TDL & Exports Regional Intermediary Design III

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Public/Private Partnership Model Recommendation Workshop Three - June 10, 2011

Public/Private Partnership Model Recommendation Workshop Three - June 10, 2011

Sponsored by

New Economy Initiative

Hosted by

Detroit Regional Chamber

and

Michigan State University

TDL & Exports Regional Intermediary

http://www.detroitchamber.com/index.php

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AcknowledgementsAcknowledgements

• MSU, DRC, WSU and all participants would like to personally thank NEI for the resources to continue with the implementation of project results

• We are encouraged by the enthusiasm of all stakeholders to contribute to and continue with this important economic development and new jobs creation project

• Thank you to NEI for your vision and support to help transform the region!


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Regional Intermediary RecommendationRegional Intermediary Recommendation

Workshop Three Desired Outcomes:

• Discuss and synthesize survey results

• Finalize Regional Intermediary characteristics to share with Intermediary Sponsors

• Discuss next steps for implementation


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Regional Intermediary RecommendationRegional Intermediary Recommendation

Workshop Guidelines:• All participants will give the meeting our full attention,

positive energy and commitment to the project• All participants will be open, candid and honest and allow

others to do the same• Respect will be the foremost goal of all participants; we will

center on issues, not personalities• All participants will center first on gaining understanding,

second on convincing others• All input raised will be captured for future use and shared

with all attendees• Think FUTURE; Think strategic; Think CAN DO !


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IntroductionsIntroductions

• Name• Role• Representing


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Workshop Three AgendaWorkshop Three Agenda

• Welcome and Introductions

• Synthesize findings from survey

• Finalize Regional Intermediary characteristics

• Planning for implementation


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Workshop Follow-Up SurveyWorkshop Follow-Up Survey

Background…

• Conducted online using surveymonkey.com

• 139 workshop attendees & invitees were asked to complete the survey

• 45 people completed the survey (32%)


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Survey Results: OrganizationSurvey Results: Organization

What organization do you represent?

0%

4%

37%

9%17%

11%

7%

15%

Community-based

Consultant

Economic development

Education

Government

Logistics service provider

Shipper

Other (please specify)


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Survey Results: Region Survey Results: Region

What region is your organization from?

4% 7%

89%

Canada

Michigan

Ohio


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Model Capabilities: Best Practices ResearchModel Capabilities: Best Practices Research


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Model Capabilities: Best Practices ResearchModel Capabilities: Best Practices Research


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Highest Priority Capabilities: DTW HubHighest Priority Capabilities: DTW Hub

Capability Category DTW Comments %Community Involvement Collab Need for better communication and outreach 24%Use of Marketing ED Need for better communication 20%

US Border Trade Corridor EDSome infrastructure and institutional barriers for US / Canada border 16%

Understanding Global Landscape EDStrong understanding of global supply chain operations 15%

Border Crossing Facilities SI / IF Capabilities there, but in need of improvements 15%

Railroad Network SI / IFUS-Canada railroads pass through Michigan; shipper access to NS and CSX through Conrail; access to U.S. East coast and Chicago 14%

Interstate Highways SI / IFNetwork of I-75, I-94, and I-69 is less congested than Chicago’s, great connectivity, but aging 14%

Identifying Strategic Corridors SCE Identified, but importance is unclear 13%Cust Service & Reliability SCE Strong position but costs and uncertainty increasing 12%Streamlined Government Collab Complex business taxes and laws 12%

Airport Capability SI / IFDTW airport capacity; frequent direct Asian flights; available capacity for dedicated and belly cargo freight 11%

Supply Chain Skilled Labor SCE Readily available labor 11%Hub Operations Cost SCE Higher cost to operate 11%

Strategic Transportation Plan CollabTransportation dollars prioritized with local considerations 10%

Leverage Business Partnership Collab Better use of resources 10%


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Survey Results: Perception of ImportanceSurvey Results: Perception of Importance

1 = not important

5 = very important

3.68

3.89

4

4.03

4.05

4.08

4.11

4.14

4.22

4.27

4.38

4.41

4.43

4.46

4.46

4.81

1 1.5 2 2.5 3 3.5 4 4.5 5

Community involvement

Supply chain solutions

Use of marketing

Hub operations cost

Supply chain skilled labor

Streamlined government

Identifying strategic corridors

Understanding the global landscape

Strategic transportation plan

Leveraging business partnerships

Airport capabilities

Railroad network

U.S. border trade corridor

Customer service and reliability

Interstate highways

Border crossing facilities


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Survey Results: Perception of Performance Survey Results: Perception of Performance

