1. TDL & Exports Regional Intermediary Design Workshop OneMarch 11, 2011 Sponsored by New Economy Initiative Hosted by Detroit Regional Chamber and Michigan State University

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

5. TDL & Exports Regional Intermediary Design 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 !

6. Introductions Name Role Representing

7. TDL & Exports Regional Intermediary Design Workshop Desired Outcomes: Assess and Prioritize Regional Hub Capabilities Evaluate Regional Hub Organizational and Governance Models Agree on next steps to assure project implementation succeeds

8. Agenda Welcome Introductions Hub Implementation Status Best Practices Hub Research Regional Intermediary Capabilities: Breakout 1 Discussion Report out Organizational Models: Breakout 2 Discussion Report out Planning for next project steps

9. Regional Economic Opportunity

10. SE MI: A Connected Region and Economy Highway and Rail Corridors Map: Courtesy of Gallis and Associates

11. Cities with SCM Capabilities

12. TDL and Exports Strategy: Future 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

13. TDL and Exports Strategy: SE MI Advantages Cross-border distribution hub away from congestion of Chicago-Toronto Trans-loading heavy imports from ocean ports with less congestion to U.S. using railroads Good airport, highway, and rail infrastructure with limited congestion Skilled Export and TDL management and labor talent is readily available Economical outbound motor carrier capacity

14. 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 !

15. Three Stages of SCM Economic Activity Stage 1 (Current) Economic activity associated with SCM Stage 2 (+3 years) Economic activity associated with SCM following recovery Stage 3 (+7 to10 years) Enhanced economic activity associated with SCM scale and industry attraction

16. What Does it Take to Go from Stage 2 to Stage 3? Stage 1 (Current) Economic activity associated with SCM Stage 2 (+3 years) Economic activity associated with SCM following recovery Stage 3 (+7 to10 years) Enhanced economic activity associated with SCM scale and industry attraction

17. Target Industries: Cluster Descriptors HEAVY: Heavy Manufacturing and industrial cluster attracted to hub for resource efficiency and differentiation Automotive renewal Alternative energy Carbon fiber manufacturing Chemical processing Defense Electronics – industrial LIGHT: Light Manufacturing and industrial cluster attracted to hub for resource efficiency and differentiation Food processing Medical technologies Water technologies DISTRIBUTION: Warehousing and consumer based industry attracted to hub market location for distribution and value added services Beverage and alcohol distribution Retail importing and value add Waste management

18. Economic Evaluation: Heavy Manufacturing

19. SCM Industry Activity – Heavy Manufacturing $26,324M (23.8% increase) Jobs 213,300 (23.4% increase) $ ? Jobs ? $ 21,250M Jobs 172,100 Stage 1 (Current) Economic activity associated with SCM Stage 2 (+3 years) Economic activity associated with SCM following recovery Stage 3 (+7 to10 years) Enhanced economic activity associated with SCM scale and industry attraction

20. Economic Evaluation: Light Manufacturing, Distribution

21. SCM Industry Activity – Light Manufacturing/Distribution $ 31,750 M (22.8% increase) Jobs 169,500 (17.7% increase) $ ? Jobs ? $ 25,851 M Jobs 144,000 Stage 1 (Current) Economic activity associated with SCM Stage 2 (+3 years) Economic activity associated with SCM following recovery Stage 3 (+7 to10 years) Enhanced economic activity associated with SCM scale and industry attraction

22. Total SCM Industry Economic Activity $ 58,074 M (23.3% increase) Jobs 382,800 (20.8% increase) $ ? Jobs ? $ 47,101 M Jobs 316,100 Stage 1 (Current) Economic activity associated with SCM Stage 3 (+7 to10 years) Enhanced economic activity associated with SCM scale and industry attraction Stage 2 (+3 years) Economic activity associated with SCM following recovery

23. Summary of Enhanced Economic Activity

24. Supply Chain Opportunity Assessment:Implementation of Findings – Work Activities Piloting the Implementation Approach Education, Sharing of Findings, and Communications Recommendation of Organization Model and Intermediary Recommendations for Long Term Sustainability Model

25. Supply Chain Opportunity Assessment:Implementation of Findings – Work Activities Piloting the Implementation Approach Select a company in a chosen industry to serve as the pilot for supply chain strategy implementation Identify key public and private stakeholders critical for project design and implementation Pilot the strategy implementation by designing and implementing a supply chain solution for the chosen company Pilot the implementation of policies to assure pilot success

