The manufacturing industry is the lifeblood of Alberta, and Canada as a whole. The COVID-19 pandemic era has resulted in multiple upsets within the manufacturing industry, from labour shortages and supply chain issues, to general supply chain logistics troubles. However, manufacturers are resilient, able to rise to the challenge and adjust as they need to in order to survive, recover and thrive in the future.
In order to gain insight on the struggles of manufacturers in Edmonton and their recovery efforts from the pandemic, we spoke with Chris Carr, Owner and Director of Edmonton operated Steeltex, about how his company fared.
“Numbers throughout the entire manufacturing sector are down due to COVID, but Steeltex Mfg. has managed to survive. We have a great team of people at Steeltex and our main focus has been to avoid any layoffs or wage rollbacks,” says Carr.
He elaborates, “Profit margins were already thin in a highly competitive market and those margins had to shrink even more in order to win bids and keep employees occupied on a day-to-day basis. We’ve taken advantage of government programs (CERS, CEWS), shortened working hours each week, and allowed more time off when requested. In order to keep our work force occupied, time was spent enhancing our safety program, taking care of maintenance projects, and streamlining our manufacturing thorough shop cleaning and clearing of any unnecessary equipment or items. This was also done in order to prepare for an expected surge in projects, which we have seen in the past few months.”
Manufacturers had to deal with extra mandates and requirements that continually evolved throughout the pandemic, but Steeltex already had the infrastructure in place to handle the changes easily, Carr says. “There was little change required. Our office space is already laid out in such a way that distancing wasn’t an issue and the supply chain in place required ordering via phone or email. Deliveries required the drivers to follow COVID restrictions at that time, and our employees to do the same.”
Steeltex also had to look at their manufacturing process and seek innovations in order to bring in more projects to keep up the workflow through the pandemic and avoid layoffs. Carr explains how they were able to boost their usefulness for current clients, bring in new clients, and even find a use for previously waste materials.
“In order to bring in additional projects, we had to look at our current client list and put together a list of new services or products that we could offer to them, and to clients that we had not approached in the past. With tight budgets and spending at a minimum, this meant we had to look at the equipment we had on hand and determine how it could be used to manufacture products for within and without the heavy industrial sector. We identified items we could make that would appeal on more of a commercial level, utilizing leftover materials from past projects. This was quite successful, and our previously growing piles of crop material are now being put to use as manufactured products.”
While Steeltex was able to avoid labour losses during the pandemic, not every company was able to do the same, and the issue of labour shortages are only going to get worse as the economy recovers. At Canadian Manufacturers & Exporters, an organization that helps advocate for and represent Canadian-based manufacturers and exporters, David MacLean, Vice President, Alberta and Saskatchewan, had this to say in a recent column. “While labour and skills shortages may not be a major issue now, they are expected to intensify in the coming years as the economy rebounds and as large numbers of Baby Boomers exit the workforce. And, although businesses have some ability to mitigate labour and skills shortages, there is only so much they can do. Instead, the nature of this problem requires governments to take the lead on this economy-wide issue. When asked what policymakers should do to address this looming challenge, respondents said they are looking for governments to offer stronger incentives for companies to invest in automation, find better ways to attract people to smaller communities, provide tax incentives to hire new workers, offer financial support to help cover worker training expenses and help to promote manufacturing jobs to youth.”
Continuing, MacLean notes, “A skilled and diverse workforce is essential for future manufacturing growth. Manufacturers need to up their game when it comes to recruitment and training – including attracting workers from non-traditional areas. Governments also play a role and can help with some creative policies including introducing a worker training tax credit and tweaking post secondary education to expose more young people to manufacturing careers.”
As the pandemic is nearing its end, the manufacturing industry is looking forward to the future, and adjusting strategies to ensure future stability, whether they be further government investment in the industry, or promoting more localized supply chains.
MacLean delves into the challenges, saying, “The Alberta government is building a manufacturing strategy. In the 2021 budget, the Alberta government committed to developing a sector strategy for manufacturing – something we at Canadian Manufacturers & Exporters have been seeking for years. An Alberta manufacturing strategy must look at ways to de-risk investment in equipment and technology and diversifying markets. We’ll be making some suggestions.
“Global supply chains are still wobbly. Container shortages and rising shipping costs hit manufacturers hard. Shortages of microchips, semiconductors and a range of other key products have even forced some manufacturers to temporarily shut down. How soon can we expect a return to normal for our once-reliable supply chains? Again, this unique phenomenon underlines the importance of local supply chains. Perhaps the pandemic brings lasting change.”
Climate change targets are another topic on the minds of many manufacturers right now. MacLean has stated, “The titans of Canadian industry and are responding to demands from policy makers (including the Alberta Government), shareholders, employees and the communities in which they operate. Inevitably, they will turn to their suppliers for similar actions and that’s why small and medium-sized companies need to follow closely.”
MacLean describes net zero, “For the overall sector, net zero does not mean the full elimination of all emissions. The goal is to, through a wide range of actions, both reduce and offset the GHG emissions of the sector through measures such as tree planting or employing technologies that can capture carbon before it is released into the air. Manufacturers have been moving in the right direction for decades. The sector’s emissions intensity, defined as the volume of emissions per unit of real GDP, has also been improving, especially over the last 10 years, declining at an average annual rate of 2.1 per cent between 2009 to 2019. Both these trends will need to continue if we are going to hit our targets.”
Manufacturing in Canada has always been a robust, agile, and capable industry able to handle any situation. While the pandemic has highlighted some of the weaknesses in supply chains and processes, manufacturers have stepped up to the challenge, and will come out of the pandemic with strong strategies that should see the industry thrive once again and become more resilient than ever.