Highlighting innovation and economic growth in Alberta Issue Two 2005

he Canadian Environmental Technology Advancement Corporation – West (CETAC) is

driven in its purpose – getting innovation to com-mercial level. The Calgary-based not-for-profit has, for 10 years, helped over 500 companies to move innovative technologies into the marketplace. “The CETAC mandate is environmental tech-nology commercialization,” says Joe Lukacs, president and CEO. “Most new technology [in many industries] involves some environmental overtones,” he explains. “These are typically small companies, and do not have the resources to com-mercialize technology,” Lukacs adds.

CETAC operates primarily with funding support from Environment Canada, Western Economic Diversification and the Alberta Government.

“Over 90% of the innovation and commerciali-zation (in Canada) takes place in the private sec-tor – by small and medium enterprises (SMEs),” Lukacs says.

Traditionally, universities and large companies were perceived as sources of commercializing innovation, he notes. Because of this, funding for universities has served to create a healthy research network, but tended to overlook SMEs.

Propelling Innovation to the Marketplacet

“Funding excellence in post-secondary education and research means that we are investing in the people who generate know-ledge and intellectual property. The next step is to maximize our return on investment by ensuring that knowledge and intellectual property can be translated into economic value by commercial-izing technology and creating companies.”

John MastersPresident and CEO, Calgary Technologies Inc.

ecuring Tomorrow’s Prosperity outlines Alberta’s strategy to create a value-added

economy by building on today’s success. This strategic direction has four components: enhanc-ing our competitive advantages, building a system of innovation, strengthening small and medium sized enterprises and focusing on priority value-added sectors. In this edition of Advantage Report we bring examples of innovation in action and where to learn more. “We usually think of innovation in the lab, but it can take place in the mailroom, on the shop floor

“Innovation [is actually] driven by and taking place by the very small companies,” Lukacs says. “CETAC is probably the only organization that connects innovation with the environmental mar-ketplace – we have learned there is a real gap.

“We have a strong market created by upstream oil and gas and [a little bit now] by the oil sands,” he says.

Unlike many other organizations, such as ven-ture capitalists, CETAC helps companies at any level build strategies to commercialization. “We have developed the tools and the business model that links innovation with the market – we then develop a tool kit for companies to use.”

The organization focuses on evaluating compa-nies and benchmarks where a company stands. By finding weaknesses and strengths it guides firms through a path of improvement.

In taking this approach, Lukacs says, “CETAC is helping the companies build capacity and move the business ahead.”

For more information, contact Margaret Kelly at 403-777-9595 | e-mail: mkelly@cetacwest.com, or visit the website at www.cetac.com.

and in the boardroom,” says Alberta Economic Development’s senior director of strategic manu-facturing, Brad Trefan. “We are focused on building a province-wide culture of innovation by enhanc-ing co-operation, collaboration, and convergence.”

For more information about Securing Tomorrow’s Prosperity, visit www.alberta-canada.com/stp/, or contact Brad Trefan at (780) 427-6496 (toll-free via 310-0000) | e-mail brad.trefan@gov.ab.ca.

Getting to Work With Innovation

sHighlightsn Building on Innovation

n Value-added Culture

n Profiles of Innovation: Net Safety Monitoring Dynastream Innovations

n Thinking Lean

n Technology Exchange

n By the Numbers

n Calendar of Events

n a very big way, Net Safety Monitoring Inc. has caught the lean bug. The Calgary-based manufacturer supplies continuous safety monitoring equipment for petro-chemical plants, refineries and compression stations

across Western Canada. Since 1996, the firm’s in-house engi-neered technology of industrial gas and flame detectors has grown to reap annual sales in the multi-million dollar range. Today it has 35 employees. Net Safety targeted international markets as a path to further growth, but its domestic busi-ness was growing too fast for the manufacturing process to keep up. “Our company had been experiencing double-digit growth in Western Canada,” says manufacturing and opera-tions manager Kevin Falenda.

With the production line becoming stretched to the limit, the vision of expansion into the United States, the Middle East and Asia was fading.

Anticipating the production crunch, the company tackled the issue with a series of traditional management strategies to increase quality and reduce costs. This plan included spend-ing 5% on in-house research and development to increase compactness, sensitivity, versatility and reliability of its prod-uct. Net Safety also turned to outsourcing components to specialist manufacturers. However, increased productivity and reduced delivery times were elusive.Something more was needed and the answer came in late 2003.

Falenda attended a lean manufacturing workshop spon-sored by Canadian Manufacturers and Exporters, National Research Council and Alberta Economic Development. “It’s so simple, it shook me to the roots,” he recalls. “You could build faster and reduce labour.”

Net Safety joined a lean consortium, a working support group of companies pursuing lean processes. The company began to re-organize manufacturing operations through value stream mapping. “We looked at the gas and flame lines and got a large hit-list of improvements,” Falenda explains. “For instance, we used to test run a new unit for 24 hours, [but] we realized we could reduce that time to 15 minutes.” In addition, the company reduced travel on the manufactur-ing line from 1,200 feet to 250 feet. On the procurement side, Net Safety reduced the number of vendors, developed strategic alliances and instituted lean inventory and supply

management practices. Continuous improvement became a focus for employees and management. “We have a big board and we list all the parts and processes,” he outlines. “Then we sit down and say, ‘if we didn’t do this, we’d save a lot of time and fuss.’”

