Buy Locally, Sell Globally Developing a Vendor Network to Drive Economic Growth

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

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