1 = lagging

3 = average

5 = above average

1.89

2.05

2.35

2.57

2.76

2.97

3.11

3.11

3.16

3.19

3.19

3.41

3.54

3.62

3.76

3.89

1 1.5 2 2.5 3 3.5 4 4.5 5

Use of marketing






Hub operations cost




Railroad network



Interstate highways




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Survey Results: Hub Capabilities – Importance and Current PerformanceSurvey Results: Hub Capabilities – Importance and Current Performance

Hub Capability Importance Performance

Border Crossing Facilities 4.81 3.41

Interstate Highways 4.46 3.62

Customer Service and Reliability 4.46 3.19

U.S. Border Trade Corridor 4.43 3.54

Railroad Network 4.41 3.19

Airport Capabilities 4.38 3.89

Leveraging Business Partnerships 4.27 2.57

Strategic Transportation Plan 4.22 2.35

1 = not important

5 = very important

1 = lagging

3 = average

5 = above average


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Survey Results: Hub Capabilities – Importance and Current PerformanceSurvey Results: Hub Capabilities – Importance and Current Performance

Hub Capability Importance Performance

Understanding the Global Landscape 4.14 3.16

Identifying Strategic Corridors 4.11 3.11

Streamlined Government 4.08 2.05

Supply Chain Skilled Labor 4.05 3.76

Hub Operations Cost 4.03 3.11

Use of Marketing 4.00 1.89

Supply Chain Solutions 3.89 2.97

Community Involvement 3.68 2.76

1 = not important

5 = very important

1 = lagging

3 = average

5 = above average


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Survey Results: Performance vs. ImportanceSurvey Results: Performance vs. Importance

4.05

4.38

4.46

4.43

3.89

4.03

3.68

4.14

4.11

4.41

4.46

4.81

4.27

4.22

4.08

4

3.76

3.89

3.62

3.54

2.97

3.11

2.76

3.16

3.11

3.19

3.19

3.41

2.57

2.35

2.05

1.89

1 1.5 2 2.5 3 3.5 4 4.5 5



Interstate highways



Hub operations cost




Railroad network






Use of marketing

Importance Performance

1 = lagging

3 = average

5 = above average

1 = not important

5 = very important


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Survey Results: Performance vs. ImportanceSurvey Results: Performance vs. Importance


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Survey Results: Implementation ObstaclesSurvey Results: Implementation Obstacles

2.81

2.92

3.03

3.22

3.64

3.69

3.89

3.92

1 1.5 2 2.5 3 3.5 4 4.5

Operating Board Structure

Value Proposition Design

Promoting Hub Capabilities

Competitive Hubs

Global Perception of Region

Regional Collaboration

Funding for Infrastructure

Cultural Mindset

1 = minor challenge

5 = major challenge


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Survey Results: Hub Growth PerceptionSurvey Results: Hub Growth Perception

Building on our supply chain capabilities, how realistic is it to succeed as a hub?

0%

0%

17%

44%

39%

1 - Not Realistic

2

3

4

5 - Very Realistic

Question wording: “Assuming we overcome these obstacles, how realistic do you think it is that this region, building on its current supply chain capabilities, will grow in success as a recognized supply chain hub?”


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Survey Results: Hub Buy-InSurvey Results: Hub Buy-In

How much do you support or "buy in" to the initiative to create a regional supply chain hub?

0%

0%

17%

23%60%

1 - Indifferent to Hub

2

3

4

5 - Strongly Committed


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Survey Results:Strengths to EmphasizeSurvey Results:Strengths to Emphasize

• Airport• Supply chain skilled labor• Interstate highways• International trade corridor• Border crossing facilities• Railroad network• Understand global landscape• Identifying strategic corridors• Hub operations cost


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Survey Take Aways:Largest Gaps in PerformanceSurvey Take Aways:Largest Gaps in Performance

• Highest priority capabilities with the largest gaps in performance include:– Use of marketing– Streamlined government– Strategic transportation plan– Leveraging business partnerships– Community involvement


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Survey Take Aways:Major Obstacles to ImplementationSurvey Take Aways:Major Obstacles to Implementation

• Major obstacles to implementation include:– Cultural mindset– Infrastructure funding– Regional collaboration– Global perception of region


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Survey Take AwaysSurvey Take Aways

