Virginia LogisticsResearch CenterResearch Center
Key Stakeholders andKey Stakeholders and Associates meetingg
Fort Lee, VirginiaJanuary 18, 2011
Genesis of the VLRC
• 2005 BRAC impact –Fort Lee –November 2005
• HR 487‐ July, 2007 recognized modeling and simulation as aas a national critical technology
• VLRC Feasibility Study‐May 2009
• Strategic Plan for VLRC J l 2010• Strategic Plan for VLRC –July 2010
• Strategic Plan briefing to CPDC Executive Committee –g gAugust 2010
A Strategic Plan for the VLRC gPresentation to Key Stakeholders
Recommendations for a framework for an initial Strategic Plan
Dr. Thomas W. MastaglioJanuary 18, 2011
Topics
O i d R lt f St d• Overview and Results of Study
• Recommendations
Di i• Discussion
SUMMARY
• Establish VLRC as 501(c)3 governed by Board• Potential to become unique national center for logistics research and education• Organize with participation from Industry, Academia, and GovernmentGovernment• Hire a dynamic Executive Director with industry ties, organize staff hierarchically under the Executive Director• Identify and execute near term projects to validate value to constituents• Funding for first 5 years should come from Commonwealth, local government, and stakeholders; thereafter center should be self supportingbe self supporting• Partnerships between VLRC and members and amongst the members will be key to success
Study Process1 D t S1. Data Sources
• Identified Stakeholders• Conducted interviews• Collected survey input• Collected survey input• Conducted customer focus group
2. Analyzed Data3. Applied researcher’s expertise to clarify data analysis3. Applied researcher s expertise to clarify data analysis4. Prepared report for CPDC
Results
• Strategic Framework• Operations Structure
P li d P• Policy and Processes• Staffing• Market Identification• Research• Financial Strategies• Intellectual PropertyIntellectual Property
Strategic Framework
• Center Vision: Become a premier center forCenter Vision: Become a premier center for applied logistics research leveraging best practices from all sectors to improve logistics
tioperations.• Mission
• Pursue projects for industry, government and military leveraging academic expertise• Identify key issues in logistics to leverage applied researchapplied research• Provide professionals and corporate members access to VLRC resources, f iliti d h ltfacilities and research results
Operations Structure Organize as a separate, stand alone not-for-profit entity (501(c)3)Governed by a Board of Directors
• Representation from industry, regional government, defense community and academia• Board members invested in VLRC success
• 15 members • Nominating committee with outside consulting support
E t bli h B L• Establish By-Laws, • Establish Task Forces to
• Hire Executive Director,• Coordinate financing facilities research education• Coordinate financing, facilities, research, education and industry engagement • Establish a membership structure• Develop industry and research advisory groups
Policy and Processes
• Define Standard Operating Procedures• Personnel• AccountingAccounting • Project Management and Communications• Public Relations
Facilit Management• Facility Management• Intellectual Property Management Process• Process and Policies for interaction with DoD
Staffing• Executive Director• Executive Director
• Industry Experience• Proven record in collaborative partnerships• Reports directly to BOD with high degree of autonomy
• Director of Business Development• Director of Research• Director of Education*
G t/ ilit Li i *• Government/military Liaison*• Industry Liaison*• Operations Manager• Administrative Staff• Administrative Staff
* Potential in-kind support from member organizations
Market Identification
T t M k t (V l P iti f h)• Target Markets (Value Proposition for each)• Industry (absolutely key to success)• Regional Government Agencies• Academic Institutions• Academic Institutions• DoD
• Capturing Relationships• Focused Networking: Field Forums, EconomicFocused Networking: Field Forums, Economic
Development Events, Business Groups• News and Information Dissemination• Tours and Showcase Events• Sponsored Events
Research
•Short Term Focus (2 Years)• Defense Systems Gap Analysis• Regional Impact and Options Study• Regional Impact and Options Study• Application of Existing Transportation
