At a time when Canadian exporters are taking their lumps from a devalued U.S. dollar, a few shrewd operators have managed to buck the trend.
Daryl Friesen, CEO and general manager of Edmonton’s Flexxaire Manufacturing Inc., is one of them.
A down-to-earth working guy, Friesen doesn’t consider himself a corporate genius. But he does know how to follow sound advice.
Friesen remembers sitting through a meeting a couple of years ago of the member-driven Canadian Manufacturers and Exporters, and absorbing some ear-opening data.
“The CME recognized many Canadian manufacturers were enjoying success solely because of the differential between the then-healthy U.S. dollar and our own soft currency,” recalled Friesen, whose company exports 80 per cent of its annual production. “The association helped some of us realize the good times couldn’t continue forever.”
They didn’t, of course.
Eventually, the U.S. greenback lost ground while Canada’s loonie perked up like a sixty-something on Viagra. Unprepared Canadian manufacturers found themselves losing orders, as the robust northern dollar convinced U.S. customers to turn to domestic suppliers.
“(U.S. dollar) devaluation did hurt us,” Friesen conceded. “But not nearly as much as the manufacturers (that) weren’t proactive.”
When he got home from the meeting, Friesen huddled with his senior people and subsequently adopted what Friesen calls a “lean” manufacturing model.
And last month, the CME acknowledged Flexxaire’s success by handing the CEO a Canadian Innovation Award for New Technology during a ceremony in Toronto.
Specifically, the award went to Flexxaire for a new line of products known as the AX Series of pneumatically actuated fan units, sold to the company’s customers in the heavy-equipment, forestry and construction industries.
When first introduced in the early 1990s, Flexxaire’s heavy-duty fans created a stir because of a feature known as variable pitch: machine operators can save expensive fuel by adjusting the amount of cool air being drawn through their radiators. Flexxaire fans also clean airborne debris from radiators by purging them by means of a powerful backdraft.
According to Flexxaire engineers – and testimonials on the company website (www.flexxaire.com) – such features reduce downtime while adding years of life to the engines mounted in monster machinery. That translates to major savings on humongous haulers that sometimes carry pricetags as hefty as $2 million each.
Friesen insists that Flexxaire’s newly streamlined manufacturing processes are directly responsible for the success of the AX Series.
“We’ve cut our lead time on these fans to three days,” he said. “Two years ago, it was taking us from six to eight weeks to get our product to the customer.”
Flexxaire’s recipe was a back-to-basics approach. “We used to take too much time to process an order,” Friesen began. “We started with the order, then got the purchasing and production departments to sign it off, to make sure we could deliver the product at the required time.”
Once that was accomplished, sales orders and work orders were drawn up.
But now . . .
“We’ve eliminated the waste steps. We’ve lopped three days from the process.”
On the production side, technicians were regrouped into “work cells.”
Every part, tool and component a worker is likely to need during assembly is now stored within a four-foot radius of the workbench.
“We just realized that if we don’t get better at what we do, we may not be around very long,” shrugged Friesen. In the past, tire-kickers have been scared off by the cost of the innovative, high-performance fans produced in Flexxaire’s factory, near Edmonton’s western city limit.
But the new production/design methods have allowed the company to shave its prices significantly.
As chief executive of a private company that employs a staff of 31 (most of whom own shares), Friesen politely declined to reveal revenue figures.
But he did predict Flexxaire’s sales to customers such as Caterpillar, Finning Canada and Weyerhauser International will double within three years, thanks to no-fat production. Adding fuel to the fire is a succession of refinements and innovative products that justify the company’s yearly R&D budget of $500,000.
Among them is a spanking new line of pneumatically actuated fans (a bulked-up version of the AX) for gas compressor stations. Target market: Alberta’s oilpatch.
Flexxaire’s three primary shareholders anchor the company board. Friesen credits his progressive directors for endorsing the no-frills business attack.
“We don’t pretend we’re any smarter than anyone else,” he said. “We just recognized the need for our company to become more competitive.”
Then they bucked the odds by making it happen.
