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Collaborative projects: Big companies learning from small companies

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WMCO by Mike Baker
Mike Baker is the Chief Executive Officer of the Wood Manufacturing Cluster of Ontario. He can be reached at: mbaker@wmco.ca
Collaboration between SMEs is the winning ingredient for industries to be globally competitive. This has been measured and proven time and again by the EU Economic Development Commission: see my previous column Industry cluster countries lead the pack on GDP | Woodworking Canada
On Wednesday, April 12, the 10 WMCO member company participants in the WMCO Project: Optimization of Information and Material flow Opportunities in the Ontario Value-Added Wood Manufacturing Cluster: Industry 4.0, met at Archmill House for the end of project status review along with NRCan reps from Ottawa.
The WMCO member companies participating in this project each had individual projects to attack the gaps in digital integration to achieve Industry 4.0. Each company had an opportunity to share its experiences, citing obstacles and hurdles as well as successes. These evolved into a dynamic round table discussion that saw both large and smaller companies share their successes and challenges.
Examples of projects included CAD integration to ERP, ERP integration to shop floor, scaled integrated ERP-like solutions to diverse factories, parts tracking implementation, and product site installation integration. Elimination of paper processes and the reduction of data entry were all common goals; each scaled uniquely across different business models. Take-aways included the paradox of mass customization and lessons learned actually from the smaller shops that benefitted the bigger ones. This was an event of true collaboration at its best.

Big companies learning from 
small companies
Arch mill and Cabico - both larger companies with $50million - $100 million in sales - were both deeply impressed by Mike Clare of Diamond CNC who was able to achieve $500k income per employee (income per employee is a common benchmark) in a smaller shop, with increased throughput, due to the capabilities enhanced by the digital integration project. Nobody else came close to that number.
Other smaller companies also had solutions and approaches that were valuable to the larger companies; while at the same time, the larger companies also shared their unique approaches to closing their integration gaps to achieving Industry 4.0.
As a result of this project, digital road maps are now being developed for each segment of wood manufacturing: cabinetry, millwork, and furniture. Also, a summary of common approaches that apply to other niche wood manufacturers will be highlighted for those manufacturing components. These roadmaps will be released and shared later this spring, so that manufacturers like you will get a good idea of where to start and how to achieve your own Industry 4.0 integration for your factory that is scaled and makes sense. By getting all of our companies doing this, we gradually raise the capabilities of our industry on a global level. We become globally competitive, World Class.
A cluster’s job is to identify the collective needs of its members and execute activities to meet those needs, while where appropriate, engaging government partners to support the specific activities on a project basis. In the EU, industry clusters act as the go-between with government and industry to administer programs to support the companies on a journey to World Class. WMCO long ago identified the move to Industry 4.0 as an important trend small and medium sized manufacturers (SMEs) need to address to become globally competitive.
Three years ago, WMCO went to Ottawa to meet with representatives with Natural Resources Canada (NRCan) Investments in Forest Industry Transformation (IFIT) program. Typically, this program catered to large companies with multi-million-dollar projects in mainly the primary wood sector. Due to the complexity of the program applications, small and medium sized manufacturers (SMEs)  didn’t have the resources to apply for it, or have the spending capacity for such huge projects. The program was designed to work with one company at a time.
WMCO made the case that the IFIT program should be helping SMEs in the secondary manufacturing industry. By working with the cluster, they could support multiple companies at once with one main project. Cluster members can collaborate on the project and share their best practices and ideas. IFIT became interested in working with us and at that time a call went out to members interested in data integration projects. There were delays caused by the pandemic, but finally, while our big proposal was asked to be scaled back to a study, we were successful in securing a pilot project with 10 SME member companies representing three industry segments: Cabinetry, furniture, and commercial millwork. The project started in September 2021.
Administered and managed by WMCO, the scope of the project was to identify Industry 4.0 integration road maps for each of the manufacturing segments. Participating companies identified gaps in their data integration and created projects to close those gaps. Metrics were tracked by all of the participating companies and submitted to be aggregated metrics for the group, tracking the impact of the project. Members submitted their expense claims and brief progress reports on a quarterly basis. WMCO gathered all of the claims and created one large claim to submit to IFIT every quarter. Upon claim approval, the funding is sent to WMCO and we distributed it to each participating member as per their claim. This way, companies deal with the WMCO cluster and not directly with the government, and they don’t need to create huge laborious project applications.
By clustering a collective of companies together for a mutually benefitting project, government partners helped multiple companies at once through the cluster. SMEs can get access to funding programs they would not otherwise have access to on their own. SMEs can share best practices and ideas and leverage the knowledge of the group to help the implementation and sustainability of their projects.
The Investments in Forest Industry Transformation (IFIT) program facilitates the adoption of transformative technologies and products by bridging the gap between development and commercialization. The IFIT program aims to create a more competitive and resilient forest sector with a focus on low-carbon projects that result in new or diversified revenue streams.
WMCO continues to work with government partners to execute collaborative projects whereby government programs can be administered to multiple wood manufacturing companies at once through the WMCO cluster model. This is how programs flow to our competitors in the EU. We are starting to catch up here in Canada.
To get involved with the only wood industry cluster in Canada, contact me directly at mbaker@wmco.ca or go to www.wmco.ca

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