Impact Data to Industry Challenges
• Long Term Focus (5 Years)• Medical Transport and Distribution for p
Veterans Administration• Tracking and Response Systems for
Homeland SecurityHomeland Security
Financial Strategies
Near Term (12 Months)Public Funding
Short Term (Two Years)Grant FundingPublic Funding
- Initial Operations- Initial Research
Grant Funding- Bricks and Mortar- Technology
Strategic Term (5 Years)Private Funding
Long Term (5 Years)Project Funding
- Exploratory Research- Innovation Capacity
j g- Sustainability: Overhead- Growth Funding
Intellectual Property
- Information Rights CounselIntellectual Property Review- Intellectual Property Review Process
- Continuous Improvement Process
Facilities
- Linked with Ft Lee activities- Linked with Ft. Lee activities- Adaptable Space- Sponsored Areas in Facility
C ll b ti ki- Collaborative working areas
Recommendations
• Establish a 501(c)3 – Non Aligned Center• Appoint a proactive Board of Directors• Focus on Applied Research
E I d t A d i d• Engage Industry, Academia, and Government/Military – establish Industry and Research Advisory Groups• Identify and execute near term projects to• Identify and execute near term projects to demonstrate value• Initial Funding from Commonwealth, local government and stakeholdersgovernment, and stakeholders• Partnerships will be VLRC key to success• Establish VLRC as authoritative source for information, models, methods and research in , ,logistics
Discussion
William F Moore SESWilliam F. Moore, SESDeputy to the Commanding General
Perspectives on how VLRC d Vi i i th h A advances Virginia through Access,
Alignment, and Investment
Office of Research & InnovationBox 9212 Petersburg VA 23806
(804) 524-8989 ext 1114
1/13/2011 1
( )
O tliOutlineEconomic Impact of KTI ser ices and high Economic Impact of KTI services and high-tech manufacturingWhy a VLRC? Why a VLRC?
What is the link between KTI firms and R&D output?output?
VLRC and VA’s Strategy for R&D InvestmentSome reasonable expectations Some reasonable expectations
Results we can measure?
1/13/2011 2
Economic Impact of KTI pservices and high-tech manufacturingg
The world economy is dominated by global y y gvalue-added knowledge and technology-intensive (KTI) services and high-technology
$manufacturing. They account for nearly $16 trillion to the $54.8 trillion world economy.
- NSF Science & Engineering Indicators (2010)
1/13/2011 3
Why a VLRC?Why a VLRC? Fort Lee is the army’s knowledge
management center for high-technology t i i d t i t/ l i ti itraining and sustainment/ logistics services (representing $10.2 billion and 89,000 jobs).VLRC will provide university R&D resources VLRC will provide university R&D resources to grow KTI service industries involved in sustainment/logistics related health caresustainment/logistics related health care, third-party logistics services, and maintenance management.
1/13/2011 4
What is the link between KTI at s t e bet eefirms and R&D output?
CPD’s economic development strategy is aligned with NSF’s views on innovation as a key to competitivenessa key to competitiveness.
KTI firms rely on the results of R& D to innovate new productsinnovate new products.
R&D is a now recognized as capital investment It accounted for nearly 4 5%investment. It accounted for nearly 4.5% of real GDP between 1959-2002.
----NSF S&E Indicators 2008.NSF S&E Indicators 2008.
1/13/2011 5
VLRC and VA’s Strategy for R&D I (SCHEV)
gyR&D Investment (SCHEV) Goal 9: Improve Alignment between
Higher Education and the Commonwealth’s Workforce NeedsWorkforce Needs.
Goal 11: Enhance research through investment in Targeted Consortiainvestment in Targeted Consortia.
Goal 12: Enhance research through investment in Infrastructureinvestment in Infrastructure.
1/13/2011 6
VLRC and VA’s VLRC and VA s Strategy for R&D Investment
Develop a strategic roadmap that catalogs Develop a strategic roadmap that catalogs all R&D assets and activities, particularly those related to federally funded research yand aligns …..additional R&D investments.
Establish an emerging technologies fund g g gas a vehicle for recruiting eminent faculty, acquiring research-related equipment,
i li i i t ll t l t dcommercializing intellectual property and providing seed-stage funding.
