Adding Value for Clients through Innovation, Quality and Continuous Improvement
Cogent Power, Inc. designs and produces materials and components for transformers, generators, and motors. The company is the largest manufacturer of electro-transformer components in all of Canada and emphasizes quality, safety, and innovation. It uses lean manufacturing and continuous improvement principles to enhance its products and processes.
Much is the same at Cogent Power, Inc. since Business in Focus profiled the manufacturer in June 2016. Cogent Power continues to offer “the same general product mix we’ve been supplying for a long time,” states Cogent Power President Ron Harper. “We still focus primarily on products and materials that go into power and distribution transformers.” On the other hand, vast changes have taken place in some of the sectors that the Burlington, Ontario-based company serves.
When last profiled, Cogent Power had 330 employees, and that figure has not changed. When it does hire new staff, the company seeks specific qualities.
“We’re looking for someone who is open and a good communicator, somebody who can jump in and isn’t afraid to ask questions or share their ideas and opinions. We’re looking for somebody that’s a good teammate, who cares about their fellow workers. Somebody who really wants to build and maintain a highly engaged workforce. Somebody who is a good problem solver and somebody [who recognizes] the importance of product quality and good service to clients.”
Staff numbers have remained fairly “stable for the last couple of years. It’s a different mix of products, but in terms of total employment, it’s roughly the same,” says Harper.
Recent political developments, however, have made a huge difference in the way the company operates. “The biggest single change in the last 2.5 years is the business environment around our products in terms of competitive challenges, particularly U.S. tariffs. Because we’re selling steel products into the U.S., the current trade situation with the U.S. and Canada has created complications. The overall steel product environment and materials environment has become much more competitive,” he says.
Over the past two years, the United States and Canadian governments have both imposed tariffs on steel imports and other products amidst trade tensions. For all the difficulties this trade dispute might pose, Harper is optimistic. In his view, tariffs and other issues “precipitate new ways of finding solutions.”
Demands for greater efficiency have encouraged the company to look at “new designs and materials,” he says. “The strategy for us is to continue to find ways to add value for our clients within a more volatile external environment.”
For example, “Since 2016, we’ve put into place a new venture around high-performance motors and motor products. We’re working with global and North American businesses on applications that [aim to make] a traditional motor much more efficient or higher performance,” says Harper. “There’s a lot of applications that are being electrified too, and we’re working on projects to improve their performance.”
Emphasizing lean manufacturing and continuous improvement principles have served Cogent well in the past and continue to guide the company. “Lean is a cultural management system that requires a lot of maintenance and support. But it’s a big part of our philosophy and approach to the work we’re doing inside the company and with our suppliers and clients,” he explains.
The company works to optimize its supply chain and make customer relations as smooth as possible. It uses a computerized inventory management and production system to streamline operations.
“Most of our products are made to order, and we work really closely with our customers on the turnaround time of our products – shortening the cycle time from order to delivery. In a number of cases, we have direct links to client’s systems so we can anticipate their demands and not just wait for a purchase order. [This setup] helps our responsiveness and allows us to do a better job in terms of delivering parts to our clients,” says Harper.
Encouraging innovation is also central to Cogent’s mission and ties in with the focus on continuous improvement. “Innovation is really just finding a better way to do something,” he states. “Even if there is a mistake made or a failure, that’s okay. As long as we learn from those mistakes, we’re a better business for that.”
As well as looking at ways to improve its internal processes, Cogent tries to “identify problems or opportunities with clients and find an innovative solution to help them,” he adds.
The lean approach extends into other areas, such as energy efficiency and sustainability. “A big part of our business value system and vision is to help create sustainable solutions for electrical energy. That’s really the focus of a lot of our product development and promotion. We’re continuing to increase the number of higher efficiency materials and product solutions we have,” says Harper. “We also look at internal processes and work to identify opportunities for improved energy efficiency in what we do each day through our production processes.”
“One of the key philosophies around lean, as it relates to building in quality, is to focus on the quality of the inputs coming into your process. For us, that would be the quality of raw materials, people, machinery, and processes we have. [If you] manage those inputs in an effective way, you build in quality through your processes. If you’re focusing your quality assurance system on output and inspections, your costs are going to be a lot higher. We really focus our energies on the input side and work very hard with our suppliers and our process and manufacturing systems to make sure we’re managing our inputs effectively,” he states.
When it comes to quality, Cogent Power has ISO: 9001 certifications and utilizes lean manufacturing concepts to ensure that standards are maintained, he says.
Of course, quality is never sacrificed for safety, and Cogent is proud of its safety programs and record. “Ours can be a very challenging safety environment because we handle thin-gauge electrical steels. If you mishandle them, it’s easy to cut your fingers. Most of our injuries are related to handling our product or material or tooling handling. We work very hard on a couple of things. One is maintaining a level of hazard awareness, minute-by-minute and day-to-day to make sure that people are constantly aware of the hazards they are around,” says Harper.
The company routinely conducts safety tours, in which staff, “identify and talk to people about safety and safety problems and needs for improvement,” he continues. Cogent Power has a process in which safety observations are regularly made and logged.
Difficulties, in addition to the aforementioned tariff issue, include “the overcapacity globally of the steel markets,” particularly in Asia, says Harper. However, Cogent Power intends to remain a major player in its market going forward. It plans to introduce new services and offerings, with an eye towards doing value-added work for clients. As part of this, the firm is looking to enhance its rapid prototyping segment.
“Many of our clients have very little time or the capability to work on proactive whole solutions and cost-improvement projects. One thing we’ve done on the motor side is to try to build a prototyping capability to work on different solutions,” he explains.
The company’s “best advertising,” he says, comes from these face-to-face encounters with clients and good word-of-mouth referrals, “complemented by print advertising, social media. That kind of thing.”
With sister companies in the United Kingdom and Sweden, Cogent Power is part of a larger corporate group owned by Tata Steel Europe, which in turn is ultimately owned by Tata Sons of India. Last year, Tata Steel and ThyssenKrupp of Germany agreed to a deal that would see the companies merge European steel activities.
Harper is waiting to see how this merger might affect operations back in Burlington. “It’s a fairly significant merger. I suspect it will finish up in the next month or so,” he says.
While the future depends to an extent on how the European merger discussions with Cogent’s parent company go, Harper sees the firm getting stronger and better over the next few years. “We’re in the middle of a corporate reorganization with the merger I talked about. We have to get through that onto the other side to see if our new shareholders have any different ideas. But I think, ultimately, five years from now, our platform will move along the lines I’ve been talking about, adding to and building our capability to provide better product and service solutions to our clients and continuing to grow with those who see that as valuable,” he says.