LANSING, MI — In the early 1990s, a Michigan-based trucking company faced a dilemma: innovate or get left behind. Inspired by the “just in time” warehousing philosophy deployed by the automotive industry, SteelPro of Novi upgraded its fleet, invested in technology and implemented a new approach to inventory management. Today, SteelPro owns the largest steel warehouse in North American and is a case study of the positive outcome when companies improve speed of delivery, reduce waste and control costs.
That model of delivery and distribution efficiency is at the heart of the state of Michigan’s effort to coordinate logistical and supply chain support for businesses stretching from the Upper Peninsula to northwest Ohio and southern Ontario – a key to creating jobs in the ongoing reinvention of the Michigan economy.
The newly established Commission for Logistics and Supply Chain Collaboration, which held its first meeting Feb. 11, aims to develop a statewide strategy featuring a partnership between government and industry in the pursuit of raising the international profile of Michigan’s logistics capabilities.
“Michigan is the global automotive capital and the busiest national border crossing in North America, which translates into a profound opportunity for businesses to utilize our supply chain expertise in trade with Canada and beyond,” said Frederick Schlemmer, chief financial officer of SteelPro, a collection of companies in steel transportation and warehousing.
Schlemmer is one of seven members representing the state’s largest corporations, small businesses, economic development agencies and academia appointed last fall to the commission by Gov. Rick Snyder. A 10-member board within the Michigan Strategic Fund, the commission advises Michigan Department of Transportation (MDOT), Michigan Department of Agriculture and Rural Development (MDARD) and Michigan Economic Development Corporation (MEDC) on freight transportation and supply chain management issues. The respective heads of the state departments and agencies also serve on the commission.
In the next six months, the commission will focus on connecting regional and local economic development organizations in a one-stop statewide supply chain strategy to assist businesses moving materials and products to and from Michigan. Among the benefits: reducing costs and improving delivery times, thereby increasing profitability and competitiveness.
“Reforming the state budget, lowering business taxes, eliminating burdensome regulations and connecting talent with employers have produced a significantly improved business climate in Michigan,” said Gov. Snyder. “In addition, we must also provide the type of efficient transportation system that promotes economic growth. A high-performance supply chain allows firms to deliver their products to global consumers at a more competitive price and at the right point in time.”
Michigan top import/export industries include automotive, advanced manufacturing, food and agricultural products, biotechnology, medical devices, defense/aerospace, chemicals, furniture, wood products, mining and clean energy.
Nearly half of Michigan’s economy is dependent of foreign trade; the state ranks eighth among largest exporting states in the U.S. Further, Michigan averages $61.5 billion in annual trade with Canada, which is the U.S. largest trading partner.
“To remain competitive, Michigan’s food and agriculture sector demands a world-class system of moving goods and commodities to both the nation and the world,” said Jamie Clover Adams, director, Michigan Department of Agriculture and Rural Development. “The commission is a vital catalyst to help foster collaboration and further integrate the state’s transit alternatives as another compelling reason for conducting business here.”
An effective logistics and supply-chain management strategy is essential for a company to compete globally, said Michael Finney, president of Michigan Economic Development Corp., the state’s marketing arm and lead advocate for business development.
“Moving materials, goods and products on an ever-shifting deadline schedule is a puzzle to solve,” said Finney. “The challenge requires people working together, understanding the possibilities of Michigan’s freight transportation network of routes for the timely delivery of products, whether it’s by truck, air, rail water or pipeline.”
During the last decade, supply chain management has become one of the country’s most popular four-year business degrees. Two state universities – Michigan State, and University of Michigan – rank number one and 10, respectively, in the top supply chain management/logistic programs in nation, according to U.S. News and World Report.