models are available from organizations that include Saskatchewan Country Vacations Association, Sask Tourism, Alberta Agriculture Food and Rural Development, and Rendevous Canada.

BUSINESS PLAN

Mission and Objectives:

Work together as network partners to assist and attract outside visitors to communities throughout the region and support the business of tourism across the Southwest.

Structure:

Sask Landing Golf Resort, Comfort Inn in Swift Current and Tourism Swift Current have committed to work as partners building and marketing a “Play and Stay” golf package.

Key Tasks:

All partners will contribute equally to the building, development, and marketing of “100 Great Experiences,” a package of tourism experiences made available to visitors, and supported by network partners, businesses and organizations throughout the region.

Initial Team Members:

Ken Skibsted, Director of Golf Operations, Sask Landing Golf Resort
Duane Kurbis, General Manager, Comfort Inn of Swift Current
Karen Bonesky, Chairperson, Tourism Swift Current.

Resource Requirements:

The play and stay golf package offers visitors a planned day trip within the region and will include golf, meals, and accommodations. The partners have agreed to provide marketing support, staff training and user availability to ensure the experience and expectations of the visitor are achieved with each booked package.

Budget:

The network participants will provide initial funds and marketing support to launch the first phase of a three phase network. The second phase will require initial print and marketing support. The third phase of “100 Great Experiences” will require additional marketing, print and web development. Support for the full regional package will be sought from participating businesses, organizations and communities across the area. Total project costs for all three phases is estimated to be $50,000.00.

Timing:

There are three time lines to this project. The first phase begins with the single play and stay golf package. The timeline is 30 days. The second phase is the creation of 100 Great Experiences. The time line is 90 days. The third phase is the creation of 15-20 packages which combine elements of the 100 Great Experiences. The timeline for this is 1 year.

Lessons in Working Collaboratively

• As a company, this project was a great learning experience and as rewarding as it has been to be a part of, it has also been some of the most challenging work we have had the opportunity to participate in.
• As a region, we are very fortunate to have people working in tourism who possess not only passion, but also drive, ambition and vision. These are the people who have both led and contributed to the project and they must be given full credit.
• While participation was high at the initial informational sessions and roundtable meetings, there was, from the very beginning, an expectation of results.
• The members of the Leadership Team made it clear from the start that they would agree to support the project, but only if it was accompanied by action.
• A comment out of one of the first meetings is that people have talked before, but nothing happened. It was hoped and expected this time it would be different.
• Worth noting and seen as a positive is all members of the Leadership Team have agreed to continue working and meeting as a group.

Overcoming Obstacles

• When it comes to volunteering, Saskatchewan leads the country. Participation is 42% in the province. As much as prairie people are noted for their generosity and are proud to serve as volunteers, there is a limit of what can and should be asked. One of the facts behind this percentage is that if people chose not to volunteer, a number of projects, including this one, would not have happened, and in other areas, some services would cease to exist.
• Tourism was fortunate to have a high level of participation. The timing of the project was very good as winter is off-season for a majority of the participants of the Leadership Team. This project, however, could not have been attempted during summer months. Regardless of the season, one must always keep in mind that a majority of businesses in tourism are small to medium enterprises and time away for any meeting, is also time away from business.
• Given the vastness of the region, traveling to meetings is a constant issue for those who live in the region along with the reality of winter storms. To attempt to limit the traveling time required, and be fair to the participants, all meetings were held across the region and at the location chosen by the individual members of the Leadership Team.
• At the end of the day, there is only one dollar and only one taxpayer. Having said that, budgets for future projects need to take into account the time and distance that volunteers are asked to contribute. It would be recommended that future budgets allocate dollars for travel and per diem.

 

AGRIBUSINESS

Network Analysis

From the list of flagship initiatives developed by the Agribusiness Leadership Team we identified the importance of the development of supply networks as one essential part of the equation for the development of value-added agriculture in the region.

For example, if a feedlot is to be successful there must be a network that supplies the cattle to be fed and a network that supplies the feed grains and forage required by the feedlot. If a packing plant is to be successful there must be a constant supply network of cattle to be processed in the plant. If an ethanol plant is to be successful it requires a supply network of grain to be processed. If a pulse processing plant is to be successful it requires a supply of pulse crops to process. If a bio-diesel plant is to be successful it requires a supply of oilseed.

Supply networks already exist to some extent with farmers who purchase seed and inputs from a grain company with terms to market the crop back to the company. Another existing supply network is an intensive hog operation with supply contracts to a packing plant.

Ethanol, feedlot and packing plant initiatives are in the developmental phase in the region. By developing supply networks that align with these value-added projects we can build capacity here in preparation for the completed projects.

Network Implementation

• We selected developing value-added agriculture in the region as a priority initiative.
• We examined value-added initiatives in the developmental phase throughout the region identifying the ethanol project at Shaunavon, three feedlot projects including the Pine Cree feedlot project and identified potential for five additional feedlots throughout the region to meet the capacity of the packing plant to be located near Swift Current.
• We examined existing resources and how they are used now. The cows producing calves each year in the region have the potential to become the supply network for local feedlots rather than shipping the calves to Alberta. In this way we add value in the region while creating local demand for feed grain resulting in reduced transportation costs for farmers and creating local jobs.
• We examined the impact of jobs created across the region through these initiatives and the supply network development.
• We identified leadership team members that are connected to the initiatives.
• We invited their commitment through letters of intent.

BUSINESS PLAN

Support existing projects through working in partnership creating supply networks where feasible and encourage supply networks in new value-added ventures by seeking funding to provide human resources for projects developing supply networks. Engage a regional value chain facilitator.

