OCM Manufacturing's George Henning, with the company's new inspection machine. (Darren Brown, OBJ)

When Statistics Canada reported on the problem of fewer and fewer workers in the labour force, economists indicated that increased productivity through investment in technology would be the solution, especially in labour-intensive industries like manufacturing. Although employee retention and delayed retirement programs are a good strategy for the short term, these will only make a slight dent in the overall problem of a smaller working-age population.

One business that is taking that advice to heart is Ottawa-based OCM Manufacturing, which has made a significant investment in an automated inspecting machine. Although the media often report on how the manufacturing sector is seeing a move to cheaper markets overseas, that doesn't mean skilled manufacturing labour is in large supply. In fact, explained OCM president George Henning, it's difficult in this climate to find educated assembly-line workers.

OBJ: I hear that you have some new technology in place at your plant. Tell me about that.

HENNING: We do. We went out and acquired an automated optical inspection machine. Mirtech is the manufacturer of the equipment. This machine is intended to replace in part the manual visual inspection that we do of the products that we produce here at OCM.

We are a small- to mid-sized electronics manufacturing company and we do contract manufacturing for OEMs (original electronic manufacturers) for an electronic component in their product. The emphasis is low volume and high mix ... smaller volume products with higher complexity. In today's manufacturing environment you need to be a niche player and certainly we can't compete with China.

We are a batch-flow operation, so in the past we would have people collect the products that need to be inspected and sit down with a microscope and drawings and verify that the workmanship is as it should be and that the product is properly assembled. They would look for a variety of defects.

Now, the machine does a good portion of this work. It has a good camera system that needs to be programmed. It then uses the camera system to image the components on the product and then verifies that they are properly installed.

OBJ: Was this a significant investment for your company?

HENNING: I think we're going to get payback in about a year. That's better than we thought. It wasn't an insignificant investment, we're talking six figures. And there is some learning curve associated with it. There was also some uncertainty about bringing the equipment in, regarding what kind of returns it would bring. But we do see that the automated inspection is about five times the speed of manual inspection.

It brings some other benefits as well. It's repeatable and it doesn't have a bad day after a late night. It doesn't miss things and it does things the same way every time. Its mind doesn't wander and it doesn't get distracted by people walking by.

Today's electronics are shrinking and their complexities are growing. After a few hours, it's just impossible to keep your mind on it, so the machine doesn't have that problem.

It does take some engineering effort to program, and it has to be programmed for every product. But once this is done, we quickly get that time back in production productivity.

OBJ: Even though we hear in Canada about manufacturing jobs going overseas, would you say that there is still a labour shortage for skilled workers in your sector?

HENNING: We have had a bit of a hard time just recently trying to find skilled people in our production jobs. We need to automate to become more cost competitive and certainly competing with international manufacturers mandates this and also competing within Canada is a part of that. That means working smarter, not harder. We have fewer jobs but perhaps they are more technical. We do have problems from time to time finding and retaining these people.

We're not hiring a lot of professionals, just good, skilled assembly-line workers with sound computer skills and literacy. It can be a challenge with the work we have today. There is an amount of computer work, so we need someone who can operate a PC and someone with experience in electronic manufacturing. It's very hard to come by these days.

OBJ: Why is it so hard to find people that fit that profile these days?

HENNING: It's a mystery to me. Perhaps people have left the industry with all the talk of China decimating things. Either that, or things are picking up in the industry.

(To find people) we usually use the Citizen classified ads and their associated website for open positions. We also employ co-op programs from Algonquin, and this sometimes helps us fill permanent positions once the students graduate.

OBJ: Statistics Canada recently pointed out that technology was going to be a way for Canadian companies to keep their productivity high as more and more people retire. Do you see that working for you?

HENNING: Oh yes, that certainly rings true for us. We try to do that whenever we can, to just operate in the most efficient manner possible. I think we do a pretty good job, we use new technologies like barcodes and that kind of thing as soon as we can, if it's a good fit for us.

THE EXPERTS SAY

In the past five years or so, we have seen an aging of the population in Canada, but we haven't felt it because workers are staying on the job longer and this is offsetting the effects of our shrinking workforce. But this is just the tip of the iceberg.

Going forward, one of the implications for the Canadian economy is that we will either see economic growth slow down because we don't have enough workers or we will have to increase our labour productivity. The way to offset that is to increase the productivity of each worker. I think, in the long run, companies should be focused on increasing productivity.

One way to do that is to look into investment in both equipment and employees. Right now, the high Canadian dollar is definitely giving companies some incentive to invest in machinery equipment or technology for their workers. But even though firms are willing to invest in technology or new machinery and equipment, they still need to have a good strategy so they can motivate their employees to learn to use the new technology effectively. I think those two aspects are the ways employers need to invest because just having the technology won't help if employees don't know how to use it properly.

Terence Yuen, research economist, Watson Wyatt Worldwide

Because the Canadian dollar is stronger, we can now afford additional equipment to become more productive. We also have a shortage of skilled workers in the manufacturing sector. That's part of the reason why we have to invest in the automation because there are fewer and fewer field workers to do it. And we will have to train our own people to run the new equipment that will make us more efficient. It's one of the downsides of prosperity that manufacturing has been taking a bit of a hit – well not a little bit of a hit, a big hit. People haven't been going into the trades like the older workers did. They want to go on to be lawyers, doctors, reporters and all those high-paying professions.

Now there is a renaissance of manufacturing and it is in higher value-added, high technology, more sophisticated systems and equipment. We have that opportunity and some manufacturers in Canada are taking that opportunity. They don't have to be large companies, but they are ones who are saying that it's time to venture beyond their own borders because it is a global market and they have to compete globally. Manufacturers that are not automotive and are unique to the world, they're going further abroad.

Robert Hattin, president, Edson Packaging Machinery Ltd.