G B b M D ll ( )--Gov. Bob McDonnell (Higher Ed Opp Act of 2011)1/13/2011 7
R bl E t tiReasonable Expectations Expected payoff should leverage Expected payoff should leverage
investment VLRC must concentrate sufficient talent VLRC must concentrate sufficient talent
to satisfy expected value propositions Sensible legislative process……..simple Sensible legislative process……..simple
majority vs. 2/3rd majority VLRC must impact baseline measures for p
economic development activity
1/13/2011 8
Results we can measureResults we can measureJo rnal P blications Journal Publications
Funding (Research Expenditures)P t t Patents
Licensing from Patents New companies spun off from patents
1/13/2011 9
Questions?
1/13/2011 10
A I d t P tiAn Industry Perspective
The First Question
What is the Value Propositionandand
the Return on my Investment?
Examples: FedEx – University of TennesseeUPS – Georgia TechUPS – Georgia TechWal-Mart – University of Arkansas
(Supply Chain Management Research Center)
Defining Industry Partners
• Manufacturing (Rolls Royce)
• Warehousing / Distribution / Transportation • (Owens & Minor)
• Government / Defense Companies (LMR)
Each with:Each with:Common challengesDifferent perspectivesVarying resources y g
Challenges:• Limited Research ResourcesLimited Research Resources• Constrained Organizations• Operational Focus• Costs/ROI Industry Input:Industry Input:
• Practitioners• Real problems• Operational Focus• Impacts of Future Business Trends
VLRC:• Shared Resources• Shared Resources• Theory to application • Venue for information and
educational exchanges
Build a Business Plan that:Build a Business Plan that:• Clearly defines the Value Proposition and ROI
S li it t l h i• Solicits actual research issues-Demonstrate the value of a Research Center
• Taps into more Industry Partnersp y-Variety of Industry Partners
• Acknowledges tiered membership -Range of organizational resources-Range of organizational resources
• Insures Intellectual Property Rights
“Improving Competitiveness i Gl b l E ”in a Global Economy”
Mission
• Provide transformational improvements in advanced manufacturing technologies
– Reduce cost
– Improve quality
– Reduce time to market
• Bridge the gap between fundamental research and commercialization
– Accelerate technology into markets
– Demonstrate technology on real problems
• Foster collaboration among diverse industry sectors– Directed Research for the exclusive proprietary benefit of an individual member
h f h b f f ll b– Generic Research for the benefit of all member companies
• Lower the cost of research and development for member companies
– Shared facilities and personnel
– Shared pre‐competitive researchShared pre competitive research
• Train the next generation of technology leaders– Provide market ready experience to students
– Connect industry with students
Vision
• A global Center of Excellence in advanced manufacturing
– Creating new technologiesg g
– Enabling new products
– Fostering collaboration across industry sectors
• A foundational component of the larger vision for an Advanced Manufacturing
Shipbuilding
Transportation
vision for an Advanced Manufacturing Innovation Zone (AMIZ) in Virginia
– Expanding research capability
– Workforce training
– Economic development engineEnergy
Economic development engine
• CCAM growth in 10 years to:– 49 full‐time resident PhD‐level research staff
members
– 35 graduate research assistants resident at
Aerospace
35 graduate research assistants resident at CCAM
– 35 undergraduate interns resident at CCAM
– More than 30 Industry Members
– Sustainable and diversified research portfolio
Electronics
Automotivepfrom industry and federal sources totaling more than $16 million per year
Automotive
Defense
Advanced Manufacturing Innovation Zone
• Academic research
• Industry partners• Applied research
UNIVERSITY OWNED UNIVERSITY OWNED & OPERATED& OPERATED
UNIVERSITY LEDUNIVERSITY LED
• Academic research • Corporate engine testing
• Magnet for supply chain
Applied research• Build sustained competitiveness across multiple industries
Commonwealth Center for Ad d T t C ll VillAdvanced
