Here is a good news story about Canadian manufacturers: They are finding a niche in the global market by creating value through ingenuity and innovation.

One example is Transformix, which specializes in complex custom-made automation machinery that assembles parts at remarkable speeds – up to 1,000 a minute. It also makes other huge machines, some up to 90 metres long, that cut, clean or manipulate pipes and tubes. Clients are manufacturers who make electronic equipment, tools, health care devices or almost anything that has to be assembled quickly.

Peng-Sang Cau, engineering chief executive officer, said, “The expertise built up over years of designing and building complicated, precision, high-speed assembly equipment out of modular components is what attracts customers. What brings the client to the table is our ability to think outside the box. Our ability to innovate is why these companies are coming to us.”

The key component that Transformix adds to this value chain is intellectual property – the design and construction smarts of its engineers. That’s the model that is helping Canadian manufacturers transform from the low-skill assembly model of the past. Those that survive in this new order will do so by innovating and adding engineering skill to the vast tentacles of the worldwide value chain. No longer will it be good enough just to build simple parts or devices for the local market.

via Canadian manufacturers find a niche by supplying the smarts – The Globe and Mail.

Creating value through innovation will mean we don’t have to compete on price, and sell ourselves short. We need to apply the same principles to commodities.