• Local initiatives to close the gap in capability performance and overcome obstacles:– Local marketing and community outreach– Streamlined government and regional collaboration– Pilot implementation focused on improving the leveraging of

business partnerships

• Multi-state and multi-nation collaboration initiatives to close the gap in capability performance and overcome obstacles:– Create multi-state and multi-nation collaboration board – Create multi-state and multi-nation strategic supply chain

asset, infrastructure, and transportation plan– Create global branding, marketing and communication plan


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Initiatives + Strengths = SuccessInitiatives + Strengths = Success

Gaps

Obstacles


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Gaps

Obstacles

Local Initiatives• Marketing and

outreach• Regional collaboration• Implement pilots

Multi-national and multi-state initiatives• Collaborative board• Strategic asset plan• Global marketing


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Gaps

Obstacles




Key Strengths• Airport• Supply chain skilled

labor• Interstate highways• International trade

corridor• Border crossing

facilities• Railroad network• Understand global

landscape• Identifying strategic

corridors• Hub operations cost


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$ & JOBS

Gaps

Obstacles











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Survey Synthesize Survey Synthesize

How would you synthesize the results of the survey?


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• Welcome and Introductions• Synthesize findings from survey• Finalize Regional Intermediary

characteristics– Vision – Capabilities and key strengths– Targeted industries– Performance metrics– Structure of operating board– Critical success factors



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Rationale for our Regional Intermediary Model RecommendationRationale for our Regional Intermediary Model Recommendation

• The Regional Intermediary recommendation is not an exact model, but rather identifies key characteristics offered by several models

• The Regional Intermediary recommendation relies on a hybrid model approach similar to the Public/Private Partnership Model

• The Regional Intermediary recommendation will not be implemented from scratch, but should leverage existing organizations as feasible


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Organizational Model Recommendation: Public / Private Partnership ModelOrganizational Model Recommendation: Public / Private Partnership Model

• Provide public sector advantages of good Infrastructure and support capabilities

• Provide public sector advantages of availability of very good human, land, supplier, and financial capital

• Provide private sector value propositions which offer economic competitiveness and lowest total cost to serve

• Provide private sector the advantage of serving global markets


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Public / Private Partnership Model: Vision Public / Private Partnership Model: Vision

• World class cross-border distribution hub – Air freight to motor freight – Rail freight to motor freight– Value added services

• Lowest overall cost to serve for industry partners• Superior customer service for industry partners

and their respective customers• State of the art supply chain technology• Excellent management and labor talent • Win-win-win relationships with industry partners,

service providers, and supply chain hub


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The Bottom Line !The Bottom Line !

• Opportunity Assessment has re-enforced the economic development potential for the Hub– 66,000 new jobs created– Doing nothing may run the risk of additional jobs lost

• Maintaining momentum over the next few months will be critical to project success

• Each of us will play a key role to assure 66,000 new jobs are created…..starting today !


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Public / Private Partnership Model: CapabilitiesPublic / Private Partnership Model: Capabilities

• Supply Chain Expertise– Economic competitiveness and lowest supply chain

cost to serve– Supply chain sustainability– Infrastructure / modal support

• Economic Development– Competitive tax environment– Ability to serve global markets– Develop supply chain solutions

• Strategic Infrastructure / Intermediary Funding– Infrastructure support and capabilities

• Collaboration– Joint commission or authority– Strategic alliances


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Public/Private Partnership Model: Strengths and Unique OfferingsPublic/Private Partnership Model: Strengths and Unique Offerings

• Cross-border distribution hub and NAFTA thoroughfare away from congestion of Chicago-Toronto

• Trans-loading heavy imports from Canadian ports to U.S. using railroads

• Good airport, highway, and rail infrastructure with limited congestion and very good reliability

• Skilled Export, TDL management and supply chain labor talent is readily available

• Economical outbound motor carrier capacity• Availability and affordable land

Unique Offerings of Our Public/Private Model:• Provide supply chain value propositions to attract companies• Commitment from State of Michigan to make this happen


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Summary of Key Strengths for Public/Private Partnership ModelSummary of Key Strengths for Public/Private Partnership Model

• Multi-state and multi-country• Public provide infrastructure; private run it• Existing base of excellent service providers• Implement the infrastructure, talent, and

geographic potential that currently exists


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Public/Private Partnership Model: Targeted Industries Public/Private Partnership Model: Targeted Industries

• Heavy Manufacturing– Automotive renewal– Alternative energy– Carbon fiber manufacturing– Chemical processing– Defense– Electronics – industrial

