Virginia LogisticsResearch CenterResearch Center

Key Stakeholders andKey Stakeholders and Associates meetingg

Fort Lee, VirginiaJanuary 18, 2011

Genesis of the VLRC

• 2005 BRAC impact –Fort Lee –November 2005

• HR 487‐ July, 2007 recognized modeling and simulation as aas a national critical technology

• VLRC Feasibility Study‐May 2009

• Strategic Plan for VLRC J l 2010• Strategic Plan for VLRC –July 2010

• Strategic Plan briefing to CPDC Executive Committee –g gAugust 2010

A Strategic Plan for the VLRC gPresentation to Key Stakeholders

Recommendations for a framework for an initial Strategic Plan

Dr. Thomas W. MastaglioJanuary 18, 2011

Topics

O i d R lt f St d• Overview and Results of Study

• Recommendations 

Di i• Discussion

SUMMARY

• Establish VLRC as 501(c)3 governed by Board• Potential to become unique national center for logistics research and education• Organize with participation from Industry, Academia, and GovernmentGovernment• Hire a dynamic Executive Director with industry ties, organize staff hierarchically under the Executive Director• Identify and execute near term projects to validate value to constituents• Funding for first 5 years should come from Commonwealth, local government, and stakeholders; thereafter center should be self supportingbe self supporting• Partnerships between VLRC and members and amongst the members will be key to success

Study Process1 D t S1. Data Sources

• Identified Stakeholders• Conducted interviews• Collected survey input• Collected survey input• Conducted customer focus group

2. Analyzed Data3. Applied researcher’s expertise to clarify data analysis3. Applied researcher s expertise to clarify data analysis4. Prepared report for CPDC

Results

• Strategic Framework• Operations Structure

P li d P• Policy and Processes• Staffing• Market Identification• Research• Financial Strategies• Intellectual PropertyIntellectual Property

Strategic Framework

• Center Vision: Become a premier center forCenter Vision: Become a premier center for applied logistics research leveraging best practices from all sectors to improve logistics

tioperations.• Mission

• Pursue projects for industry, government and military leveraging academic expertise• Identify key issues in logistics to leverage applied researchapplied research• Provide professionals and corporate members access to VLRC resources, f iliti d h ltfacilities and research results

Operations Structure Organize as a separate, stand alone not-for-profit entity (501(c)3)Governed by a Board of Directors

• Representation from industry, regional government, defense community and academia• Board members invested in VLRC success

• 15 members • Nominating committee with outside consulting support

E t bli h B L• Establish By-Laws, • Establish Task Forces to

• Hire Executive Director,• Coordinate financing facilities research education• Coordinate financing, facilities, research, education and industry engagement • Establish a membership structure• Develop industry and research advisory groups

Policy and Processes

• Define Standard Operating Procedures• Personnel• AccountingAccounting • Project Management and Communications• Public Relations

Facilit Management• Facility Management• Intellectual Property Management Process• Process and Policies for interaction with DoD

Staffing• Executive Director• Executive Director

• Industry Experience• Proven record in collaborative partnerships• Reports directly to BOD with high degree of autonomy

• Director of Business Development• Director of Research• Director of Education*

G t/ ilit Li i *• Government/military Liaison*• Industry Liaison*• Operations Manager• Administrative Staff• Administrative Staff

* Potential in-kind support from member organizations

Market Identification

T t M k t (V l P iti f h)• Target Markets (Value Proposition for each)• Industry (absolutely key to success)• Regional Government Agencies• Academic Institutions• Academic Institutions• DoD

• Capturing Relationships• Focused Networking: Field Forums, EconomicFocused Networking: Field Forums, Economic

Development Events, Business Groups• News and Information Dissemination• Tours and Showcase Events• Sponsored Events

Research

•Short Term Focus (2 Years)• Defense Systems Gap Analysis• Regional Impact and Options Study• Regional Impact and Options Study• Application of Existing Transportation

