Midland Research Institute for Value Chain Creation

Michigan State University is expanding a key regional collaboration with the opening of the Midland Research Institute for Value Chain Creation. The initiative aims to identify and address "grand challenge" caliber problems in value chain research. The Institute's portfolio will comprise interdisciplinary and multi-disciplinary projects involving faculty, students, industry, and community partners.

David Closs, who serves as the interim executive director, is working with a technical advisory board to lay the ground work for opening and staffing the facility in Midland, Michigan, approximately 80 miles northeast of the East Lansing campus.

Midland is home to Dow, a chemical, physical, and biological sciences company with approximately 53,000 employees worldwide, and Dow Corning, a silicon-based technology company with nearly 12,000 employees worldwide. With the influence of these two major employers, the region, which includes Isabella, Midland, Saginaw, and Bay counties, is heavily invested in community well-being. In recent years, community leaders working on economic growth have expanded efforts to include Birch Run, Frankenmuth, and Chesaning, broadening the regional focus into Michigan's Great Lakes Bay Region.

An initial five-year, $15.5 million budget with a research director and six tenure stream faculty researchers is supported by MSU and philanthropic contributions from local sources, including The Dow Chemical Company, The Dow Chemical Company Foundation, Dow Corning, the Herbert and Grace Dow Foundation, the Rollin M. Gerstacker Foundation, and the Charles J. Strosacker Foundation.

Longstanding Connections Between MSU and Community Leaders

The Institute generated from longstanding connections between MSU and the Great Lakes Bay community leaders, and conversations between them about how best to contribute to the region's closely entwined public and private sector objectives. Dr. Closs, who is chair of MSU's internationally recognized Department of Supply Chain Management, was designated to lead initial efforts. He is developing an integrative, solution-driven research agenda through which researchers are challenged to think cross-functionally while working with industry and community stakeholders. The institute will offer a hybrid (online and on-site) master's degree program in supply chain management, and on-site certificate (non-degree) training, providing professional educational opportunities for the regional workforce and talent development for area employers.

The Institute's offices will be located in a new, mixed-use downtown Midland development known as East End, with an opening celebration scheduled for August. The complex is part of an effort to foster community vitality, economic development, and a collaborative atmosphere. Among the tenants: Dow, Chemical Bank, MidMichigan Health, and a restaurant owned by the owner of the Great Lake Loons minor league baseball team.

"Community and business leaders from across the region are pleased to welcome Michigan State University and the Research Institute to the area. The caliber and capabilities of MSU are well known and to have their cutting-edge work carried out here locally is very exciting, and a great compliment to the science and technology heritage of the Great Lakes Bay Region. We look forward to collaborating closely with Dr. Closs and his research team in building a world class research and education institution," said Bo Miller, president of The Dow Chemical Company Foundation.

Supply Chain and Value Chain

The MSU supply chain program integrates manufacturing operations, purchasing, and logistics into a unified program. It is the top ranked supply chain/logistics education program in the country, according to the U.S. News and World Report rankings for 2014. Closs has chaired the department since 2007.

According to Closs, the competitive global marketplace continues to produce increasingly complex challenges for companies to operate effectively. Some issues emerging at a rapid pace include developing integrated supply chain solutions, technology for large data analytics, smart packaging, anti-counterfeiting, and adaptive sensor networks.

Value chain creation refers to the effective management of processes affecting nearly every stage of product and services design and delivery to satisfied customers. It includes product innovation, design, sourcing, procurement, manufacturing, packaging, transportation, inventory management, warehousing, marketing, customer services, and returns and repairs.

"We think end to end," says Closs. "The value chain of activities is an opportunity to put critical components together and work with companies on problem solving that involves multiple perspectives and disciplines."

Integrative, Solution-Driven Research

The Institute's research agenda was established to generate projects that promote economic competitiveness, enhanced quality of human life, environmental sustainability, and corporate "intrapreneurship" (entrepreneurial characteristics within a large organization). Tim Hogan, professor in the Department of Electrical and Computer Engineering serves as the research director.

Three primary research areas include:

• Novel, evidence-based tools for management of products and sales
• Quantitative management of raw materials and production
• Food and water projects with particular humanitarian impacts

The School of Packaging in the Department of Food Science and Human Nutrition, College of Agriculture and Natural Resources, and experts in anti-counterfeiting in the School of Criminal Justice, College of Social Science, are also participating. Plans also call for water quality research experts and others. The scope of intellectual leadership offers a diverse, multi-disciplinary approach to problem solving.

"The interdisciplinary strengths of MSU contribute to an integrated process that offers a more comprehensive and more holistic method. We work collaboratively with external constituencies to achieve demonstrable, positive results," said Closs.

One project underway, led by Closs and Fred Rodammer, Broad College of Business professor of practice and former director of the Center for Leadership of the Digital Enterprise, aims to increase the economic competitiveness of Michigan's agricultural industry by increasing the ability of Michigan agriculture to cost effectively transport higher crop yields to national and global markets. A value chain approach recognizes that expanding the amount local growers produce will affect the region's transportation infrastructure; in fact, road conditions, fuel costs, and labor resources all will affect the outcome of getting crops from more remote areas of the state to suppliers in a cost effective and efficient manner. Solutions to these challenges will involve cooperation from industry, government, and academic problem solvers.

Another early stage project involves RFID (radio frequency identification) sensing, technology that uses a tagging system to track and manage inventory and equipment. The methodology can resolve issues related to packaging, engineering, transportation, inventory, product security, and technology, along with the researchers' abilities to address additional problems that occur during a project.

"What we find is that any problem or glitch the company is experiencing means that it can impact the supply chain," said Closs. "Even if it seemed small at first, if it is not dealt with or resolved then it can create obstacles in other areas of operation."

"It is particularly significant to look for problems that were not forecast or anticipated. Identifying potential gaps can contribute to more successful outcomes because those gaps can impact other components of the value chain creation, especially when you are dealing with worldwide industries. Global impacts still affect local businesses."

Applicable Discovery

According to Closs, the academic discovery and lessons learned at the Midland Research Institute for Value Chain Creation can be applicable to industries in other Michigan communities and beyond, setting a tone for international prominence in identifying and addressing "Grand Challenge" caliber value chain research problems.

"We think broadly in regard to the way this research will invite other researchers and industries to collaborate with us," said Closs. "MSU's strength is in the integrated process, and we are going to have the opportunity to put critical components together and work with people in the Midland and Michigan's Great Lakes Bay Region to get at some of their biggest challenges."