Canadian aerospace industry urged to embrace advanced manufacturing

Guest Contributor
November 27, 2014

AIAC Conference 2014

Canada's aerospace industry is being cautioned not to rest on its laurels despite its status as the fifth largest national aerospace sector globally by revenue. Unless companies inculcate a more effective culture of innovation and accelerate their embrace of advanced manufacturing, big data, targeted skills development and the Internet of Things, aggressive competitors from developed and developing nations could divert future investment and erode market share.

Embracing innovation and the next wave of manufacturing technologies and processes was the multifaceted message delivered to senior industry leaders who converged on Ottawa last week for the 2014 Canadian Aerospace Summit, an annual gathering presented by the Aerospace Industries Association of Canada (AIAC).

From micro machining, bio- and nano-based materials and additive manufacturing technologies to using the Internet to connect products, business process and customers, the need for change was in the air, as was the imperative of environmental sustainability. The latter encompasses the efficient use of energy, from generation and storage to its use in propulsion systems.

"Industry 4.0 is the fourth industrial revolution. It's the implication of what happens when you marry cyber systems and fiscal systems and what comes out of that … All of these are revolutionary changes and if anything is going to change the marketplace, it's how all of these things are combined ," said Dr Jayson Myers, president & CEO, Canadian Manufacturers and Exporters. "It depends on the adoption of these technologies and their effective and efficient management. There are too many technologies sitting and not being used on production floors because they were brought in to solve the wrong problems and they're not currently managed."

Myers says the ability of the aerospace sector to participate and excel in Industry 4.0 will require employees with a broader range of skill sets who can work with and understand customers, solve complex problems and transcend disciplines. Embracing change will also require money and policies that facilitate that change.

"At the end of the day, vision without money is hallucination. Money is critical to making this work and it goes back to the importance of efficiency and cash flow," said Myers. "Revolutionary change also presents a number of critical policy issues that members of the Canadian manufacturing coalition are pushing for … The importance of accelerated depreciation, investment tax credits or investment in capital for new equipment. That's what is needed to enhance commercialization and technology demonstration … One of the arguments I've made to the Department of Finance is the importance of accelerated depreciation and .. it's a struggle."

Myers also emphasized the importance of Internet power and connectivity as the key to a holistic approach to manufacturing innovation.

"People talk about the Internet of Things … It's an Internet that enables real-time, dynamic value creation. A part of that is big data and computing capabilities that drive analysis around customer needs and analysis of control around manufacturing processes. The whole narrative of electronics and sensors and visualization systems integrated into reconfigurable automation units is this area of mechatronics which is growing very rapidly."

Canadian Aerospace
Industry Snapshot

Global ranking by GDP and revenues5   
Productivity rank 1   
R&D intensity ranking 3   
R&D spending increase 2007-201241%   
Productivity growth 2007-201219%   
Total employment170,000   
Manufacturing as % of activity70%   
Direct revenue$22.8B   
Revenue across supply chains$42.0B   

Innovate or abdicate

Many recent reports have expressed concern over Canada's innovative capacity and its ability to adapt to new competitive pressures and technologies. Perrin Beatty, president and CEO of the Canadian Chamber of Commerce, said Canada would be wise to examine the policy and regulatory attributes of countries such as Switzerland and Germany which rank highly in terms of competitiveness and capacity to innovate.

Their success in the areas of skills training, collaboration between the business and academic sectors and high value-added products can be modified for Canada's unique innovation ecosystem. A recent example is the formation of the Consortium for Aerospace Research and Innovation in Canada (CARIC), a national organization co-located with and modelled on the highly successful Consortium for Research and Innovation in Aerospace in Quebec (CRIAQ) (R$, August 21/14),

Beatty said the aerospace sector has much to offer the manufacturing sector as a whole and outlined a list of "lessons learned" for boosting innovation and competitiveness:

* Collaborate rather than compete. Innovation based on networks, not hierarchies;

* Make innovation an input, not a byproduct;

* Differentiate between innovation and invention;

* Look to Switzerland and Germany for developing better connections for supporting training and apprenticeships;

* Build for speed. Bring products to market quickly, avoiding scrutiny from the competition;

* Build fast and cheap. Failure is part of innovation. Learn from failure, contain costs and limit the time it take to realize an initiative has failed; and,

* Scale innovation and improve the ability to compete by embracing change and adopting disruptive technologies.

"We must innovate. If we don't innovate we abdicate," said Beatty. "There's an increasingly crowded and competitive global market ... Aerospace in Canada has taken a long-term collaborative approach to growing the innovation ecosystem and this approach has scored some wins."

Skills rankings slipping

The critical element of skills to maintain and enhance aerospace manufacturing has taken on a sense of urgency with the release of a global ranking of science, technology, engineering and math (STEM) scores. Canada's performance in the latest OECD Programme for International Student Assessment (PISA) was cited by John Manley as a cause for concern. While Canadian student scores in literacy, mathematics and science literacy remain above the OECD average, they have slipped in the past 14 years.

In 1998, Canadian students scored 5th and 6th respectively for math and science. By 2012, they had fallen to 10th and 12th, with an overall rank of 13th.

"Thirteenth is not acceptable. Out scores are still dropping and not enough attention is being paid to this," said Manley, CEO of the Canadian Council of Chief Executives, adding that the Emerson aerospace report recommended the introduction of training grants. "Aerospace is built on a skilled workforce." Manley urged greater collaboration between federal and provincial governments to boost STEM completion rates.


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