Sept/Oct 2010

Supply Side

Taking on the productivity challenge: A Canadian mining supplier leads by example

By Jon Baird

To succeed in this globalizing, competitive world, Canadian mining suppliers have to be highly price-competitive and provide excellent customer service, which includes delivering the highest quality products on time. And yet, Canadian productivity has inched ahead by only 0.7 per cent a year over the past decade. In 2008, it actually shrank by 0.6 per cent, according to the OECD, which ranks our country’s performance behind such economic basket cases as Greece and Spain. That same year, the United States, Canada’s biggest trading partner, boosted its productivity by 1.3 per cent, widening an already large gap. However, CAMESE member Wabi Iron & Steel Corp. of New Liskeard, Ontario, is doing something to ensure that they are chosen over their competitors from countries with low-cost labour.

Founded in 1907, Wabi currently employs about 120 workers. Focusing mainly on the mining industry, they custom design, engineer and fabricate conveyances and material handling systems, as well as produce a wide variety of cast wear products in more than 100 alloys in their iron and steel foundry.

Last year, Wabi undertook a $450,000 productivity improvement project with the help of a $50,000 grant from the Canadian Manufacturers & Exporters’ (CME) SMART program. The goal of their project was to “improve processes, management systems and management skills to create a continuous improvement culture.” The work involved extensive management training and in-depth analysis of processes and systems to eliminate waste and improve on-time delivery.

One of the rewards of Wabi’s progress was to be featured in an extensive front-page article in the June 29, 2010 issue of the Globe and Mail’s Report on Business. Including many photos, the article occupies the equivalent of two full pages of the newspaper and showcases “Wabi’s daily fight for higher productivity, which is being duplicated at many Canadian companies. The outcome of their struggles will determine how Canada fares in the global market against growing competition from low-wage countries such as Mexico, China and India.”

The Globe suggests that if Bank of Canada governor Mark Carney wants an example of Canadian companies that are addressing the problem head on, he should visit Wabi, where president Peter Birnie and his team have discovered that improving productivity can be deceptively simple, even for smaller companies without access to huge amounts of capital. An example of a simple improvement was the installation of a new entrance so that incoming supplies and finished products were not moving through the same door. This change has improved manufacturing efficiency by creating linear material flow directions in the shop.

Wabi has used the 5S strategy of LEAN Manufacturing systems to organize its manufacturing departments. Tooling has been centralized to work areas thereby limiting workplace “traffic.” Also, workers are now able to use three-dimensional imaging technology on the shop floor to better interpret work instructions. Employee movement is now more focused on adding value to the manufacturing process.

Proof of the project’s success was that sales grew without the need to increase the workforce. Revenue from the mechanical business has tripled since the productivity project began. Total revenues in 2009 were about $18 million and the company targets more than doubling this over the next five to six years. Wabi’s key to success is productivity improvements combined with a focus on world-class customer service, innovation and the passion to win.

This example is one that should be heeded by other Canadian mining suppliers.

Jon Baird
Jon Baird, managing director of CAMESE and the immediate past president of PDAC, is interested in collective approaches to enhancing the Canadian brand in the world of mining.

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