The results are impressive. “The deliveries used to be four to six weeks, now it is two to four weeks – a 50% improve-ment,” Falenda says. “Inventory has been cut in half, and we hope to cut that in half again,” he adds. “Floor space has decreased by 35% and it will be 50% by the time we’re done.” And profits are way up. “Our revenues per employee have increased by 40%. Our goal is to increase this by another 30% by year end,” he says. “Overall, our staff hasn’t increased – we’re far more efficient.”

While Net Safety’s lean manufacturing experience is a suc-cess, the company is only part way through. “We are now engineering a new lean product design and we are going to get the financial department to do lean accounting,” Falenda adds. “Then we’ll go outside to the supply chain and help clean them up.” He now sees the company on track to achieve the 10-year goal to become export weighted. “Today sales are predominantly Western Canadian and about 15% international,” Falenda says. “We want to be the other way, 80% export, 20% domestic.”

For those considering lean manufacturing, he recommends workshops or conferences. “That’s where I saw the light,” Falenda says. “You see the successes that people are having. It’s really common sense – that’s the beauty of it. It’s so sim-ple, it’s embarrassing.”

Lean and Keen

When Net Safety Monitoring embraced lean manufacturing

processes, it decreased production costs and time and increased profitability

iNet Safety Monitoring Inc.

Year founded: 1996

Primary product: Flame and gas detectors

Headquarters: Calgary

No. of employees: 35

Key markets: Western Canada, United States, Middle East

Contact: Kevin Falenda

Phone: (403) 219-0688

E-mail: Kevinf@net-safety.com

Website: www.net-safety.com

Kevin Falenda

profile of innovation

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n incredible view of the Rocky Mountains might be the impetus that provides inspiration to one of the most innovative companies in the province. But, adding value is also about taking creations

to the international marketplace. “We have 50 to 60 new ideas every year, but we only use one

or two,” says Kip Fyfe, president and CEO of Dynastream Innovations Inc. “We always have way more ideas than we could ever possibly use.” The firm designs and manufactures personal monitoring devices. “They [the devices] detect position and motion,” he says. With inertial sensors, wire-less communications, digital signal processing and software, the equipment measures speed, distance and the amount of energy consumed by an individual.

The Cochrane-based firm set up shop in 1999, when Fyfe’s brother, Ken, a mechanical engineering professor at the University of Alberta, approached Kip with a dream of mak-ing a device to measure speed and stride for runners. “He had a concept that looked like it would work,” he recalls.

With the help of a loan from the National Research Council, the firm developed a product targeting sporting goods manufacturers. Alberta Economic Development supplied contacts, and through cold calls and hard work, the company eventually caught the eye of Nike. The first product made for the athletic shoe giant was the sdm[triax 100. From the running shoe, the Dynastream pod wirelessly transmits data to a watch worn by the runner. The system then generates analytical information about the stride.

The success of sdm[triax 100 and Dynastream’s other speed and distance products led to more contacts with other major companies, including Philips Electronics of the Netherlands, which is marketing a combination speed, distance and MP3 player, and Finland-based Polar Electro, a manufacturer of human monitoring devices.

“In the last one-and-a-half years, we’ve been in the health and wellness field, which is a good market,” says Fyfe. “Our Dynastream branded product, the AMP 331, is an activity monitoring system. Its primary use is seeing if you are getting enough exercise,” he explains. “It’s a downloadable device that straps to the ankle,” Fyfe adds. “It accurately shows how much energy you’ve expended.”

In spite of its partnerships with global players, the com-pany’s 35-person staff handles all engineering in-house at the Cochrane office with manufacturing in Calgary. Although the privately held company does not release revenue or sales figures, its growth rate is phenomenal, Fyfe advises.

“In 2004, our revenues increased three times compared to 2003,” he says. “We expect good things for 2005.”

Dynastream’s explosive growth starts with innovation, and is complemented by a solid game plan. “Our strategic direction is the development of not only speed and distance monitors for the sports market, but good solutions for both industrial and medical markets,” Fyfe says.

The company brings staff together annually for a formal strategy planning session. Ideas are presented and weighed in light of several factors. “We decide which ideas are the best strategic decisions for us, and what can be done in the allotted time frame and budget.”

Recently, Dynastream developed an inexpensive, wireless radio frequency technology that uses extremely low levels of power. “We’re going after wireless solutions for consumer, medical and industrial processes,” Fyfe says. “You can take an inexpensive module and have it report data wirelessly to a receiver. It’s a very economical way of supplying informa-tion.” He has some advice for those building a company based on new ideas.

“Innovation is very expensive; we spend 40% of our budget on research and development,” he explains. “We go with ideas that have good market potential and follow [our] strategic direction.”