• Light Manufacturing– Food processing– Medical technologies– Water technologies

• Distribution– Beverage and alcohol distribution– Retail importing and value add– Waste management


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Summary of Enhanced Economic Activity by Industry ClusterSummary of Enhanced Economic Activity by Industry Cluster

Industry Cluster Increase in Economic

Development

Number of New Jobs Created

Heavy Manufacturing $5 Billion 41,200 New Jobs

Light Manufacturing and Distribution

$5.5 Billion 25,500 New Jobs

TOTAL Over $10 Billion Over 66,000 New Jobs


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Public/Private Partnership Model:Proposed MetricsPublic/Private Partnership Model:Proposed Metrics

• Number of new jobs created by industry (Both Direct & Indirect jobs)

• Economic activity benefits by industry (Dollars)• The number of new businesses attracted• Business retention rate (New and Existing)• Investment amounts with ratio: Public vs.

Private• Inbound/Outbound shipments (Volume and

Value)


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Public/Private Partnership Model:Proposed Board StructurePublic/Private Partnership Model:Proposed Board Structure

• Board representation from Canada, OH and MI• Leadership from both public and private sectors• Need private sector champion to take ownership,

overcome obstacles and drive change• Small executive board supported by appropriate

advisory boards and committees• Create multigenerational commitment

(regardless of current administration in office)• Seek foundations and venture capital support


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Public/Private Partnership Model:Critical Success FactorsPublic/Private Partnership Model:Critical Success Factors

• Public sector funding• Integrated Regional and Statewide asset strategy• Commitment from a major logistics provider or

shipper as a catalyst to Economic Development• Economic Development driven by aggressive lead

management approach across all stakeholders to attract shippers and carriers

• Available physical capacity (Land, Facilities, People) to support growth

• Hub supply chain competitive advantages


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Regional Intermediary: DiscussionRegional Intermediary: Discussion

What suggested changes or extensions are needed to enhance our Public/Private Partnership Model characteristics?– Vision – Capabilities and Strengths– Targeted Industries– Performance Metrics– Structure of Operating Board– Critical Success Factors


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Local Initiatives and Multi-National and Multi-State Initiatives are Keys to SuccessLocal Initiatives and Multi-National and Multi-State Initiatives are Keys to Success

$ & JOBS

Gaps

Obstacles


outreach• Regional

collaboration• Implement pilots









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Local Initiatives and Multi-National and Multi-State Initiatives are Keys to SuccessLocal Initiatives and Multi-National and Multi-State Initiatives are Keys to Success

What suggestions or candidates do you recommend for the proposed Regional Intermediary (Local) organizational model?

What suggestions or candidates do you recommend for the proposed Multi-Nation and Multi-State organizational model?


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• Welcome and Introductions

• Synthesize findings from survey

• Finalize Regional Intermediary characteristics



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Implementation PlanningImplementation Planning

• Regional Intermediary design recommendation– Intermediary Design Workshop One: March 11– Intermediary Workshop Two: April 29– Implementation Workshop Three: June 10

• Piloting the implementation approach with partners– April 1 Symposium– Joint Workshop with MEDC: TBA– Launch pilots with interested industry partners

• Education, sharing of findings, and communications– Workshop Sessions with Ohio and Canada– Community Outreach meetings/workshops– Global Trade and Transportation: Next Steps


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Implementation PlanningImplementation Planning

• Regional Intermediary focus to assure multi-state and multi-nation collaboration:– Secure executive sponsorship from all jurisdictions– Create a common board for regional collaboration– Develop global branding, marketing and communication plan– Creation of a regional strategic supply chain asset,

infrastructure, and transportation plan

• Design SCM assets framework to complement supply chain strategy and future growth– Assure SCM assets enable pilots and industry growth– Design SCM assets framework to eliminate redundancy

across assets while enabling future growth


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Regional Intermediary ImplementationRegional Intermediary Implementation

Regional Intermediary Implementation:

Proposal for Fourth Quarter, 2011 Symposium

Sponsored by NEI, Michigan State University,

Detroit Regional Chamber, and MEDC

Symposium topics:• Commitment statements from executive sponsors representing

Canada, OH, MI and MEDC• Roll-out global branding, marketing and communication plan• Testimonies regarding pilot company implementation progress• Forum to engage region in the TDL and Exports discussions


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Regional Intermediary ImplementationRegional Intermediary Implementation

Workshop Participant Feedback:

What can you do, either individually or collectively, to help our efforts succeed?


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