Build Now, Pay Later

$3.7 BIL­LION That's the es­ti­mated share of the $71.5 bil­lion in con­struc­tion costs for projects un­der way in this province that are as­so­ci­ated with late pay­ment, ac­cord­ing to the B.C. Con­struc­tion As­so­ci­a­tion ( BCCA). As April brings the province's first

BC Business Magazine - - Tmı - By Melissa Edwards

Chan, di­rec­tor of prod­uct com­mer­cial­iza­tion and qual­ity. “To be first with in­no­va­tion, we need a play­ground close to home where our teams can ob­serve and re­spond quickly to evolv­ing re­sults.”

Dave Lane and Jeremy Guard founded Arc'teryx in 1989. They launched the busi­ness with the first lam­i­nated climbing har­ness, whose 3D foam made it more com­fort­able than tra­di­tional stitched ver­sions. Arc'teryx de­sign­ers went on to in­vent the wa­ter­proof zip­per. To shave weight, they cut wa­ter­proof­ing tape in half. When they couldn't find a ma­chine to form knee pads, they tin­kered their own. The com­pany has also in­no­vated with style, go­ing for a clean, min­i­mal­ist aes­thetic. Ded­i­cated teams in its de­sign depart­ment fo­cus on colour and pat­tern­mak­ing.

Arc'teryx prod­ucts are usu­ally the most ex­pen­sive in their cat­e­gory, but they still sell. “Arc'teryx is not dis­tracted,” says Doug Sch­nitzs­pahn, the Colorado-based ed­i­tor of Out­door Re­tailer mag­a­zine, which cov­ers the ad­ven­ture sports gear in­dus­try. “They sur­vive at a high price point by be­ing dis­ci­plined with what they do and with the qual­ity of the prod­ucts they of­fer.”

Now a pri­vately owned sub­sidiary of Fin­nish con­glom­er­ate Amer Sports Corp., which bought it in 2005, Arc'teryx doesn't share fi­nan­cial data. But in 2014 the com­pany told ski pub­li­ca­tion Pow­der mag­a­zine that it was ap­proach­ing US$300 mil­lion in an­nual sales. Arc'teryx has since in­creased its head of­fice and de­sign cen­tre head count by a third, from 325 to 473, and man­u­fac­tur­ing and ware­house staff by even more, from 250 to 480.

As the com­pany grew, it ex­panded from do­mes­tic man­u­fac­tur­ing to more than 20 part­ner fac­to­ries world­wide, in coun­tries from China and Viet­nam to Bangladesh and El Sal­vador. But Arc'teryx has con­sis­tently kept 10 per­cent of pro­duc­tion in the Lower Main­land, mainly safety items such as an avalanche airbag pack and climbing har­nesses, new and emerg­ing prod­ucts, and the Al­pha SV jacket.

“[A lo­cal fac­tory] pro­vides a safe place to ex­per­i­ment,” Chan says. “We tend to keep our big­ger chal­lenges at Arc'one, where we're bet­ter able to mon­i­tor, guide pro­duc­tion and then lever­age the ex­pe­ri­ence to our over­seas fa­cil­i­ties.”

Do­mes­tic man­u­fac­tur­ing also lets com­pa­nies like Arc'teryx re­main nim­ble, says Mar­cus Ew­ert-johns, pres­i­dent and CEO of the BC Al­liance for Man­u­fac­tur­ing, an ad­vo­cacy group. “Chi­nese fac­to­ries only want mas­sive or­ders,” he ex­plains. “If you only want to make a few hun­dred of some­thing, roll out a

A STITCH IN TIME

In a Fe­bru­ary re­port to the pro­vin­cial gov­ern­ment, the BC Al­liance for Man­u­fac­tur­ing es­ti­mated that the province's man­u­fac­tur­ing sec­tor must hire 4,765 em­ploy­ees by 2025. The oc­cu­pa­tion with the most va­can­cies: in­dus­trial sew­ers. new model at the last minute or fill a new or­der, you can do that quickly here. It's closer to your main customer base in the U.S.”

It also pro­tects com­pet­i­tive ad­van­tage. “If you take in­no­va­tion to a Chi­nese fac­tory, it will be copied,” Ew­ert-johns says. Made-in-canada prod­ucts have a lux­ury ca­chet, es­pe­cially in Asia, he adds: “It's why com­pa­nies like Canada Goose main­tain their Cana­dian pro­duc­tion.”

The chal­lenge is find­ing the tal­ent to keep op­er­a­tions in Van­cou­ver hum­ming. In a re­cent study, Ew­ert-johns found that the B.C. ap­parel in­dus­try needed 438 sew­ers in 2016, a num­ber he projects will climb to more than 1,500 by 2025.

Arc'teryx runs a full-time train­ing mod­ule at Arc'one be­cause skilled work­ers are im­pos­si­ble to find. “The ap­parel in­dus­try in Van­cou­ver has tra­di­tion­ally been built on the flow of im­mi­grants, and the flow is not there,” Chan says. That's why there are no plans to bring more pro­duc­tion to Arc'one. In­stead, the fa­cil­ity helps Arc'teryx fo­cus on in­dus­trylead­ing de­sign.

“We make a lot of cool stuff in B.C. be­cause we have to,” Ew­ert-johns says. “You have to be find a cool niche, and you have do it re­ally well. In the eyes of the buyer, you have to be the best. That's some­thing Arc'teryx has fig­ured out.”

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