Running Faster, Jumping Higher

A Cochrane-based company credits innovation for a global client list that includes Nike and Philips Electronics

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Dynastream Innovations Inc.

Year founded: 1999

Primary service: Smart devices

Headquarters: Cochrane

Branch office: Hong Kong

No. of employees: 35

Key markets: United States, Europe

Contact: Kip Fyfe

Phone: (403) 932-9292

E-mail: dynastream@dynastream.com

Website: www.dynastream.com

Kip Fyfe

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June 6-10, 2005North American Regional Conference for Lean ManufacturingThe Edmonton Westin Hotel, Edmonton, Alberta

Lean practitioners from across North America will demonstrate the benefits of lean manufacturing and how to implement lean practices.

Contact: Alberta Division – Canadian Manufacturers and ExportersPhone: (780) 426-6622Fax: (780) 426-1509 Website: wwww.measureupforsuccess.com

June 13, 2005Manufacturing and Medical Devices Workshop and Mini Trade Show Olympic Volunteer Center, University of Calgary

Alberta Economic Development in co-opera-tion with the International Health Business Opportunities Conference Foundation, Alberta Health Industry Alliance and the Alberta Heritage Foundation for Medical Research present a one-day workshop related to the manufacture of medical devices and health products.

Contact: Sanda Gheorghiu, director - Health and Bio Industries, Alberta Economic DevelopmentPhone: (780)427-6615e-mail: sanda.gheorghiu@gov.ab.ca

September 26 - October 7, 2005Innovative Manufacturing Week (IMW) Locations across Alberta

Events, sessions, trade shows and plant tours high-lighting leading-edge manufacturing technologies, processes and products. Share resources and find tools to improve global competitiveness. Join the IMW by organizing and hosting an event or plan on attending one.

Contact: Brad Trefan, senior director, Alberta Economic DevelopmentPhone: (780) 427-6496e-mail: brad.trefan@gov.ab.ca Website: www.alberta-canada.com/imw

he growing business of environmental technol-ogy in North America spells opportunity for

Alberta companies. A showcase for homegrown innovation is the Remediation Technologies Symposium 2005 (RemTech 2005) being held in Banff October 19 to 21. The third annual confer-ence, sponsored by the Environmental Services Association of Alberta, is designed to share ideas on innovation and technology.

“We started (RemTech) with demand from the local industry for a conference dedicated to tech-nical issues and presentations regarding soil and water remediation,” says Joe Chowaniec, ESAA’s director of program and event development. This year’s event will highlight 40 exhibits, 400 delegates from more than 100 companies and 40-

Advantage Report is a regular update on the progress of the province’s economic strategy as outlined in Securing Tomorrow’s Prosperity. The newsletter provides articles about success-ful value-added implementation and highlights how industry and government are working together to secure an innovative and productive economy. For more information contact: Brad Trefan at (780) 427-6496 (toll-free via 310-0000) | e-mail brad.trefan@gov.ab.ca

Calendar of Events

Environmental Booster t 50 technical papers, he says. “Papers presented

are based on actual technology that is either field tested or being field tested,” he says. “It creates a good opportunity for information and knowledge sharing and companies can get ideas to solve prob-lems.”

Chowaniec adds that this year’s event has a busi-ness component. “Our keynotes are designed to present opportunities to people and bring them awareness of other opportunities that exist outside of their traditional markets.”

For more information contact Joe Chowaniec at (780) 429-6363 | e-mail: info@esaa.org, or visit www.esaa.org or www.remtech2005.com

hinking globally? If the answer is ‘yes’ the place to be is the North American Regional

Conference for Lean Manufacturing being held in Edmonton June 6 to10. “The theme of the conference is competing and winning in the global marketplace,” says Brian McCready, vice-president of the Alberta Division of the Canadian Manufacturers and Exporters (CME). “We look at it as – your competitor is only one mouse click away – in other words, your customer can go to the computer today and buy from the global market.” With registered delegates already closing in on 200, the co-sponsored CME and Association for Manufacturing Excellence event has the makings for an outstanding success. Highlights include 32 best practices presentations from companies that have achieved some significant organizational change, McCready outlines. The agenda allows opportunity to participate in 12 plant tours and listen to 11 keynote speakers share experience and insight in best practices, lean thinking and leader-ship from sectors ranging from manufacturing to health care. “It is truly a best practice conference – a world class conference,” McCready notes. “It’s an opportunity for any organization that is trying to become a global player to get the information on how to get there.” For more information contact the CME at (780) 426-6622, or visit www.measureupforsuccess.com.

Global Theme Maps Conference

t 1,085 number of environmental companies in Alberta

$2.3 billion revenues of Alberta’s environ-ment sector (excluding oil and gas)

25,900 Albertans employed in the environmental sector

$21.8 million Value of environmental GOODS exported by Alberta companies

$127.8 million value of environmental SERVICES exported by Alberta companies

75 collection sites across the province are accepting unwanted televisions and computers*

Sources: Statistics Canada, Environment Industry Survey 2002

*Environmental Services Association of Alberta

By the Numbers