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A robot in the Miralis kitchen cabinet factory based in Rimouski, Que, sands cabinet doors.

Handout

The pandemic has made many things painfully obvious to Canadian exporters – including the fact that investing in automation and technology is the future of exporting.

Firms that invested in automation are now reaping the benefits while those that didn’t are playing catch up, says Dennis Darby, president and chief executive officer of Canadian Manufacturers and Exporters (CME).

"That first group is now saying, ‘We need more new technology to meet demand,’ while the other is saying, ‘it’s a time to re-think operations.’ "

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With physical distancing and worker absenteeism two key challenges amid the COVID-19 pandemic, many Canadians exporters find themselves in the latter category, he adds.

That’s no surprise given the historical lack of investment in automation.

“Our productivity relative to OECD [Organisation for Economic Co-operating and Development] countries has been falling for years,” Mr. Darby says.

“A lot of that is because companies have been slow to adopt new technology.”

CME published a report last year warning about the lack of capital investment by Canadian manufacturers. It found spending on technology and equipment by manufacturers fell by 21 per cent between 2005 and 2017, and productivity suffered as a result.

Among OECD nations, Canada is fourth-last in productivity. In comparison, U.S. manufacturers' productivity has grown three times faster over the last 15 years, the report cites.

“Many Canadian companies had been substituting labour for capital investment,” Mr. Darby notes. “That’s not enough and investing in technology is critical for growth and being able to employ even more workers.”

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Today, just keeping existing workers on the factory floor is proving to be challenging. “What we hear from members is that COVID-related problems … higher absenteeism and physical distancing … are now driving interest in automation,” he says.

But investing in technology takes time, and those now behind in this transformation are unlikely to benefit while the pandemic rages, says Shelley Fellows, chair of Automate Canada.

"It’s not as simple as ‘run this software and the laptop’s operating system will do the rest,’ " says Ms. Fellows, who represents the nation’s providers of automation solutions. Those include AIS Technologies Group, a provider of industrial automation solutions, which Ms. Fellows co-founded (she is now retired).

She notes Canadian automation companies serve two markets today. One is Canadian exporters seeking to innovate because of the pandemic. The other is manufacturers in other countries.

Among the more in-demand technologies in both markets are “co-bots” – or collaborative robots.

“They’re designed to work safely side-by-side with a person,” Ms. Fellows says.

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Co-bots do heavy lifting or highly repetitive tasks while workers perform more high-touch, fine-motor-skill tasks. The technology is particularly of interest with the need for physical distancing on factory floors.

One company already seeing the benefits is Quebec-based kitchen cabinet-maker Miralis, which exports about 20 per cent of its product to the U.S. East Coast.

“We decided to invest a few years ago close to eight per cent of our topline revenue in capital expenditures,” says Daniel Drapeau, president of the Rimouski, Que.-based company.

He adds the catalyst came from visiting European companies, he adds

“That’s the amount most European companies have been doing whereas Canadian companies have been doing about three or four per cent.”

Adding robots has been a multi-year process for Miralis. But it’s been worth the cost, time and effort. He points to two machines that took over sanding duties at its factory, a role previously done by 12 workers.

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“It was the worst job in the company,” he says.

Mr. Drapeau notes that rather than automation eliminating jobs, it’s allowed Miralis to grow faster because machines increase production capacity. The strategy has been so successful it has even sped up the addition of a new robot that does cabinet pre-assembly.

“We were going to hold off until after the pandemic, but team members at the plant were asking us to get it going,” he says about the machine that can drill about two million holes a year.

“The people on the floor were asking for it.”

Still, Mr. Drapeau agrees incorporating new automation takes plenty of planning. “It can’t be done overnight,” he says. “It’s not something you can decide to do during the pandemic and see the benefits immediately.”

Still, firms operating in Canada that are involved in making that shift easier, are seeing a jump in business. One of them is i-50, which uses artificial intelligence (AI) and data to help companies examine their manual production processes and improve them. Its headquarters are in Silicon Valley, but its engineering and research are centred in Windsor, Ont.

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“Our technology is developed in Canada and then exported across North America and Asia,” says Khizer Hayat, i-50′s chief innovation officer.

He notes the tech company came to Ontario because the province offered numerous incentives and has a deep talent pool, ideal for building out its AI-powered technology to create “digital twins for manual manufacturing processes.”

This technology is in demand from manufacturers because it allows their industrial engineers to remotely analyze manufacturing operations that are still done using labourers and create a virtual replica allowing companies to rework and improve processes without disrupting real production.

“Before our platform, engineers were going onto the production floor with a stopwatch measuring the time it takes to do these activities,” Mr. Hayat says. “Our technology enables manufacturers to remotely monitor processes and improve processes remotely from home.”

The pandemic has only driven home automation’s benefits for Canadian exporters, Mr. Darby says. “Everybody now is asking, ‘How do we accelerate this?’”

Even Miralis is planning a new factory in Rimouski, with construction starting next year, that would make it one of the most automated manufacturers in its field.

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“We want to raise the bar,” Mr. Drapeau says. “This is all about growth.”

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