Innovation in the Business of Manufacturing

Introduction

Asking Ontario’s manufacturing business owners about their most demanding challenges this year, one theme came up again and again: disruption and chaos. But alongside these challenges, leaders are showing remarkable creativity and resilience in finding solutions.

To get a sense of the state of Ontario’s manufacturing sector, MNP invited owners and management teams from companies across southern Ontario to two roundtable discussions — one in Burlington and one in Mississauga. The goal? To hear directly from those on the front lines about the challenges they’re facing and the ways they’re overcoming them.

The conversations were revealing. Five key challenges emerged, shared by many of the manufacturers who participated. But just as striking were the resourceful strategies these leaders are using to tackle those challenges head-on.

Innovation is often said to be in short supply in Canada, but our roundtables told a different story. We saw leaders eager to explore new approaches and inventive ideas.

Inside this white paper, you’ll find the big issues and the enterprising remedies these ambitious entrepreneurs are using to succeed in today’s chaotic, competitive marketplace.

Roundtable participants

• Curtainsider Inc. — Jim Kranendonk, President
• Maneva AI — Kevin Sun, COO
• Swenco Limited — Chris Sweeny, Vice President
• Swenco Limited — Florind Molabecirovic, Logistics Coordinator
• D&R Custom Steel Inc. — Dan Engelage, President
• MTD Metro Tool & Die Limited — Marcel Pantano, CEO
• Amir Quality Meats Inc. — Tony Aziz, CEO
• Paris Kitchens — Carolyn Iyer, former COO
• Steelcon Group of Companies — Nafisa Madhani, Director of People, Culture & Safety

MNP hosts/facilitators

• Hussam Malek, Partner, National Value Creation Leader
• Pamela Lilley, Partner, Regional Manufacturing Lead, South Central Ontario
• Mary Larson, Partner, National Lead for the Strategy Consulting Practice
• Jason Lee, Partner, Digital Services
• Hali Van Vliet, Partner, Consulting, Human Resource Management
• Ryan Magee, Partner, Regional Manufacturing Lead, Toronto

Overview of our manufacturing industry and key trends

MNP provides an overview of 2024 economic indicators that are especially relevant to the manufacturing industry.

• The Bank of Canada forecasts 2024 GDP growth to be 1.5 percent and about 2 percent in 2025 and 2026.
• Inflation is easing across the country as monetary policy has helped to slow growth and reduce excess demand pressures. Inflation is expected to ease below 2.5 percent in the second half of 2024 and down to 2 percent in 2025.
• As of June 2024, the S&P Global Canada Purchasing Manager’s Index (PMI), reflecting the prevailing direction of economic trends in the manufacturing and service sectors, was unchanged at 49.3. This indicates a continuing downturn in manufacturing for 14 consecutive months. A PMI above 50 indicates expansion.
• The Canada Manufacturing New Orders Index indicates the number of new orders from customers of manufacturing companies [1]. In May 2024, it was 72.24 billion, up from 71.51 billion the previous month and up from 71.6 billion one year ago. This is a monthly change of 1.01 percent and an annual change of 0.76 percent.
• Canadian manufacturing sales rose 0.4 percent to $71.4 billion in May 2024, driven mainly by higher production in the aerospace product and parts industry group (+11.2%), followed by higher sales in the food (+1.4%) and paper (+5.5%) product subsectors.

Manufacturing in Ontario: The engine of the economy

• 37,550 companies
• 787,100 jobs
• 11 percent of the provincial GDP
• 80 percent of merchandise exports
• 26 percent of total employment (including direct, indirect, and induced impact)
• Almost 45 percent of Canada’s manufacturing output

(Manufacturing Ontario’s Future, Canadian Manufacturers and Exporters)

Given the implications of current economic indicators and industry trends on business strategy, this white paper delves into what  southern Ontario business owners and leaders in various manufacturing sub-sectors have to say about the challenges they’re facing — and how they’re dealing with them.