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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
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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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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
Streamlined government
Strategic transportation plan
Leveraging business partnerships
Community involvement
Supply chain solutions
Hub operations cost
Identifying strategic corridors
Understanding the global landscape
Customer service and reliability
Railroad network
Border crossing facilities
U.S. border trade corridor
Interstate highways
Supply chain skilled labor
Airport capabilities
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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
Supply chain skilled labor
Airport capabilities
Interstate highways
U.S. border trade corridor
Supply chain solutions
Hub operations cost
Community involvement
Understanding the global landscape
Identifying strategic corridors
Railroad network
Customer service and reliability
Border crossing facilities
Leveraging business partnerships
Strategic transportation plan
Streamlined government
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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Initiatives + Strengths = SuccessInitiatives + Strengths = Success
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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Initiatives + Strengths = SuccessInitiatives + Strengths = Success
Gaps
Obstacles
Local Initiatives• Marketing and
outreach• Regional collaboration• Implement pilots
Multi-national and multi-state initiatives• Collaborative board• Strategic asset plan• Global marketing
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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Initiatives + Strengths = SuccessInitiatives + Strengths = Success
$ & JOBS
Gaps
Obstacles
Local Initiatives• Marketing and
outreach• Regional collaboration• Implement pilots
Multi-national and multi-state initiatives• Collaborative board• Strategic asset plan• Global marketing
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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Survey Synthesize Survey Synthesize
How would you synthesize the results of the survey?
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Workshop Three AgendaWorkshop Three Agenda
• 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
• Planning for implementation
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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
Local Initiatives• Marketing and
outreach• Regional
collaboration• Implement pilots
Multi-national and multi-state initiatives• Collaborative board• Strategic asset plan• Global marketing
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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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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Workshop Three AgendaWorkshop Three Agenda
• Welcome and Introductions
• Synthesize findings from survey
• Finalize Regional Intermediary characteristics
• Planning for implementation
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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?