Impact Data to Industry Challenges

• Long Term Focus (5 Years)• Medical Transport and Distribution for p

Veterans Administration• Tracking and Response Systems for

Homeland SecurityHomeland Security

Financial Strategies

Near Term (12 Months)Public Funding

Short Term (Two Years)Grant FundingPublic Funding

- Initial Operations- Initial Research

Grant Funding- Bricks and Mortar- Technology

Strategic Term (5 Years)Private Funding

Long Term (5 Years)Project Funding

- Exploratory Research- Innovation Capacity

j g- Sustainability: Overhead- Growth Funding

Intellectual Property

- Information Rights CounselIntellectual Property Review- Intellectual Property Review Process

- Continuous Improvement Process

Facilities

- Linked with Ft Lee activities- Linked with Ft. Lee activities- Adaptable Space- Sponsored Areas in Facility

C ll b ti ki- Collaborative working areas

Recommendations

• Establish a 501(c)3 – Non Aligned Center• Appoint a proactive Board of Directors• Focus on Applied Research

E I d t A d i d• Engage Industry, Academia, and Government/Military – establish Industry and Research Advisory Groups• Identify and execute near term projects to• Identify and execute near term projects to demonstrate value• Initial Funding from Commonwealth, local government and stakeholdersgovernment, and stakeholders• Partnerships will be VLRC key to success• Establish VLRC as authoritative source for information, models, methods and research in , ,logistics

Discussion

William F Moore SESWilliam F. Moore, SESDeputy to the Commanding General

Perspectives on how VLRC d Vi i i th h A advances Virginia through Access,

Alignment, and Investment

Office of Research & InnovationBox 9212 Petersburg VA 23806

(804) 524-8989 ext 1114

1/13/2011 1

( )

O tliOutlineEconomic Impact of KTI ser ices and high Economic Impact of KTI services and high-tech manufacturingWhy a VLRC? Why a VLRC?

What is the link between KTI firms and R&D output?output?

VLRC and VA’s Strategy for R&D InvestmentSome reasonable expectations Some reasonable expectations

Results we can measure?

1/13/2011 2

Economic Impact of KTI pservices and high-tech manufacturingg

The world economy is dominated by global y y gvalue-added knowledge and technology-intensive (KTI) services and high-technology

$manufacturing. They account for nearly $16 trillion to the $54.8 trillion world economy.

- NSF Science & Engineering Indicators (2010)

1/13/2011 3

Why a VLRC?Why a VLRC? Fort Lee is the army’s knowledge

management center for high-technology t i i d t i t/ l i ti itraining and sustainment/ logistics services (representing $10.2 billion and 89,000 jobs).VLRC will provide university R&D resources VLRC will provide university R&D resources to grow KTI service industries involved in sustainment/logistics related health caresustainment/logistics related health care, third-party logistics services, and maintenance management.

1/13/2011 4

What is the link between KTI at s t e bet eefirms and R&D output?

CPD’s economic development strategy is aligned with NSF’s views on innovation as a key to competitivenessa key to competitiveness.

KTI firms rely on the results of R& D to innovate new productsinnovate new products.

R&D is a now recognized as capital investment It accounted for nearly 4 5%investment. It accounted for nearly 4.5% of real GDP between 1959-2002.

----NSF S&E Indicators 2008.NSF S&E Indicators 2008.

1/13/2011 5

VLRC and VA’s Strategy for R&D I (SCHEV)

gyR&D Investment (SCHEV) Goal 9: Improve Alignment between

Higher Education and the Commonwealth’s Workforce NeedsWorkforce Needs.

Goal 11: Enhance research through investment in Targeted Consortiainvestment in Targeted Consortia.

Goal 12: Enhance research through investment in Infrastructureinvestment in Infrastructure.

1/13/2011 6

VLRC and VA’s VLRC and VA s Strategy for R&D Investment

Develop a strategic roadmap that catalogs Develop a strategic roadmap that catalogs all R&D assets and activities, particularly those related to federally funded research yand aligns …..additional R&D investments.

Establish an emerging technologies fund g g gas a vehicle for recruiting eminent faculty, acquiring research-related equipment,

i li i i t ll t l t dcommercializing intellectual property and providing seed-stage funding.

G B b M D ll ( )--Gov. Bob McDonnell (Higher Ed Opp Act of 2011)1/13/2011 7

R bl E t tiReasonable Expectations Expected payoff should leverage Expected payoff should leverage

investment VLRC must concentrate sufficient talent VLRC must concentrate sufficient talent

to satisfy expected value propositions Sensible legislative process……..simple Sensible legislative process……..simple

majority vs. 2/3rd majority VLRC must impact baseline measures for p

economic development activity

1/13/2011 8

Results we can measureResults we can measureJo rnal P blications Journal Publications

Funding (Research Expenditures)P t t Patents

Licensing from Patents New companies spun off from patents

1/13/2011 9

Questions?

1/13/2011 10

A I d t P tiAn Industry Perspective

The First Question

What is the Value Propositionandand

the Return on my Investment?

Examples: FedEx – University of TennesseeUPS – Georgia TechUPS – Georgia TechWal-Mart – University of Arkansas

(Supply Chain Management Research Center)

Defining Industry Partners

• Manufacturing (Rolls Royce)

• Warehousing / Distribution / Transportation • (Owens & Minor)

• Government / Defense Companies (LMR)

Each with:Each with:Common challengesDifferent perspectivesVarying resources y g

Challenges:• Limited Research ResourcesLimited Research Resources• Constrained Organizations• Operational Focus• Costs/ROI Industry Input:Industry Input:

• Practitioners• Real problems• Operational Focus• Impacts of Future Business Trends

VLRC:• Shared Resources• Shared Resources• Theory to application • Venue for information and

educational exchanges

Build a Business Plan that:Build a Business Plan that:• Clearly defines the Value Proposition and ROI

S li it t l h i• Solicits actual research issues-Demonstrate the value of a Research Center

• Taps into more Industry Partnersp y-Variety of Industry Partners

• Acknowledges tiered membership -Range of organizational resources-Range of organizational resources

• Insures Intellectual Property Rights

“Improving Competitiveness i Gl b l E ”in a Global Economy”

Mission

• Provide transformational improvements in advanced manufacturing technologies

– Reduce cost

– Improve quality

– Reduce time to market

• Bridge the gap between fundamental research and commercialization

– Accelerate technology into markets

– Demonstrate technology on real problems

• Foster collaboration among diverse industry sectors– Directed Research for the exclusive proprietary benefit of an individual member

h f h b f f ll b– Generic Research for the benefit of all member companies

• Lower the cost of research and development for member companies

– Shared facilities and personnel

– Shared pre‐competitive researchShared pre competitive research

• Train the next generation of technology leaders– Provide market ready experience to students

– Connect industry with students

Vision

• A global Center of Excellence in advanced manufacturing

– Creating new technologiesg g

– Enabling new products

– Fostering collaboration across industry sectors

• A foundational component of the larger vision for an Advanced Manufacturing

Shipbuilding

Transportation

vision for an Advanced Manufacturing Innovation Zone (AMIZ) in Virginia

– Expanding research capability

– Workforce training 

– Economic development engineEnergy

Economic development engine

• CCAM growth in 10 years to:– 49 full‐time resident PhD‐level research staff 

members

– 35 graduate research assistants resident at

Aerospace

35 graduate research assistants resident at CCAM

– 35 undergraduate interns resident at CCAM

– More than 30 Industry Members

– Sustainable and diversified research portfolio 

Electronics

Automotivepfrom industry and federal sources totaling more than $16 million per year

Automotive

Defense

Advanced Manufacturing Innovation Zone

• Academic research

• Industry partners• Applied research

UNIVERSITY OWNED UNIVERSITY OWNED & OPERATED& OPERATED

UNIVERSITY LEDUNIVERSITY LED

• Academic research • Corporate engine testing

• Magnet for supply chain

Applied research• Build sustained competitiveness across multiple industries

Commonwealth Center for Ad d T t C ll VillAdvanced 

Manufacturing (CCAM)

Test Cell Village

• Flow cell laboratory• Advanced Manufacturing

Manufacturing & Engineering Career Center

Factories at Crosspointe Site

INDUSTRY OWNED INDUSTRY OWNED AND OPERATEDAND OPERATED

COMMUNITY COMMUNITY COLLEGE LEDCOLLEGE LED

• Applied research• Innovative, multi‐faceted curricula

• Operational Q1 2011• High performance computing for modeling & simulation

Governance

• Multiple levels of membership– Organizing Industry Members– Organizing University Membersg g y– Tier 1 Industry Members– Tier 2 Industry Members– Academic Members

• Board of DirectorsE t bli h ll li i– Establishes all policies

– Approves budgets– One member from each Organizing Member– Chair of Industrial Operations Board is a member

• Industrial Operations Board– Provides oversight of day‐to‐day operations– One member from each Tier 1 and Organizing Member– One member elected by Tier 2 Members– One member from each Organizing University Member

• Technical Advisory Board• Technical Advisory Board– Establishes technology roadmap– Creates research agenda– One representative from each member organization

Funding Model

Tier 2 Fees G iAll Members have non-

GenericResearch

exclusive, royalty-free license to IP from Generic Research 50%

DirectedTier 1 Fees

Tier 1 Members willDirectedResearch

Tier 1 Members will own IP generated from the Directed Research that they sponsor.

50%

OtherResearch

Federal Funding ResearchFunding

Organizing Industry Member Terms

• Commit to an annual membership fee– $400,000 per year due in January beginning in 2011

– Five year commitment

• Provide partial support of start‐up costs– Provide cash start‐up funds of $150,000p $ ,

– Contribute an in‐kind donation valued at $500,000

• Assist in recruitment of two additional members

di h O i i b l• Dedicate one person to the Organizing Member Team to plan and implement CCAM

• University Organizing Members assume financial riskUniversity Organizing Members assume financial risk– Facility owned and financed by the University of Virginia Foundation

– CCAM bridge loans (up to $500,000) provided by the Universities

– Universities participate equally in start‐up funding ($150 000 each)Universities participate equally in start‐up funding ($150,000 each)

Financial Plan

• 10‐year plan for growth– 5 Organizing Members– 5 Organizing Members– 12 Tier 1 Members in 10 years– 18 Tier 2 Members in 10 years

• Diversified revenue stream$8 5 illi i l b f

Revenues and Expenses

$

$16,000,000

$18,000,000

– $8.5 million in annual member fees– $7.2 million in annual external funding

• Generic Research support– $5.4 million annually in 10 years $8,000,000

$10,000,000

$12,000,000

$14,000,000

Total Revenue

Total Expense

Research Expense

General Expense

– Funding decisions made by members

• Directed Research support– $5.8 million annually in 10 years– Funding decision made by each member $-

$2,000,000

$4,000,000

$6,000,000

FY FY FY FY FY FY FY FY FY FY

p

Net

g y

• Federal research support– $4.5 million annually in 10 years– Contributes $1.35 million to indirect costs– Creates new technology of value to CCAM

$(2,000,000)

FY2010

FY2011

FY2012

FY2013

FY2014

FY2015

FY2016

FY2017

FY2018

FY2019

Fiscal Year

Creates new technology of value to CCAM

Research Agenda

Value Proposition

• Shared resources– Facilities

Research staff– Research staff– Research equipment

• Unique intellectual property policy– Member owned Directed Research– All members share intellectual property that is jointly funded 

as Generic Researchas Generic Research• Focus on translational research

– Understanding of fundamentals– Solution of industry problems– Transfer of technology

B id i th b t h d i li ti– Bridging the gap between research and commercialization• Industry/University collaboration

– Industry directed and university executed research program– Industry / University partnerships on government projects– Access to world class universities

• Workforce training and development– Students graduate with industry relevant experience– Students work on industrial scale equipment

Current Status

• CCAM formed as a corporation

• Initial Organizing Members– Canon Virginiag

– Northrop Grumman (Shipbuilding)

– Rolls‐Royce

– Sandvik Coromant

– SiemensSiemens

– University of Virginia

– Virginia Tech

• Aerojet is the first Tier 2 member

l h d ( h l )• Initial research project underway (thermal spraying)

• Search firm engaged to hire Executive Director– Interviews in December with selection by end of January

• CCAM facility development underwayy p y– 20 acres of land transferred to UVA Foundation by Rolls‐Royce

– Perkins + Will hired as architectural and engineering firm

– Initial program plan and design for facility completed

• Member recruitment strategy and process ongoing• Member recruitment strategy and process ongoing

• Faculty hiring, lab renovations, and research underway at Universities

Key Business Plan Milestones

QTR 1 QTR 2 QTR 3 QTR 4 QTR 1 QTR 2 QTR 3 QTR 4

2010 2011

QTR 1 QTR 2QTR 1 QTR 2 QTR 3 QTR 4 QTR 1 QTR 2 QTR 3 QTR 4

OIM Marketing Tier 1 / Tier 2 Marketing

Hire

QTR 1 QTR 2

UniversityDay

AirShow

5 OIMsCommitted

Building Design Building Construction

Hire Marketing

FirmMembership

Fees Paid

u d g es g u d g Co st uct o

CCAM Groundbreaking

CCAMOpens

Begin Hire Research

Conduct Research Projects

CCAM Corporation

Created

Executive DirectorSearch

Executive Director

Roadmap Created

Business Plan

Created

Facility

52,000 ft2 two story state of the art building • Office, conference, lab, and high bay facilities • Site layout and building designed for expansion

View from Parking lot

View from northeast Interior lobby

Confidential Information ‐ Not for Distribution

Expansion Plans

Additional acreageavailableavailable

Career Center

High Bay Expansion

Career Center

Confidential Information ‐ Not for Distribution

Questions and Contacts

Barry W. JohnsonAssociate Dean

Donald J. LeoAssociate Dean

University of Virginiabwj@virginia.edu

Virginia Techdonleo@vt.edu

Next Steps

Defining the path forward…….

1/13/2011 1

N SNext Steps……. Commit to the VLRC vision and examine

the opportunity.F li th ll b ti b t Formalize the collaboration between stakeholders and associates.Commit to a Business Plan/ Innovation Commit to a Business Plan/ Innovation Strategy.Establish a Timeline Establish a Timeline.

1/13/2011 2

Commit to the vision and Commit to the vision and examine the opportunity

Leverage R&D assets and activities related to Leverage R&D assets and activities related to KTI sustainment and 3rd party logistics services.

SCoE and DLA for The Global Superpower. World-class university with capability to align World class university with capability to align

multi-university partners for innovation in KTI sustainment and 3rd party logistics services.

Industry partners at the forefront of KTI sustainment and 3rd party logistics services.

1/13/2011 3

Formalize the organizing Formalize the organizing Partnership

Sign-off on a memorandum ofSign-off on a memorandum of understanding (MOU) that:

(a) Defines shared governance(a) Defines shared governance (b) Commits start-up dollars where applicable( ) Sets timelines for pooling resources(c) Sets timelines for pooling resources

where applicable(d) Commits to recruiting/ marketing support(d) Commits to recruiting/ marketing support(e) Agrees to provide dedicated resources to

help organize VLRChelp organize VLRC

1/13/2011 4

Commit to a Business Plan/ I i SInnovation StrategyPro ide reso rces to de elop and follo aProvide resources to develop and follow aBP/ Innovation Strategy that:

Li k th i i t l itia) Links the vision to a value proposition.b) Sets a research agendac) Identifies facilitiesd) Establishes a financial plane) Establishes the Governance Structure

1/13/2011 5

A P d Ti liA Proposed Timeline Commit to the vision and examine the

opportunity………….Jan 18th 2011 Pool current R&D assets to seek federal grants

related to KTI sustainment and 3rd party logistics services Jan 18th 2011services…………….Jan 18th 2011

Develop and execute MOUs for organizing the VLRC May 2011VLRC…………………….May 2011

Approved Business Plan/ Innovation Strategy November 2011Strategy……………..November 2011

1/13/2011 6

Questions?

1/13/2011 7