26. Supply Chain Opportunity Assessment:Implementation of Findings – Work Activities Piloting the Implementation Approach Education, Sharing of Findings, and Communications Share findings with appropriate organizations Conduct implementation workshops for interested and impacted stakeholders Develop program for ongoing communications

27. Supply Chain Opportunity Assessment:Implementation of Findings – Work Activities Piloting the Implementation Approach Education, Sharing of Findings, and Communications Recommendation of Organization Model and Intermediary Review examples of successful multi-jurisdiction, multi-state, and multi-nation organizational models Identify leader organization and governance to implement supply chain strategy Recommend Intermediary and Champion to pursue implementation Ensure capabilities of supply chain expertise, economic development, collaboration and grantsmanship are embedded within the intermediary

28. Supply Chain Opportunity Assessment:Implementation of Findings – Work Activities Piloting the Implementation Approach Education, Sharing of Findings, and Communications Recommendation of Organization Model and Intermediary Recommendations for Long Term Sustainability Model Determine appropriate organizational and staffing model to assure long term implementation success Implement economic development policies based on lessons learned from the pilot Develop long term sustainability model for ongoing operations of intermediary

29. Agenda Welcome Introductions Hub Implementation Status Best Practices Hub Research Regional Intermediary Capabilities: Breakout 1 Discussion Report out Organizational Models: Breakout 2 Discussion Report out Planning for next project steps

30. TDL and Exports Hub Best Practices Research Best Practices Hub Capabilities Best Practices Organizational and Governance Models

31. TDL and Exports Hub Capabilities The Phase 1 Opportunity Assessment Concluded the Supply Chain Hub Capabilities Should Fit into the Following Four Competencies: Supply Chain Expertise Economic Development Strategic Infrastructure / Intermediary Funding Collaboration

32. TDL and Exports Hub Capabilities from Best Practice Research 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 Strategic Infrastructure / Intermediary Funding Infrastructure Support and Capabilities Collaboration Joint Commission or Authority Strategic Alliances

33. Hub Capabilities: Best Practices Research

34. Hub Capabilities: Best Practices Research

35. Best Practices Research Focused On The Following Geographies

36. Target Industries for MI Hub 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

37. Supply Chain Expertise

38. Supply Chain Expertise – MI Hub Ratings

39. Economic Development

40. Economic Development – MI Hub Ratings

41. Strategic Infrastructure / Intermediary Funding

42. Strategic Infrastructure / Intermediary Funding – MI Hub Ratings

43. Collaboration

44. Collaboration – MI Hub Ratings

45. Agenda Welcome Introductions Hub Implementation Status Best Practices Hub Research Regional Intermediary Capabilities: Breakout 1 Discussion Report out Organizational Models: Breakout 2 Discussion Report out Planning for next project steps

46. TDL & Exports Regional Intermediary Design – Break Out Session One Small group breakout #1: Assess and Prioritize Regional Intermediary Capabilities What capabilities are essential to achieve the economic development opportunities? What is their relative importance? What are the current gaps for implementing the prioritized hub capabilities? How can we differentiate our hub from other regions based on the implementation of the prioritized capabilities?

47. Breakout Group Assignments Each Group will explore the Hub Capabilities associated with the following Competencies: Supply Chain Expertise – Group A Economic Development – Group B Strategic Infrastructure & Intermediary Funding – Group C Collaboration – Group D

48. Agenda Welcome Introductions Hub Implementation Status Best Practices Hub Research Regional Intermediary Capabilities: Breakout 1 Discussion Report out Organizational Models: Breakout 2 Discussion Report out Planning for next project steps

49. TDL and Exports Hub Best Practices Research Best Practices Hub Capabilities Best Practices Organizational and Governance Models

50. Governance Models Port Authority Model Port Authority “Lite” Model Public / Private Partnership Model Industry Collaboration Model

51. Attributes for Organizational Models Government Regulatory Power Governance Funding Expertise focus Multi-state / Multi-nation Collaboration International or Export Focused Reliance on Smart Zones Foreign Investments

52. Attributes Aligned to Organizational Models

53. General Port Authority Characteristics A government-created, owned, and governed organization With or without private sector representation (not that material to the powers) With a dedicated source of revenue(s) for its operations (from government budgets or from a tax or fee stream) Ability to tax, or to go to the taxpayers for taxes Ability to assemble and own land for development and development deals within its territory or jurisdiction Ability to design incentives or use incentives designed by its government owners Ability to bond Ability to impose user fees Ability to own facilities Ability to operate facilities Ability to select and authorize supply chain/TDL operators within its boundaries Ability to create and operate foreign trade zones Ability to market itself to shippers and their carriers A planning capability (independent of but connected with, the council of governments)