Mission:

Working in partnership with existing projects and supporting new value-added initiatives through the development of supply networks

Objectives:

• To research existing projects and their supply networks.
• To work in partnership with projects to identify potential supply networks.
• To market the concept and regional value of supply networks (jobs created, etc).
• To assist in the development of supply networks.
• To apply lessons learned to new initiatives.

Structure:

• Initially the people and firms involved will be the feedlot, ethanol and packing plant representatives on the leadership team.
• This will expand to include farmers and ranchers who are investors in value-added initiatives as previously listed.
• Potential support organizations would include the Business Development Specialist Saskatchewan Agriculture, Food and Rural Revitalization (SAFRR), Livestock Loan Guarantee Program representative SAFRR, Southwest Centre for Entrepreneurial Development, Cypress Hills Regional Economic Development Authority, and Saskatchewan Rural Development. Service providers could include representation from the financial community.
• A cooperation agreement will be explored by the team then developed with all parties having input into development of the agreement.
• The structure would include a paid project consultant or value chain facilitator for a minimum of 2 years.

Key Tasks:

• To research existing projects and their supply networks.
• To work in partnership with projects to identify potential supply networks.
• To market the concept and regional value of supply networks (jobs created, etc).
• To assist in the development of supply networks.
• To apply lessons learned to new initiatives.

Initial Team Members:

Jim Parsons, Reeve R.M. of Swift Current, Chair of Southwest Beef Initiative
Terry Winter, Councillor R.M. of Gull Lake
Karen Bonesky, Southwest Centre for Entrepreneurial Development
Doug Steele, Saskatchewan Association of Rural Municipalities
Bill Caton, rancher, Maple Creek

Resource Requirements:

• Human resources to provide network co-ordination and leadership.
• Financial resources to contract value chain facilitator.
• Financial or in-kind resources for travel, meetings and meals.

Budget:

To be determined by network team. Estimated at $50,000.00 to $60,000.00 per year.

Timing:

Time line for this network project is 2 years.

Expected Results:

• Benefits to the members of the supply networks will be increased opportunities to add value to agriculture in the region increase profits for farmers, ranchers.
• Supply risks will be mitigated for new value-added agricultural projects in the region.
• Construction jobs will be created in the development of new initiatives throughout the region.
• New on-going jobs will be created in the packing plant, feedlots, ethanol plant in communities throughout the region.
• We will add value to agriculture here as an alternative to shipping the cattle, barley and kids to Alberta.

Short term:

Collaborating with existing projects, engaging farmers and ranchers in supply network development and protocols required for success.

Long term:

Regional value chains supporting value-added projects in the region. Increase in regional economic growth, additional jobs, more value-added agriculture in the region.

Lessons in Working Collaboratively

• We have a wealth of knowledgeable, committed, creative, hardworking people in the region.
• Response was supportive and positive throughout the region.
• Volunteers in rural communities already have huge commitments to families, jobs, and volunteer organizations.
• Young farmers/ranchers who also work at off farm jobs and have families were unable to commit to meetings yet were very supportive of the project.
• Participants want to see action—this cannot end in a report on the shelf in an office.
• Recognize and compensate volunteers for their contribution to regional economic development.
• Engage the expertise of “think tank volunteers” with minimal time commitment.
• Project time frame was too short; recommend 12 months for similar projects in the future.
• Travel time required and winter weather impacts attendance at regional meetings. For example most participants traveled two hours or more to attend meetings.

Overcoming Obstacles

• Timing of the project was a challenge for the agribusiness sector. December, January and February are months when the agriculture sector is attending conferences and seminars, completing year end transactions, preparing for and beginning calving season, etc.
• Volunteers are tapped out. As rural communities continue to decline there is more responsibility for continued services in the community placed on a smaller number of volunteers. Use telephone and email to make it easy for participants to be connected.
• Understand the impact of travel time in addition to meeting time.
• Continued support for the project is essential for its success.

 

Implementing the Flagships

The Action Southwest Business Networks Coalition has reached a critical juncture. Over 30 flagship initiatives have been identified by our regions key industries as recommended strategies to help strengthen these individual sectors and our economy as a whole. Our ability to sustain a commitment to these initiatives and this process will be a reflection of the improvement in our regional collaborative culture that this strategy process has achieved.

Participating in the ASBNC strategy has been an important experience for the private and public sector alike. All participants committed substantial amounts of their time to the collaborative strategy process and want to ensure that their efforts are taken forward. To ensure the continued success of the ASBNC initiative, the Lead Steering Committee is dedicated to sustaining and maintaining the ASBNC’s collaborative activities. However, no regional growth strategy can succeed that does not have regional leadership groups committed to moving actions forward and as a result a number of regional leaders have committed to continuing and building the ASBNC initiative as the vehicle for maintaining this strategy’s forward progress.

As Before, the ASBNC will provide logistical support to convene regional leadership for the purpose of flagship development and implementation. A flagship will not be acted on unless at least three regional leaders are willing to take responsibility to take action towards implementing it. These individuals with the assistance of the ASBNC will begin the formation of industry network teams that will be represented by industry and support organizations. Flagships are intended to create a distinctive economic advantage across the region and for this reason, each flagship will require a more deliberate process to build on their framework through the development of collaborative business plans that will lead to actual implementation.

Throughout this process the ASBNC will continue to report back to the region on the progress of our industries action plans. This approach will ensure that all businesses and communities in the region can benefit from knowing that we are working together towards a sustainable and prosperous economy in the Southwest.

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