10.19.04 Tuesday@REI "Supply Chain and Logistics Technology: Northeast Ohio's Economic Development Engine"

Norm Roulet's notes from the 10/19/04 Tuesday@REI session on
"Supply Chain and Logistics Technology: Northeast Ohio's Economic
Development Engine"

This was the most insightful Tuesday@REI session I’ve attended – probably the
most eye-opening session I’ve ever attended in Northeast Ohio. My compliments
to Herb Crowther for planning an important agenda and pulling together a remarkable
panel of experts.

It was exciting to hear from some academicians, (CRWU Professor Ron Ballou
and JCU Professor Paul Murphy), sharing valuable perspectives and true
enthusiasm and commitment to contribute to the development of an important
industry cluster in this region, and involve their universities in the
development process – from offers of hands-on support spreading messages about
logistics to commitments to work with companies in the field creating
marketable products, to benefit from technology transfer outcomes… exactly what
NEO leaders prescribe as their universities’ role for our economic development.

Global transportation and logistics powerhouse Penske’s Amy Ilyes made us
appreciate the scope of her enterprise, their commitment to excellence in the
field, and their importance to their industry and to this region. By the end of
the session, she had identified ways her firm may work with other firms at the
table today, demonstrating the unexpected synergy offered through such
cross-enterprise brainstorming and pollination. From the other side of the
industry, Mizar Technologies President Brian Davis brought life to the cycles
of his innovations, offering unique business and homeland security solutions
leveraging state of the art thinking and technology to stand alone in this
region and the world – from both the product development and application sides.

It was then fascinating to hear from the Co-founder of Banyan Technologies
about how his business went from shipping concrete to concretizing a new logistics
field, bridging the gaps between “less than load� shippers and customers – they
are upstarting and upstaging every other solution in this area of logistics to
become a sole source of ASP shipping management services, and seeing more gold
on the horizon mining data captured – smart visioning showing dot-com lives on
after the first bubble burst. Coming in from the highest level is esteemed 40
year industry innovator Edward Crawford, Chairman of near $ billion Park Ohio
and Integrated Logistics Services, who awed everyone in the room with his teachings
of lessons learned over time and daily in his ongoing drive for competitive
excellence.

In conclusion, all agreed NEO is a global leader in the logistics field, and
there is great opportunity to drive for growth of innovation and strength in
this growing cluster. The panelists proposed more involvement of area
universities in the future, and voiced great respect for and commitment to the
individual geniuses in their enterprises – their staff – in making their firms
successful. These were refreshing messages not heard in NEO often – messages of
pride, accomplishment, world-domination, and optimistic visioning that includes
all segments of the economy, at the most core level of our legacy and being.

Some miscellaneous notes from the session:

From CRWU Professor: Ron Ballou - site selection expert

Cleveland is not an advantaged location from the demand side. Our competitive
zenith was the turn of the last century because of water - new hotspots are on
roads. Cleveland is competitive in land, utility, and other operating cost factors
- considers labor high cost.

From Penske Director of Logistics Technology Engineering: Amy Ilyes - Case
PhD

Penske is a $ billion company - bought Leaseway - global presence, now
expanding into China - GE is a limited partner. CEO Roger Penske is from Shaker
Hts., and they have major presence in Beachwood. Provide Supply Change
Management, Transportation Management and Inventory Management

From Mizar President Brian Davis - entrepreneur

Developed patented applications and technologies that leverage GPS (Iridium)
and networking to track any container anywhere in the world - now funded by
homeland security. Low cost, world’s best solution – very innovative products
and entertaining presentation.

From Banyan Tech. Co-Founder/VP Ops.: Lance Healy

Was in concrete business but needed less than truckload (LTL) carrier management
solutions - they created web based bridge between all the carriers to allow
better tracking, bidding, business intelligence - carrier neutral - developing
common platform for merchants and carriers and see all shipping data passing
through and aggregating in their databases - seem to have a competitive
advantage through independence, first to market, and lean operations. They find
the talent pool here excellent... capabilities and work ethic.

From Park Ohio CEO Ed Crawford

Powerful personal presence. Park/ILS is impressive. $450 million logistics
management - $400 million manufacturing. Views logistics as a critical aspect
of future industry and US competitiveness - Manufacturers are focused on
driving down material and labor costs - converting raw materials into
receivables...

Information - Logistics - Supply Chain Management - ILS - is critical to Park -
is single source to over 30 GE plants - spent over $35 million on information
systems supporting that relationship - products go to point of use - bought
code from IBM for plant floor automation to have access to technology/data enabling
better logistics management from plant out. Very impressive outlook and
approach.

Crawford stresses the value for Case and JCU to provide more
research and focus on logistics - Ballou made clear in his talk he is
interested to expand that area of study, especially leading to products and so
Tech Transfer

Q. Crains asked if there is a knowledge gap about innovative logistics
solutions among manufacturers in this region - do we need to educate them about
logistics technology? Healy says definitely YES. Crowther speaks of "extraprise"
aspect of understanding interrelationships across supply chains. Crawford
addresses from angle of the auto industry... world class manufacturers are
"makers" - "assemblers" and are focused on intellectual
property. CEO and product managers don't want inventory. Resistance comes from
purchasing and they will block, but world-class manufacturers know better than
to allow that to happen.

Crawford pitched to Applied Materials and asked them what does it costs to
get their product to the "point of use" and it took them months to
determine.

Conclusions -

• Crawford - all comes down to excellent quality at right price
• Healy - have very few customers here – local manufacturers don't get it – but they
  are looking for answers to get through the clutter
• Davis - used network to get to right people, but ultimately was the smartest, fastest
  and best... NEO needs to buck up - spend more time in these kind of meetings -
  do things smarter and better (and he realized at this meeting Penske is a good
  prospect for their technology).
• Ilyes says Penske is looked upon to have the best products and technologies in
  the world, even if not lowest cost. And, asked Davis why Mizar hadn’t approached
  Penske about his technology (connection made).
• Ballou says if you're efficient you'll get business - if not not
• Murphy from JCU is willing to talk to local companies that need help understand
  logistics

Crowther sums up by stressing need for more of these types of collaborations…
and follow up meetings are scheduled