Manufacturing (CCAM)
Test Cell Village
• Flow cell laboratory• Advanced Manufacturing
Manufacturing & Engineering Career Center
Factories at Crosspointe Site
INDUSTRY OWNED INDUSTRY OWNED AND OPERATEDAND OPERATED
COMMUNITY COMMUNITY COLLEGE LEDCOLLEGE LED
• Applied research• Innovative, multi‐faceted curricula
• Operational Q1 2011• High performance computing for modeling & simulation
Governance
• Multiple levels of membership– Organizing Industry Members– Organizing University Membersg g y– Tier 1 Industry Members– Tier 2 Industry Members– Academic Members
• Board of DirectorsE t bli h ll li i– Establishes all policies
– Approves budgets– One member from each Organizing Member– Chair of Industrial Operations Board is a member
• Industrial Operations Board– Provides oversight of day‐to‐day operations– One member from each Tier 1 and Organizing Member– One member elected by Tier 2 Members– One member from each Organizing University Member
• Technical Advisory Board• Technical Advisory Board– Establishes technology roadmap– Creates research agenda– One representative from each member organization
Funding Model
Tier 2 Fees G iAll Members have non-
GenericResearch
exclusive, royalty-free license to IP from Generic Research 50%
DirectedTier 1 Fees
Tier 1 Members willDirectedResearch
Tier 1 Members will own IP generated from the Directed Research that they sponsor.
50%
OtherResearch
Federal Funding ResearchFunding
Organizing Industry Member Terms
• Commit to an annual membership fee– $400,000 per year due in January beginning in 2011
– Five year commitment
• Provide partial support of start‐up costs– Provide cash start‐up funds of $150,000p $ ,
– Contribute an in‐kind donation valued at $500,000
• Assist in recruitment of two additional members
di h O i i b l• Dedicate one person to the Organizing Member Team to plan and implement CCAM
• University Organizing Members assume financial riskUniversity Organizing Members assume financial risk– Facility owned and financed by the University of Virginia Foundation
– CCAM bridge loans (up to $500,000) provided by the Universities
– Universities participate equally in start‐up funding ($150 000 each)Universities participate equally in start‐up funding ($150,000 each)
Financial Plan
• 10‐year plan for growth– 5 Organizing Members– 5 Organizing Members– 12 Tier 1 Members in 10 years– 18 Tier 2 Members in 10 years
• Diversified revenue stream$8 5 illi i l b f
Revenues and Expenses
$
$16,000,000
$18,000,000
– $8.5 million in annual member fees– $7.2 million in annual external funding
• Generic Research support– $5.4 million annually in 10 years $8,000,000
$10,000,000
$12,000,000
$14,000,000
Total Revenue
Total Expense
Research Expense
General Expense
– Funding decisions made by members
• Directed Research support– $5.8 million annually in 10 years– Funding decision made by each member $-
$2,000,000
$4,000,000
$6,000,000
FY FY FY FY FY FY FY FY FY FY
p
Net
g y
• Federal research support– $4.5 million annually in 10 years– Contributes $1.35 million to indirect costs– Creates new technology of value to CCAM
$(2,000,000)
FY2010
FY2011
FY2012
FY2013
FY2014
FY2015
FY2016
FY2017
FY2018
FY2019
Fiscal Year
Creates new technology of value to CCAM
Research Agenda
Value Proposition
• Shared resources– Facilities
Research staff– Research staff– Research equipment
• Unique intellectual property policy– Member owned Directed Research– All members share intellectual property that is jointly funded
as Generic Researchas Generic Research• Focus on translational research
– Understanding of fundamentals– Solution of industry problems– Transfer of technology
B id i th b t h d i li ti– Bridging the gap between research and commercialization• Industry/University collaboration
– Industry directed and university executed research program– Industry / University partnerships on government projects– Access to world class universities
• Workforce training and development– Students graduate with industry relevant experience– Students work on industrial scale equipment
Current Status