54. Port Authority Model NY / NJ Port Authority Governor of each state appoints 6 members that serve for 6 years Funded from revenue of facility operation, bridge / tunnel tolls, airport and bus user fees, rail fares, rent from facilities, consumer services, and from retail stores Role Promote and protect the commerce of the Port District and undertake improvements Interface with private sector in form of regulatory body and collector of fees Powers include collecting fees and approving / managing port improvements

55. Port Authority Model (NY/NJ Port Authority) Ability to own and develop facilities Ability to select/authorize supply chain/TDL operators within its boundaries Ability to create and operate foreign trade zones A planning capability (independent of but connected with the council of governments)

56. Port Authority “Lite” Model Detroit and Toledo Port Authorities Primarily public sector governance Limited regulatory powers Revenue growth driven by export and import Limited geographic scope Limited mode scope Funded from use of modes within Port Authority control

57. Public / Private Partnership Model KC Smartport Board Consists of Public (DOT, MPO, Airports, Econ Develop Corps), Private (TDL, Consultant, Chambers) and Universities from two states Funded in part by dues or donations (“investments”) from board members’ organizations Roles Market Site Location Assistance (Real Estate and Transportation) Advocacy for Global Logistics Mindset Transportation Resources Connections Supply Chain Education Supply Chain Data Exchange

58. Industry Collaboration Model Example – Columbus 2020 Objectives Add 180,000 jobs by 2020 Increase per capita personal income by 40% by 2020 Attract capital investment of $10 billion Become a recognized national leader in economic development by 2020 Focus on value added potential rather than infrastructure

59. Industry Collaboration Model (Columbus) Initial organizational representation Columbus Partnership Columbus Chamber Battelle NetJets Cardinal Health Columbus MSA Licking Fairfield Pickaway Madison Union Delaware Morrow

60. Industry Collaboration Model (Columbus) Pillars of activity Retention and expansion of existing businesses Attraction of major employers to establish operations in Central Ohio Creation of more commercial enterprises by leveraging research assets Support of civic infrastructure and political conditions that enhance the economic development environment

61. Industry Collaboration Model (Columbus) How different than past efforts Shared community vision and goals Implementation is led collaboratively by individuals from throughout the region Goals have clear metrics to track progress Developed a clear set of strategies and initiatives based on goals Organized with a central chief economic officer for the region Significantly increase both the financial and professional resources dedicated to executing the strategic vision Failure is not an option

62. Industry Collaboration Model (Columbus) Successful programs require: A clear regional vision with community buy-in Active leadership engagement in all phases of the effort, not just the upfront strategy A sense of urgency that acts as a forcing mechanism for change and coordination Quality of life that reinforces economic-development efforts and regional prosperity Belief that workforce development and K-12 education, which strengthen long-term regional health and talent availability, helps address reputation as a place for businesses University involvement in research, commercialization and talent development Multi-generational commitment to economic development and a systematic approach

63. Attributes Aligned to Organizational Models

64. Hub Organization Model Types

65. Agenda Welcome Introductions Hub Implementation Status Best Practices Hub Research Regional Intermediary Capabilities: Breakout 1 Discussion Report out Organizational Models: Breakout 2 Discussion Report out Planning for next project steps

66. TDL & Exports Regional Intermediary Design – Break Out Session Two Small group breakout #2: Evaluate and Recommend Hub Organizational Model Validate attribute alignment for the breakout organizational model Which combination of attributes are appropriate for the region? What are the strengths and weaknesses of the organizational model? What refinements or extensions would be necessary? Who are the stakeholders and/or Board members? How does the model interface with industry and government?

67. Breakout Group Assignments Each Group will explore the Hub Organizational Model Concepts associated with the following Model Types: Port Authority Model – Group A Port Authority “Lite” Model – Group B Public/Private Partnership Model – Group C Industry Collaboration Model – Group D

68. Agenda Welcome Introductions Hub Implementation Status Best Practices Hub Research Regional Intermediary Capabilities: Breakout 1 Discussion Report out Organizational Models: Breakout 2 Discussion Report out Planning for next project steps

70. Recommend hub organizational and governance model