Investing in artificial intelligence pays off for Canadian supplier Martinrea

Martinrea International turned the loss of a major contract at one of its Toronto-area plants into an opportunity to upgrade it with cutting-edge technology, making it a showcase for the company’s advanced manufacturing capabilities.

“It is a wonderful illustration of how to manufacture competitively in Canada against low-wage jurisdictions,” said Martinrea Chairman Rob Wildeboer.

“Its revenues are considerable. Every year, the line tends to run faster and with fewer people on the line. So we can compete in Canada with Mexico and the United States.”

About 10 years ago, Martinrea poured considerable resources into its Alfield Industries plant in Vaughan, 40 kilometres north of downtown Toronto, after it lost a major contract to produce parts for an automaker.

While not disclosing the amount of the investment, Wildeboer said it would cost well over $100 million to replicate it, given the equipment and technology.

Today, the 200,000-square-foot plant (19,000 square metres), which employs about 400, produces the underbody of the Chevrolet Equinox crossover that’s built at General Motors’ CAMI Assembly plant in Ingersoll, Ont., as well as stampings, Martinrea executives said.

It also uses leading-edge welding and robotics as well as artificial intelligence. AI helps Martinrea better learn how to speed up processes and make the plant more productive. The company also uses data and its workers’ expertise to develop its own technology, helping keep costs down while making the technology more efficient.

“Ten years ago, we would have been a consumer of technology,” said Stuart Fraser, Martinrea vice-president of operations. “Today, I would say that we’re a co-developer of that technology.”

The results, Wildeboer said, are “complex assembly lines” designed to improve efficiency.

“The lines are designed to be closer together,” he said. The idea is to “put the lines around the people rather than the people around the lines.”

NO SPACE? ‘MAKE IT FIT’

The investment in Alfield began to pay dividends in 2015 when it won a contract to build parts for Equinox production at CAMI, Wildeboer said.

To accommodate the new program, Alfield had to overcome space constraints. So Martinrea was forced to think creatively, Wildeboer said.

“The [managers] of the plant basically said, ‘We’ll figure out how to make it fit.’ You can’t just add 20,000 square feet (1,900 square metres) to a building when you’re in Toronto. And we couldn’t go next door because there was an operation there.

“They basically said … ‘If I streamline the process and move the lines closer together, not only can we do it better, but we can fit it in’ ” the building.

The GM program — and the company’s investments — reinvigorated the plant, which had employed as few as 100 people before the Equinox.

“Without winning the work, the future of the plant was imperiled,” Wildeboer said. “Plants need to win work to survive and thrive.”

Alfield has been such a success for Martinrea — the third-largest Canada-based parts supplier based on annual sales — that plant managers have been tasked with applying their processes to some of the company’s other factories, including one in Tillsonburg, Ont., that will soon build parts for the Jeep Grand Cherokee, Wildeboer said.

INDUSTRY 4.0

Martinrea’s investment strategy coincided with the emergence within the auto sector of the Industry 4.0 concept. For it, manufacturers adopt data and leading-edge production technologies that are more digital, connected and reliable, said Brendan Sweeney, managing director of the Trillium Network for Advanced Manufacturing, an advanced-manufacturing advocacy based at Western University in London, Ont.

Germanyand Austria-based manufacturers are leading the way globally when it comes to embracing technology, Sweeney said. Canada finds itself behind other countries including Japan, South Korea and the United States, despite being home to a highly skilled workforce and top universities working on AI and other relevant technologies.

“Are Canadian manufacturers well positioned to adopt some of these technologies, to make better use of these technologies? Absolutely,” Sweeney said. “Will we find a couple niches or specific technologies where Canadian manufacturers can be at the forefront? Sure.

“But are Canadian manufacturers the leaders in this? No.”

Jeanine Lassaline-Berglund, president of the Canadian Association of Moldmakers, said many Canadian mold makers use information technology to speed up their processes.

“It’s no secret that in mold making, the secret sauce, if you will, to being successful is the ability to cut metal faster and with more precision.”

The problem for many Canadian manufacturers is that it is difficult to adopt new technologies unless a plant lacks product to build and is not running regularly, as was the case with Alfield. There is also financial risk in investing resources into new technology, Sweeney said.

Still, “the companies that are not adopting this stuff are going to have a hard time” in the future, Sweeney said. “The companies that have been adopting this stuff over the last seven or eight years are going to have a much better time.”