Overview and Need

Globalization has had a tremendous impact on manufacturing industries and world economies. While the complexity of global operations can be daunting, the growth and supply chain reconfiguration opportunities to capitalize on global markets, resources and technological advances opportunities cannot be ignored. World markets are expanding and even small regional firms are pursuing international opportunities, sourcing internationally, or facing international competition.

Through the 1990's and early 2000's, Asia was considered the most cost effective manufacturing location based primarily on low cost labor. The balancing factor was transportation for the most part, but the labor differential was so great that a great many firms decided to make the move. This view treats manufacturing processes as a commodity that should be sourced at the lowest possible price.

The key objective of this consortium is to bring together manufacturers, distributors, supply chain specialists, technology providers, industrial parks, economic developers, and government entities to study and develop:

• Potential markets in the Americas driven by a local manufacturing base.
• Analyses on the cost efficiency of different world manufacturing zones and their impact on a firm's return on investment.
• A calculation with a comprehensive set of cost implications for best practices in automation, lean, supply chain, and other solutions in differing manufacturing environments and how those practices impact where manufacturing should take place.
• A definition of the key benefits of different manufacturing technology solutions and their cost implications in alternative manufacturing scenarios.
• Analyses of agile postponement and other emerging manufacturing strategies and their impact on profitability, growth, return on investment, employment, community development, and government decision-making.
• Analyses for different supply chain partners on roles and growth opportunities in design, different stages of manufacturing, distribution, transportation, and final market penetration (sales and marketing).

The research methodology will be to:

• Conduct consortium meetings to bring together researchers, corporations, and government organizations participating in the consortium to codify best practices, growth strategies, cost structures, supply chain processes, and other issues relevant to the manufacturing location decision.
• Create industry-specific location cases for consortium members to evaluate postponement and location decisions as well as the management and sustainability of those decisions.
• Develop models that quantify and monetize benefits of supply chain best practices, information management processes, and automation technologies.
• Determine the impact these benefits have on ROI and the associated risk in specific industries and compare local to offshore manufacturing in key regions like the US, Latin America, and Asia.
• Assess the sensitivity of the ROI equation to cost assumptions associated with labor exchange rates, security, facilities, utilities, shipping, expediting, quality, etc. and how inaccurate cost assumptions could negatively affect ROI.
• Determine strategic implications for manufacturing best practices and technology solutions on retaining manufacturing in home markets.

A research team from Texas A&M University, the University of Texas Pan-American, and other universities will analyze growth opportunities with consortium members to determine how to optimize ROI in manufacturing strategic decisions. Supply Chain impacting factors will be included in the analysis along with best practices in lean manufacturing and Supply Chain Management to determine the ROI impact of differing strategies.

The consortium meetings will provide an opportunity to discuss initial findings from the various cases. These meetings will also allow for a discussion regarding the key benefits of growth opportunities, supply chain best practices and technology solutions, and how these benefits can be quantitatively assessed and monetized. The implications for these benefits on ROI will also be discussed.

Consortium members will be able to guide the research study and specify which alternatives, best practices, technologies, and industries are of interest to them. These studies will focus on return on investment for the firm on a specified timeframe.

• Each MANUFACTURER member can present the research team with a regional growth opportunity strategy to be evaluated through a market analysis and a location calculator customized specifically for its use. The results of the analysis and the calculator will be specific deliverables to the firm.
• Each DISTRIBUTOR and logistics firm member can present the research team with a regional growth strategy to support manufacturing partners either through postponement or some other services. A market analysis will be conducted and the strategy will be evaluated. A customized calculator will be used to demonstrate the offering's value to supply chain partners and a financial analysis will be conducted for the distributor's investment (ROI to the distributor). The results of the analysis and the calculator will be specific deliverables to the firm.
• Each INDUSTRIAL PARK AND CITY can present the research team with two industry verticals from which they would like to attract manufacturing firms. A Return on Investment (ROI) calculator, customized to demonstrate the target firm's financial process, will be used to analyze the value of investing in that park or city. The results of the analysis and the calculator will be specific deliverables to the firm.
• Each SUPPLY CHAIN SOLUTION PROVIDER can present the research team with a strategy to demonstrate the value of their services and how those services affect the manufacturer's market decision. The strategy will be evaluated with a value calculator customized to demonstrate value to manufacturer customers. The third party analysis (the research team) and calculator will be specific deliverables to the firm.
• FEDERAL AND STATE AGENCIES will receive a regional report demonstrating the value of locating within their area. The report will pull from all of the previous studies, specific territory market analysis, and industry vertical findings. The calculators and other analysis tools, together with the comprehensive analysis and regional value proposition will be specific deliverables.
• ALL MEMBERS: Members will receive a comprehensive report providing a summary of the findings from all of the particular best practices and regional comparisons (company specific information or findings will be kept confidential). This inclusive report will also provide general conclusions and strategic findings.
• General findings will be published to support "Bringing Manufacturing Home".

A Research Consortium is a collaboration of organizations that frequently includes private and public companies, industry trade associations, universities, and government agencies to conduct industry focused research. The objective is to clearly identify a problem or a challenge that is common to the consortium members and to develop applicable solutions.

Research consortia are formed so that individual firms and organizations can combine resources and expertise to identify solutions to business challenges. Joining a research consortium allows an individual organization to benefit from the collective resources of the other channel participants along with Texas A&M's Global Supply Chain Laboratory researchers in studying industry challenges and identifying practical solutions. Membership in a research consortium is an economical path to low-cost, high-quality research that leads to the development of solutions that are relevant, applicable, and effective for each member organization.

This Research Consortium will be beneficial to:

The benefits to consortium members include the opportunity to actively participate in groundbreaking research into one of the most crucial and timely challenges facing the industry. Each member of the consortium will also be able to direct the scope of the research so that the results are actionable and sustainable. Additionally, members of the consortium will have a head start on competitors in understanding and implementing the new best practices developed in this consortium. Each member will also develop a far deeper understanding of these best practices by participating in workshops conducted by the Global Supply Chain Laboratory research team.

The membership fee is $25,000 per organization in the consortium. The fee will cover the project specific to your organization (see Deliverables section), workshops with member firms to design the research solutions personalized to their needs and attendance in consortium meetings hosted by the Global Supply Chain Laboratory at Texas A&M University.

The membership fee is $50,000 for Federal and State Governments and agencies. Federal and State agencies will receive a regional report demonstrating the value of locating within their area. The report will pull from all of the previous studies, specific territory market analysis, and industry vertical findings. These organizations will also receive the comprehensive analysis of their region's value proposition along with calculators and other analysis tools.

For more information about the Bringing Manufacturing Home Consortium, contact: