The Benefits of Clusters & Consortia

1. The Benefits of Clusters & Consortia Eric Joseph Esoda, CPA Director of Operations Northeastern PA Industrial Resource Center, Inc.

2. What is a Cluster? What is a Consortia? Cluster ~ Group of companies within the same industry. Consortia ~ Group of companies with a commonality other than the industry in which they operate.

3. Cluster & Consortia Benefits • Identification of best practices relative to training. • Identification of shared training needs. • Leverages purchasing power and financial resources. • Enhances grant applications and training proposals. • Enables networking among participants.

4. Cluster/Consortia Example Eight companies form a consortia: • Two want 3 supervisors trained in Six Sigma. • Each of the other six want 1 supervisor trained in Six Sigma. • One company agrees to take the lead and host the Six Sigma training at their facility. • The companies agree on a training schedule, training provider and other logistics.

5. Cluster/Consortia Example If independently pursued through open enrollment courses, cost of 12 Six Sigma training programs is: 12 X $1,695 = $20,340 When pursued as group effort, cost for one on-site program is $11,140. Savings = $9,200 or 45%

6. Cluster/Consortia Example Eight companies meet to discuss current and emerging needs for CNC operators. Together, the companies anticipate over 220 CNC operator hiring opportunities within the next 12-18 months. Consortia agrees to work with NEPIRC, educational providers, WIBs and others to submit grant applications to fund local CNC operator training programs.

7. Cluster/Consortia Example Over 20 plastics manufacturers cluster to identify shared training needs. Cluster forms Steering Team and advisory boards. Cluster works with NEPIRC, training providers, WIBs and others to develop customized training programs and submit grant applications. Cluster is awarded a $400,000 Incumbent Worker Training Grant and subsequent $200,000 add-on.

8. Why wouldn’t companies cluster or consort? • Concerns about collaborating with actual or potential competitors. • Clinging to belief that “we’re all alone”, “we’re unique” or “it won’t work for our industry”. • Concerns over consortia or cluster speed, flexibility or adaptability. • Fear of employees sharing too much information. • Don’t know where to start. • Too busy, too much work, too time-consuming.

9. So what’s the answer? • Identify a few anchor companies. • Set consortia or cluster ground rules. • Find an experienced and neutral facilitator. • Leverage your WIBs, EDAs and other organizations. • Focus on commonalities – not differences. • Remember that when the group wins, all its members win as well.

10. How can NEPIRC help? NEPIRC provides the following help to early-stage clusters and consortia: • Identification of potential cluster and consortia members. • Assistance with recruiting members. • Meeting set-up and facilitation. • Assistance in securing help from WIBs, EDAs and training providers . • Grant writing assistance.

11. NEPIRC Contact Information Eric Joseph Esoda, CPA Director of Operations 75 Young Street – Hanover Industrial Estates Hanover Township, PA 18706-1471 (570) 819-8966 x 116 eric@nepirc.com