April 2, 2016
The technology advantage
Well-managed companies create competitive advantages by embracing innovations ranging from mobile communications, to social networks, cloud computing and big data.
One of the benefits stemming from Brigitte Vachon’s work on the Canada’s Best Managed companies’ initiative, is the bird’s eye view it provides her of best entrepreneurship practices. “The winners are almost always at the forefront of innovation,” notes Vachon, a partner at Deloitte Canada and a group leader on the program. “That’s particularly true on the technology front.”
Vachon isn’t kidding. In the current economic environment, in which the cost of communications and of acquiring information can be near zero, getting a competitive edge is increasingly possible in a growing number of industries. Keeping it is another matter. “Innovators are constantly reinventing themselves and recreating systems and processes,” says Vachon. “That means identifying value and investing to develop it.”
Novatech: all businesses are affected by technology
Major IT trends such as mobile communications, social networks, cloud computing and big data analytics affect almost all industries. However Vachon also stresses technology’s crucial importance, even to companies which are not direct IT players. Once example is Novatech Group, which manufactures doors, a product that mankind has been producing for millennia. Despite this, the company must nevertheless constantly innovate to stay ahead.
“The steel, patio and entry doors we make today meet customers’ needs better than even before,” says Harold Savard, Novatech’s president. “They are more durable, energy efficient, attractive and economical. Much of this relates to our increasing leverage of technological advances throughout the product development, manufacturing and marketing processes.”
Novatech, which exports to the United States and Europe, thus invests considerable resources into its Internet site, which is scheduled to be fully upgraded later this year. One of the site’s most popular innovations is a tool that enables buyers to design their own doors, which they can then custom order from a local distributor. By scanning a photo of their houses and inputting them into the system, potential buyers can even see in advance what the product will look like once it is installed.
Robotics in the factory, ERP in the back office
Best managed companies also constantly update production processes to increase efficiency. For example Novatech invests between $2 million and $3 million each year in cutting, assembly, glass transformation and other equipment. In recent years, the company has also increasingly implemented robotics throughout the production process. “We are always looking for the next new thing,” says Savard. “Customer demands are very high.”
Backing up the entire process is Novatech’s state-of-the-art Oracle enterprise resource planning software, which the company is in the process of updating. “It does everything,” says Savard. “We use it for forecasting our coming year’s output, planning production, purchasing, inventory control, operations, shipping and reporting. We don’t have a choice. If we want to allocate resources effectively we need good systems and controls.”
Novatech also uses the latest SolidWorks computer-aided design software in its product development process. Savard’s realization of the increasing value of creativity in the company’s operations, led him to set up an innovation center, where marketing and engineering personnel work together to develop new product ideas. The SolidWorks software enables Novatech designers to create detailed parts, assemblies and production drawings, which incorporate complex surfaces, sheet metal patterns and structural welded assemblies. Users can automate designs, perform stress tests and determine the environmental impact of each component.
Innovating through research and development
Novatech has introduced several design innovations over the years says Savard. These include a maintenance-free door frame, a patio door with internal mini-blinds and an ergonomic venting unit that can be opened using just one finger. “Producing tooling needed to start a new embossed steel door product line involves huge fixed costs,” says Savard. “The CAD software designs, which are extremely precise and lifelike, give us a much better idea of whether the final product will be a success, before we spend the money needed to put it into production.”
Another important investment that Novatech makes is in getting independent validation of its quality standards. This provides international buyers confidence that their new supplier can be relied upon. For example Novatech received its ISO 9002 validation almost two decades ago and recently picked up its ISO 9001:2000 certification.
Another common trait shared by Canada’s Best Managed companies relates to the proportion of resources they allocate to research and development. Savard of Deloitte, cites Jefo, a St-Hyacinthe-based producer of enzymes, acidifiers, essential oils and other food additives for farm animals, as an example.
Jefo has developed a “species specific approach,” to helping its clients, who are mostly farmers, to improve livestock production. The methodology takes into account the fact that animals have differing nutrition requirements. “They set up close to a half-dozen research stations located around the world, staffed by nearly 20 engineers and scientists,” says Vachon. “That’s a lot for a company with just 200 or so employees.”
According to Jean Fontaine, Jefo’s president, the company also operates an international animal nutrition research center, which it makes available to universities, technical schools and other private and public research partners. The facility includes a poultry research farm and a pig facility that includes dozens of pens and several hundred animals.
Businesses increasingly seek technology advice
Not surprisingly technology innovation is a growing part of Deloitte’s business as well, says Vachon. “Audit clients are increasingly asking us for advice as to how they can better leverage their own internal systems and processes,” says the veteran accountant, who over the years has done work in industries ranging from media, to retail, cosmetics and food. “To help provide that, we set up an innovation center where Deloitte employees brainstorm new ideas that they can later put into practice.”
Vachon refuses to publicly draw on her insights to speculate about what kinds of businesses are likely to emerge as Canada’s Best Managed during coming years. All she would say is that future winners will likely be those which best embrace technology.
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