• CCAM formed as a corporation
• Initial Organizing Members– Canon Virginiag
– Northrop Grumman (Shipbuilding)
– Rolls‐Royce
– Sandvik Coromant
– SiemensSiemens
– University of Virginia
– Virginia Tech
• Aerojet is the first Tier 2 member
l h d ( h l )• Initial research project underway (thermal spraying)
• Search firm engaged to hire Executive Director– Interviews in December with selection by end of January
• CCAM facility development underwayy p y– 20 acres of land transferred to UVA Foundation by Rolls‐Royce
– Perkins + Will hired as architectural and engineering firm
– Initial program plan and design for facility completed
• Member recruitment strategy and process ongoing• Member recruitment strategy and process ongoing
• Faculty hiring, lab renovations, and research underway at Universities
Key Business Plan Milestones
QTR 1 QTR 2 QTR 3 QTR 4 QTR 1 QTR 2 QTR 3 QTR 4
2010 2011
QTR 1 QTR 2QTR 1 QTR 2 QTR 3 QTR 4 QTR 1 QTR 2 QTR 3 QTR 4
OIM Marketing Tier 1 / Tier 2 Marketing
Hire
QTR 1 QTR 2
UniversityDay
AirShow
5 OIMsCommitted
Building Design Building Construction
Hire Marketing
FirmMembership
Fees Paid
u d g es g u d g Co st uct o
CCAM Groundbreaking
CCAMOpens
Begin Hire Research
Conduct Research Projects
CCAM Corporation
Created
Executive DirectorSearch
Executive Director
Roadmap Created
Business Plan
Created
Facility
52,000 ft2 two story state of the art building • Office, conference, lab, and high bay facilities • Site layout and building designed for expansion
View from Parking lot
View from northeast Interior lobby
Confidential Information ‐ Not for Distribution
Expansion Plans
Additional acreageavailableavailable
Career Center
High Bay Expansion
Career Center
Confidential Information ‐ Not for Distribution
Questions and Contacts
Barry W. JohnsonAssociate Dean
Donald J. LeoAssociate Dean
University of [email protected]
Virginia [email protected]
Next Steps
Defining the path forward…….
1/13/2011 1
N SNext Steps……. Commit to the VLRC vision and examine
the opportunity.F li th ll b ti b t Formalize the collaboration between stakeholders and associates.Commit to a Business Plan/ Innovation Commit to a Business Plan/ Innovation Strategy.Establish a Timeline Establish a Timeline.
1/13/2011 2
Commit to the vision and Commit to the vision and examine the opportunity
Leverage R&D assets and activities related to Leverage R&D assets and activities related to KTI sustainment and 3rd party logistics services.
SCoE and DLA for The Global Superpower. World-class university with capability to align World class university with capability to align
multi-university partners for innovation in KTI sustainment and 3rd party logistics services.
Industry partners at the forefront of KTI sustainment and 3rd party logistics services.
1/13/2011 3
Formalize the organizing Formalize the organizing Partnership
Sign-off on a memorandum ofSign-off on a memorandum of understanding (MOU) that:
(a) Defines shared governance(a) Defines shared governance (b) Commits start-up dollars where applicable( ) Sets timelines for pooling resources(c) Sets timelines for pooling resources
where applicable(d) Commits to recruiting/ marketing support(d) Commits to recruiting/ marketing support(e) Agrees to provide dedicated resources to
help organize VLRChelp organize VLRC
1/13/2011 4
Commit to a Business Plan/ I i SInnovation StrategyPro ide reso rces to de elop and follo aProvide resources to develop and follow aBP/ Innovation Strategy that:
Li k th i i t l itia) Links the vision to a value proposition.b) Sets a research agendac) Identifies facilitiesd) Establishes a financial plane) Establishes the Governance Structure
1/13/2011 5
A P d Ti liA Proposed Timeline Commit to the vision and examine the
opportunity………….Jan 18th 2011 Pool current R&D assets to seek federal grants
related to KTI sustainment and 3rd party logistics services Jan 18th 2011services…………….Jan 18th 2011
Develop and execute MOUs for organizing the VLRC May 2011VLRC…………………….May 2011
Approved Business Plan/ Innovation Strategy November 2011Strategy……………..November 2011
1/13/2011 6
Questions?
1/13/2011 7