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In Quebec, IBM finds a better way to get things done

An IBM employee inspects a partially assembled micro-processor in their Bromont, Quebec plant.

Christinne Muschi/christinne muschi The Globe and Mail

For the 2,800 technicians and engineers at IBM's sprawling plant in the idyllic Eastern Townships, finding new and better ways to operate isn't a luxury. It's a necessity.

Every product the Bromont, Que., factory makes quickly becomes obsolescent - which means the plant must constantly adapt to new technologies and apply new skills if it is to survive.

The factory, 75 kilometres east of Montreal, started out in 1972 making Selectric typewriters. It has worked its way up to become IBM's biggest facility for testing and assembling advanced microchips. Its products go into the planet's most popular video-game consoles and fastest supercomputers.

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Arch-rivals Sony, Microsoft and Nintendo entrust the Bromont plant with testing and assembling the ultra-powerful microchips that go into the PlayStation 3, Xbox 360 and Wii. That's like Coke and Pepsi using the same lab to test their formulas.

IBM has provided a solid foundation for the factory's success, having invested nearly $1.3-billion in the Bromont plant since its founding. Still, manufacturing director Ray Leduc argues that it's a combination of relentless training and an egalitarian philosophy that has allowed the Bromont plant to boost its productivity while cutting costs and keeping its head count stable through the recession.

"We don't compete on labour rates, we compete on skill, on innovation, on time to market," said Mr. Leduc, a veteran from the typewriter days, who was appointed last year to be a part-time adviser to Canada's National Research Council. "A Formula 1 driver is also a machine operator. That's the model we use: We take a very sophisticated piece of equipment that costs a lot of capital, and we give it to a very highly skilled person in whom we've invested a tremendous amount of development, and have them run it better than anybody in the world."


Bromont's high-performance model could provide clues into how to increase labour productivity in other parts of Canadian industry. Bank of Canada Governor Mark Carney has repeatedly warned that Canada must boost its output if we are to maintain our standard of living in the face of foreign competition and an aging population.

Mr. Carney notes that productivity growth declined during the recent recession, the first time that has happened in three decades. Productivity usually grows during slowdowns because companies are forced to do more with less.

"Canadians don't understand how productivity relates to them, and as a result it has a bad connotation," said Craig Alexander, chief economist at Toronto-Dominion Bank. "But productivity ultimately means Canadians being able to have a better standard of living … It's the most fundamental thing in terms of the economy, and the really discouraging thing is Canada's performance over the last decade-and-a-half has been absolutely atrocious."

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While Canada's productivity has crept ahead by only about 0.7 per cent a year during the past decade, managers at Bromont say their ability to harness the creativity of their work force has allowed some units to boost productivity by an impressive 10 per cent or more a year.

Investor Education: Productivity

An important part of the plant's productivity recipe is a constant emphasis on looking for new and better ways to do things. In an average year, the plant's innovative practices result in 12 patents, usually in advanced areas of microtechnology.

Another element of the Bromont formula is maintaining a stable, happy work force. The plant has gone through constant, sometimes radical transformations with many of the same people. Turnover is a mere 1 to 2 per cent a year, compared with rates closer to 20 per cent at Asian manufacturers.

"In a lot of places in southeast Asia there's the operators, there's the engineers, there's the management, and it's very hierarchical," Dave Danovitch, the plant's chief engineer, said. "Here, we try to eliminate the hierarchy and get these people together to listen to what they're saying and respect each other's ideas.''

Regular meetings infuse staff with Japanese ideas such as kaizen, which emphasize brainstorming and continuous small improvements. Employees are encouraged to bring their ideas to management.

For instance, one of Bromont's many patents came after three employees huddled together to solve a problem they ran into when they were testing thumbnail-sized chips. The traditional pieces used to hold the modules in the test bed couldn't adjust for slight differences in size from part to part, which resulted in the tester rejecting potentially good parts.

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The team came up with a self-centring, spring-loaded concept, which, after several trials and designs, was able to solve the problem using such a novel approach that IBM decided to seek patent protection.

"It really is from the employee base up," said Maureen Jodoin, Bromont's controller. "Everyone on that floor is a problem-solver."

People in the plant receive an average of five days a year of formal training in skills development, but that figure doesn't include on-the-job training. IBM encourages staff to take on new roles and responsibilities.

A program dubbed "three by 10" aims to have employees' responsibilities change three times every 10 years. "You get more efficient problem-solving, and more efficient team-working, because you know the impact an idea of yours might have on another group," said Claire Langan, manager of innovation, who is an embodiment of the program, having held 10 different jobs in her 28 years at the plant.

Andrew Reid, founder of Toronto-based corporate training firm Big Fish Interactive, says companies of all sizes stand to benefit from fully engaging their employees.

"One of the greatest competitive edges a company can give themselves, especially these days, is getting each staff member to see their role in contributing to positive change," Mr. Reid said. "There's a massive difference between just doing the job and being a high-performance culture."

Harnessing university brainpower

While IBM Bromont managers try to make full use of the expertise inside their plant, they also want to capitalize on outside intellects to help bring products to market more quickly.

IBM is teaming with Dalsa Semiconductors Ltd., Sherbrooke University and the federal and provincial governments to build a centre that will focus on a new generation of microtechnology.

The centre, which will open next year in Bromont, is intended to harness university brainpower, says Normand Bourbonnais, Bromont's director of technology development. It will aim to speed up development of crucial applications such as 3-D technology that could be used to help doctors find and treat cancers and other diseases, Mr. Bourbonnais said.

"There's unbelievable knowledge in the universities and the network of research associations that we have in Canada, but these guys don't know what are the real problems that we're facing because we don't work with them," he said. "So they work on stuff that they believe is important, and it is - it may become a product in 10 years or 15 years from now. With this centre, what we want to do is bring researchers right with us so they start working on projects that we need in five years."

About 250 people will work at the centre, including 200 postgraduate students who will rotate through the centre over five years. IBM and Dalsa have committed a combined total of almost $41-million to help fund the centre over its first five years, while Industry Canada has pledged $83-million and the Quebec government is spending $95-million. The partners are also working with other companies in the area and in the microtechnology field to get additional support, Mr. Bourbonnais said.

Smart manufacturing


Average annual productivity gain for IBM Bromont's business units


Reduction in the plant's energy consumption from 2007-2009

40 to 50 million

Parts produced per year


Export value per year


Average number of the plant's innovative practices that are translated into patents each year

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About the Author
Economics/business writer

Jeremy has covered Canadian and international economics at The Globe and Mail since late 2009. More

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