New study shows Detroit poised to create 66,000 new jobs and increase economic activity
The Detroit Regional Chamber and Michigan State University have unveiled a strategic plan to build the region into a global supply chain hub. The region stands to gain 66,000 new jobs and increase economic activity $10 Billion over the next ten years by implementing the strategy developed, which advocates capitalizing on the existing infrastructure and assets as well as the location of the region to build the area into a supply chain hub.
The region has long been a leader in manufacturing, which has led to a strong supply chain presence, is strategically situated on the U.S. Canadian border and is the busiest international border crossing. Furthermore, many of the assets are already in place including air, rail, truck and water capabilities and a highly skilled workforce. Combined the region can offer shippers and companies a high level of value in designing and routing their supply chains in the region.
The study, sponsored by the New Economy Initiative for Southeast Michigan, lays out the benefits and an initial strategy to turn the Detroit area into a supply chain hub; a collection of smaller supply chain facilities that help facilitate inter-modal transportation of goods (air to rail, rail to truck, etc). The six-month study looked at the greater southeast Michigan , southwest Ontario and northwest Ohio in developing their recommendations.
The supply chain management strategy involves developing three essential components. The first is to build differentiated hubs, which can attract industry activity to stimulate economic growth and job creation. The second is to attract industries to the supply chain hub to build economies of scale. The third is to facilitate hub development through private/public sector partnerships.
The study identified the targeted industry sectors for the supply chain hub based on the potential for uniqueness of capability, economic development and job creation within the industry sector and potential sector growth opportunity. Twelve industry sectors were identified and these sectors were then grouped into three major clusters focusing on heavy manufacturing, light manufacturing and distribution.
“According to the models we’ve developed for the region, by focusing on light and heavy manufacturing and distribution centers we stand to gain upwards of 66,000 jobs increasing economic activity by $10 billion annually,” said David Closs, professor, Michigan State University and co-author of the study. “However, to achieve the job growth and increased economic activity the region must refine some economic and regulatory policies and enhance communications regarding the unique capabilities the region offers each of the strategic elements.”
According to Closs, the region offers unique benefits across the following: ability to serve global markets; infrastructure and support capabilities; government regulations; competitive tax climate; availability of human, land, supplier, and financial capital; economic competitiveness and lowest total cost to serve; and, supply chain sustainability.
“The region’s unique location and capabilities make it a very attractive location to develop into one of the world’s leading international logistics and supply chain hubs. In addition to the geographic advantages, our area has a highly-skilled workforce as well as the infrastructure and assets in place to become a leader in the global supply chain,” said Melissa Roy, senior director, Detroit Regional Chamber. “By leveraging this position companies can increase the speed of moving goods while decreasing cost across multiple modes of transport; air, sea, rail and truck.”
The study found that strategically, the Detroit region is well positioned to grow their supply chain presence and offers business many benefits:
- Good potential for cross-border distribution hub away from congestion of Chicago-Toronto
- Good potential for trans-loading heavy imports from Halifax , Nova Scotia , Montreal , or Prince Rupert in Vancouver for import from ocean ports with less congestion to U.S.
- Good airport and highway infrastructure with limited congestion
- Economic competitiveness and lowest total cost to serve offer companies a strong existing and knowledgeable workforce and infrastructure
- Highly skilled management and labor talent offers high value to companies and is readily available
- Land and facilities readily available
- Relatively inexpensive outbound motor carrier capacity
Supply chain hubs begin as high activity transportation centers where freight is brought in from domestic and international locations and shifted from one transportation mode to another, e.g. water to rail, rail to truck, air to truck, to complete efficient delivery to manufacturers, retailers, and consumers,” said Closs. “As the hubs develop, activities such as warehousing, inventory management, and light manufacturing begin to occur as a result of the convenience of locating near major freight hubs. Eventually, management expertise is necessary to guide, integrate, and synchronize these activities across firms, region, and globe.”
Supply chain expertise has become a selling point among many North American cities due to the significant economic potential; based on research at Michigan State University , the economic multiplier for supply chain activities ranges from 1.8 to 3.0. Memphis , TN and Louisville , KY have developed substantial economic activities using the supply chain solution capabilities of FedEX and United Parcel Service. Chicago , IL , Columbus , OH , Kansas City , MO and Indianapolis , IN have similarly used their cross-road locations from a highway and rail perspective to develop a substantial supply chain industry.
About the Detroit Regional Chamber
With over 20,000 members and affiliates, that employ over three quarters of a million workers, the Detroit Regional Chamber is the largest chamber of commerce in the country. The chamber's mission is carried out through business attraction efforts, advocacy, strategic partnerships and providing valuable benefits to members. For more information please visit, detroitchamber.com.
| < Prev | Next > |
|---|
