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When the Covid-19 pandemic hit, it triggered a dramatically increased appetite for the environmentally friendly cleaning products that make up the core line of London, Ont.-based manufacturer Environize. “Not only did we experience higher demand from our existing clients, who were suddenly more concerned than ever about maintaining cleanliness,” says the company’s president, James Kitchen. “But we had a 500 per cent rise in new clients. People who just didn’t care before about cleaning and disinfecting now really cared. We picked up a lot of new business.”

Many companies would have struggled to meet the demand – particularly as supply chain disruptions became an everyday occurrence in the wake of border hassles and plant shutdowns. But, unlike many of its competitors, Environize has a hyper-local supply chain – at least for its core product. “I would say everything we use to make our product on a daily basis comes from no further than 150 kilometers away,”  Kitchen says.

EnvironNize cleaning products. Photo courtesy of Ontario Made.

As a result, Environize was able to triple production to meet demand. It even opened a new facility in Quebec to be closer to the burgeoning market there. “We can be agile and nimble based on market conditions,” Kitchen says. “If I chose an overseas supplier, I wouldn’t have that flexibility.”

Environize was one of the lucky ones. A 2022 survey by Canadian Manufacturers & Exporters (CME) reported nine in 10 Canadian manufacturing companies were still grappling with supply chain issues in the wake of the pandemic. And more than half said the disruptions were having a major or severe effect on operations, causing them to increase prices, delay customer orders, seek out alternative suppliers and increase inventory, among other things.

Even worse, the trend isn’t likely to die with Covid. As KPMG pointed out in a 2023 report, “Years of supply chain disruption and variability in customer demand have led to a feeling of permanent crisis for many organizations. Many supply chain leaders don’t believe the rollercoaster will stop anytime soon.”

Small wonder supply chain resilience has become of primary concern for many Canadian manufacturers in recent years. CME’s report found that most of the 890 companies surveyed had employed a variety of strategies to mitigate supply chain disruptions, from increasing their inventory of critical components and natural resources (74 per cent) to dual sourcing (46 per cent), nearshoring (23 per cent) and regionalizing the supply chain (19 per cent).

Joshua Lines, founder and CEO of Sarnia, Ont.-based hot sauce maker Top Shelf Canada, was one of them. When the pandemic hit, he suddenly found some of the ingredients that give his premium hot sauce its unique flavour difficult to find. And even if Lines could manage to source them, he was paying much more for the products. “We saw our margins shrink from about 50 per cent to 30 per cent,” he says. “And we had to raise our prices.”

That was a wakeup call for the company. “We had always tried to buy local when we could,” Lines says. “But we actually went through a product reformulation after Covid.” The goal: to ensure that suppliers were almost entirely local, or at least North America-based.

For example, the company’s signature hot sauce – Front Street Heat – had always been sweetened with honey. “We switched to maple syrup as a sweetener,” says Lines. “Not only is it great from a marketing standpoint because it’s Canadian and it makes us completely vegan, but our supplier, Jakeman’s Maple Syrup, is just down the road in Tillsonburg.”

As for the roasted red peppers that make up the base of the sauce, “we’re in the middle of a couple of proposed projects right now that would allow us to roast our own red peppers,” says Lines. “We would like to create a supply in this country for ourselves and for other manufacturers.”

Not every Ontario manufacturer can source entirely locally. Some raw materials or components simply aren’t made here, while others might be available, but prohibitively expensive. But the trend toward rethinking supply chains with resiliency in mind is one that Dennis Darby, president and CEO of Canadian Manufacturers & Exporters (CME), sees among many Canadian manufacturers.

In order to facilitate those local connections, in July 2020 CME, in partnership with the government of Ontario, created a new program and site, Ontario Made, which aims to “help consumers and businesses easily identify, access and purchase local products,” Darby says. The site offers free listings to Ontario manufacturers to raise awareness of locally made goods.

“Ontarians have always been interested in supporting their neighbours and buying local goods,” explains Darby. “But the global rise in protectionism and COVID-19 have accelerated this need and awareness. The Ontario Made program enables Ontario manufacturers to increase their local market sales, meet consumers’ needs, and help grow the economy which feeds money back into services all Canadians rely on, such as schools, roads, and health care.”

Although the program has many B2C companies actively participating, James White, president and CEO of equipment manufacturer Wellmaster, says it has strong potential to support B2B and B2G business development as well. “It is moving in that direction and must continue to do so with the support of the stakeholders that support and operate Ontario Made,” he says.

White notes that two of the specialty products and raw materials Wellmaster needs for its own operations are simply not produced in Ontario or even in Canada, “so we can’t source them locally.”  But, “when we can, we use local supply chains for parts, components and other services and products,” he says. “There are a lot of advantages to that.”

Even if material and component costs are slightly higher than for off-shore suppliers, points out White, the impact may be counter-balanced by other factors, such as cost reductions for transportation, reduced lead times and stronger relationships with suppliers.

Because White’s company runs its own small car fleet as well as a commercial heavy truck vehicle fleet, for example, “often we can provide our own transportation from local suppliers.” And the shorter distances translate to reduced carbon emissions, a factor that Wellmaster has been trying to track and improve.

When things go wrong, adds Environize’s Kitchen, they can more easily be rectified when you’re dealing with local suppliers. “Mistakes get made,” he says. “Labels get misprinted or bottles have imperfections. When your suppliers and your shippers are local those problems can be resolved quickly and you can make it right with the customer.”

Another advantage, says White: Time frames for innovation are shorter when you work with nearby partners because you don’t have to build in long lead times for shipping, you can more easily consult on changes, you can keep inventory levels low and you can generally buy in smaller quantities. “That allows us to quickly do things like proof of concept or iterations, as we make our way toward a finished end product,” he says. As a side benefit, because of the integrated nature of the business, suppliers can sometimes become customers as well, generating true partnerships.

Wellmaster was one of the first companies to sign up for the Ontario Made program, and White says it has an important role to play in promoting a healthy manufacturing ecosystem in Ontario. “I think government and consumer understanding of the importance of Ontario-based manufacturing has changed since the pandemic,” he says. When it comes to guaranteeing health and safety, or security of  water, energy, food or basic infrastructure, “if we don’t have the capacity to make it here, we won’t have it when we when we need it most during an emergency,” he says.

SMEs like Wellmaster can offer a supply chain hedge for larger companies in Ontario, he says. Even if they use overseas suppliers to meet their core needs, they might want “the security of having at least a portion of their production be supplied locally to ensure they can meet their delivery timeframes.”

And ultimately, White contends, the partnerships forged between Ontario companies strengthen the whole manufacturing industry by allowing them to form peer groups and share information and best practices.

Darby concurs. “There has never been a better time to support our local communities by consciously choosing to purchase Ontario-made goods,” he sums up. “When Ontarians see the Ontario Made logo, there is an assurance of quality, and they can be confident knowing they are supporting local jobs and the provincial economy.”

Explore how your business can become a part of a thriving community of more than 3,500 manufacturers, enhancing both your supply chains and brand recognition, at SupportOntarioMade.ca.