1

Buy Locally, Sell Globally Developing a Vendor Network to

Drive Economic Growth in Greater Binghamton

Patrick Rogan, CPIM

2

Presentation / Discussion Overview

• Introduction• STOC/Supply Chain Initiative Overview• Greater Binghamton overview – statistics• Vendor Network Concept• Opportunities• Local Supply & Lean Enterprise • Challenges• Next Steps

3

Southern Tier Opportunity Coalition

• Single point of contact for regional business development resources

• Promote further collaboration between local businesses with a goal of spurring local economic development

• Effectively leverage University research for commercialization

• Enhance public sector initiatives with a coordinated private sector initiative

4

STOC Vision & Mission

Vision: To be the premier academic/business alliance leveraging innovation and technology that creates excitement and prosperity in the community, capturing the hearts and minds of the next generation

Mission: The Southern Tier Opportunity Coalition will identify, garner and apply resources through collective action to enhance existing technology businesses and to nurture new business opportunities

5

STOC Objectives Focused on the Strengths of the Region

• Establish the Southern Tier as a competency center for emerging business development

• Sustain long term growth through evolving technologies

• Attract common ‘value chain’ business/technology and business diversity

• Expand geographically to gain more technology and business diversity

6

Some STOC Members•Lockheed

•BAE

•United Health Services

•BCC

•Excellus Blue Cross

•NBT

•Diamond Visionics

•BU

•MeadWestvaco

•IBM

•Heilind Electronics

•AM&T

•Hardinge

•EIT

•Xonitek

•Universal

•Visions

•Geodis America

•Rockwell Collins

•Over 55 members

7

Today’s Discussion:

• Consider the formation of a Greater Binghamton regional B2B vendor network to support businesses to: “Buy Locally, Sell Globally”

• Discuss opportunities & challenges

• Feasibility

• Next Steps

8

Greater Binghamton Demographics

• Population of 300,000 in 40 mile radius

• Households > 100,000, Families > 65,000

• Median income = $37,800

• Median family income = $46,000

• Unemployment rate = 8.9%

9

Major Employers

• United Health Services - 4,500+ • Binghamton University - 4,000+ • Lockheed Martin Owego - 2,000+• Endicott Interconnect - 1,700+ • BAE Systems - 1,200+ • IBM - 1,100+ • Maines Paper & Food Service - 1,000+ • Frito-Lay - 700+

10

Vendor Network Concept

• Capture the interest of large employers (regional exporters of goods and services)

• Review strategic and non-strategic spend w/ large employers. Group materials & services, volumes

• In parallel, begin to build a database of small to medium businesses and their capabilities & capacities

• Create a web-based, searchable database front end to facilitate finding various products, capabilities & capacities

• Work to develop a process to facilitate transactions. May include: pre-qualifying vendors, site-visits, discounts?

11

Vendor Network Concept (cont.)

• Investigate opportunities to partner & collaborate with other regional “buy local” initiatives (consumer focused v. B2B):

- Greater Binghamton Chamber of Commerce “Buy Local” initiative

- Scranton/Wilkes-Barre: ibuynepa.com on-line shopping community

12

Vendor Network Advantages

• Increase vendor sales• Boost regional economy through impacting

“regional balance of trade” & spending multiplier• Develop local supply base for “customers”• Transportation savings• Environmental – less fossil fuel consumed• Promotes Lean Enterprise

13

Advantages - more detail

• Regional balance of trade impacts – redirect current spend going outside of region to vendors in Greater Binghamton.

• This decreases “regional imports” keeping more dollars in Greater Binghamton.

• Regional spending multiplier then “kicks in” – can be as high as 8 to 9 times the original dollar impact depending upon the situation. - Example: local vendor employees spend their wages on locally sold goods and services. The plumber hired by the employee then buys vegetables at farmer’s market, etc., etc.

14

Advantages - more detail

• To customers, a local supply base can mean:

- better access to product development/ co-engineering

- easier access to senior management

- tighter control of strategic inputs

- potential JIT; smaller, more frequent deliveries

- possible point of use deliveries with VMI (consignment?)

- transportation savings

15

Advantages - more detail

• Lean Enterprise – local suppliers can be a big plus as companies pursue lean for all of the reasons listed on the previous slide

• Lean can lead to increased collaboration, stronger partnerships, shared savings, better business

16

Vendor Network Challenges

• Resources – need skilled volunteers to establish relationships and initial “deal flow”

• “Backbone” - need skilled resources to establish vendor database, populate data, build navigational capabilities & maintain network

• Customer corporate procurement, national contracts? (Could also be an advantage)

17

Challenges (cont.)

• Will local vendors “fit the bill”?

- capability?

- quality?

- capacity?• Risks with close proximity

- exposure to regional problems

- political/ social issues

- natural disasters (floods, tornadoes, hurricanes)

18

Next Steps

• Continue monthly STOC Supply Chain Initiative Meetings

• Expand initiative team – sign-up new members

• Find vendor network “champion”, a leader to drive the vendor network project forward

• Circulate skills matrix and sign-up specific vendor network volunteers

19

Thank You