Independent Edmonton-based LogiCan flourishes: Hicks on Biz column originally published in Edmonton Sun Sat. March 23, 2013
Before Christmas, using plastic products maker Drader Manufacturing as an example, this column highlighted a glaring regional business contradiction.
Conventional business wisdom often declares that manufacturing (outside the oilpatch) in this neck of the woods is "impossible".
If that's the case, hundreds of good businesses are indeed doing the impossible.
"That column hit a home run," responded Warren Sheydwasser of LogiCan Technologies. "Manufacturing can and does exist here. We manufacture electronic circuit board assemblies for companies all over the globe. LogiCan is a near-shore Edmonton-based company that has seen almost two decades of growth without a single loss."
How does an independent Edmonton company flourish in such a ferociously and globally competitive business?
How has LogiCan grown without a nearby, supportive, sector cluster? Other than MEMS (micro-electromechanical systems) manufacturer Micralyne, no similar business exists in Greater Edmonton.
LogiCan, in its own building in the Edmonton Research Park, has grown from 80 employees in 1994 to 200 today. Two shifts work from 8 a.m. to midnight on 10 robotic lines.
In 1993, then plant manager Harvey Sheydwasser led a management buy-out when the original owner, American semi-conductor and chip manufacturer LSI decided to get out of Canada. Ironically, LSI had been lured to Edmonton by major government incentives -a practice which LogiCan now shuns.
On Jan. 1, 1994, LSI Canada was re-born as LogiCan Technologies, a value-added, independent electronic contract manufacturer and manufacturing service.
Warren, son of Harvey, is LogiCan's director of business development.
He has a pretty good handle on why LogiCan has done so well, not in Asia, Mexico, or Silicon Valley, but in Edmonton.
"We never depended on a cheap Canadian dollar. In fact, we've always operated in US dollars," Warren says. "Even quotes to Canadian customers are in U.S. dollars. I can't predict exchange rates. So why try?
"We build products more efficiently for our customers than they can themselves. Otherwise why would they come to us? We offer value-added manufacturing solutions. They don't have to make major capital investments in manufacturing."
LogiCan steers clear of mass consumer products. "Our clients need specialized, high quality, limited runs of their components. If it's a medical device, we're medical ISO approved. We're approved by the US military.
"We stay on top of new manufacturing technologies, especially robotic assembly. When the phone rings asking for new technology, i.e. smaller and smaller components, we're ahead of the curve."
It's about old-fashioned customer service. "We ship hardware, but we deliver service: All our departments are involved in weekly conference calls with customers. If there's any issue, it's resolved on the spot."
A long-time company policy of avoiding government hand-outs is not ideologically driven. "It's a decision based on the best use of our time and resources," says Warren. "The paperwork associated with grants and subsidies is enormously time consuming. Part of our philosophy is not to be distracted from our core business. LogiCan has no company cars, no golf members and no suite in Rexall Place.
So how do you compete against China?
"Reliability," says Warren. "Our customers know they are dealing with a company that is committed to their business.
"Trust: We're not going to steal their ideas.
"Quality: Our engineers are manufacturing engineers -we tweak designs so they are easier and less expensive to make.
"Automation: We stay on top of productivity and innovation. A $20,000 robot ends up costing $3 an hour. Automation lets us hire top manufacturing engineers to program robots."
As for distance from customers ... "We keep telling our customers, Edmonton is a lot closer than China!"
How does LogiCan compete for plant workers, in worker-hungry Alberta? Even with automation, making circuit-boards is labour-intensive. "It's not easy," says Warren. "We take care of our people as best we can. We have in-house training, people move up internally. Forty of our employees go back to LSI days.
"There is an Alberta advantage for manufacturers," Warren sums up. "It's not just that obvious. It's our workforce, work ethic, entrepreneurial spirit and mentality, our resources ... our access to the American market, our honesty and the fact we abide by the rule of law. Those are definite advantages!"
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* LogiCan Technologies: Circuit board
manufacturer, 200 employees, 10 highly automated assembly lines, two shifts a day.
LogiCan's recipe for success:
* Stay focused on customer satisfaction: Ignore distractions like chasing government grants, golfing or entertaining in a Rexall Place suite.
* Offer full manufacturing solutions.
* Be your customer's virtual in-house manufacturing division.
* Offer long-term employee satisfaction.
* Automate wherever possible.
* Build expertise in programming robots.
* Work and think in American dollars.
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780-707-6379 @hicksbiz www.hicksbiz.com