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U.S. Manufacturing Competitiveness Initiative Dialogue on Next Generation Supply Networks and Logistics

When: February 28-29, 2012
Where: Georgia Institute of Technology
Georgia Tech Global Learning Center
84 Fifth St. N.W.
Atlanta, GA 30308-1031
T: 404-385-6203
Chairs: G.P. “Bud” Peterson, President, Georgia Institute of Technology
Deborah L. Wince-Smith, President & CEO, Council on Competitiveness

Manufacturing competitiveness is one of the great challenges and opportunities of our time—one that will determine the legacy America bequeaths to its children and grand­children. Jobs, investment, game changing innovations, economic prosperity, improved standards of living and national security depend on the creativity and commitment of our nation to lead a new era of manufacturing at home and abroad.

The last 25 years has witnessed the movement of manufacturing for the U.S. market off-shore, mainly to Asia, due to a sufficiently skilled off-shore labor base with wage rates so inexpensive that they offset (1) the additional cost of transporting freight across the Pacific and the U.S. land bridge and (2) the additional cost of safety stock needed to compensate for increased lead times and increased lead time variability.  Perhaps more ominously, the globalization of manufacturing has also stimulated the globalization of related product, process, and service innovation.  However, off-shore wage rates are rising in Asia and freight transportation costs are rising due to the increasing cost of petroleum-based energy, in spite of the dramatic efficiency gains in the global logistics industry as a result, in part, of applications of computer and communications technologies linking global supply chains.  These changes are moving supplier footprints closer to home, to the advantage of U.S. manufacturers.

Yet, the potential for U.S. manufacturing to achieve suc­cess is far from certain. Achieving such success will take nothing less than a concerted effort in basic research and devel­opment, workforce education, infrastructure devel­opment, and regulatory reform.  In this Dialog, we explore how the supply chain, logistics, and freight transportation industries can help to create competitive advantage for U.S. manufacturing through next generation supply networks and advanced logistics and infrastructure.  In part due to a tradition of enabling infrastructure, lean and beyond-lean business practices, innovation, and deregulation, the U.S. logistics industry has provided competitive advantage to U.S. industry by insuring the efficiency of moving goods from that has been without peer internationally.  However, the industry faces many challenges to continued efficiency improvement.  Investment in road, rail, border crossings, seaport, and freight airport infrastructures is needed in order to reverse the growing impact of congestion, the concomitant deterioration of efficiency of our system of moving goods domestically and through our border crossings and international sea and freight airports, and the anticipated changes in the global supply chain infrastructure, such as the third set of locks in the Panama Canal.  Innovative uses of the emerging availability of real-time data having high information content, automation, new business processes, and new customs procedures are needed in order to enable continuous competitive advantage of U.S. manufacturers and more generally of all U.S. shippers.  Other challenges include the cost of energy and its potentially high variability due to a variety of geo-political and other reasons, particularly in light of the high percentage of energy for the freight transportation sector that is derived from petroleum.  What are the labor, regulatory, and policy issues that need to be addressed in order to provide continuing competitive advantage to U.S. manufacturing through supply networks and logistics?  Where will these challenges be most acute geographically within the U.S.?  What manufacturing industries will be most affected?  What ports and border crossings will be most affected: West, Gulf, or East Coast ports or the NAFTA border crossings?  What international competition is forming?  The PRC manufacturing industry is beginning to globalize; can its logistics industry be far behind?  How will all of these changes on the competitive horizon challenge the U.S. supply chain and logistics industry and how can we face these challenges most effectively? 

This Dialogue on the Next Generation Supply Networks and Logistics will examine the opportunities and challenges faced by the supply chain, logistics, and freight transportation industries in helping to enable the U.S. manufacturing industry to have competitive advantage in tomorrow’s competitive landscape.  The resulting findings will be incorporated into a joint Georgia Tech -Council on Competitiveness Report and will inform the Council on Competitiveness’s Na­tional Manufacturing Strategy.