RAND seeks corporate sponsors for supply chain research
The rising importance of supply chain management and logistics to the national economy and society have prompted the RAND Corp. to step in and fill what it believes is a public policy void for dealing with goods movement in a comprehensive manner, Martin Wachs, director of the organization's new Supply Chain Policy Center, said Thursday.
RAND, which is considered the original think tank when created in 1948 to do outside research and development for the U.S. Air Force, has studied transportation, supply chain security and related issues for many years, but decided to formalize its approach and pull together disparate research groups into one policy center, according to RAND officials.
The Santa Monica, Calif.-based research firm introduced the new Center to journalists, congressional staff and industry officials at a kickoff ceremony on Capitol Hill. The briefing was followed by a roundtable discussion on international supply chain issues.
Wachs said that policymakers need rigorous analysis to inform decision-making because global supply chains will increasingly come under national and international scrutiny for their impact on daily lives and trans-national economic trends. Growth in international trade, congestion, environmental and safety concerns, energy prices and security measures are making it more difficult to transport freight efficiently. To date, the logistics industry has been marked by low levels of research and development compared to other sectors.
The Supply Chain Policy Center will address issues in an intermodal fashion; deal with environmental, security and risk management issues that effect supply chain operations; help define the roles of the private and public sectors in freight transportation; and help provide understanding of complex institutional factors, such as labor, that help shape the logistics environment, Wachs said.
RAND hopes to serve as a forum to bring together retailers, manufacturers, carriers and others with shared interests in supply chain management to develop ways to improve industry efficiency, he said.
The Supply Chain Policy Center is organized as a membership-based organization. RAND is inviting companies, trade associations and institutions to become sponsors. Founding members include Dow Chemical, the Port of Los Angeles, the U.S. Chamber of Commerce, NYK Line subsidiary Japan Marine Sciences and the UPS Foundation. In exchange for annual dues, members help set the Center’s agenda, disseminate and use its findings, and participate in public events to discuss the work.
Membership costs $75,000 per year over a three-year commitment. Organizations can participate at a lower level for $35,000 per year, which includes briefings on Center research and invitations to RAND symposia.
'We want a broad cross section of industry,' Wachs said.
As the nation's sixth largest exporter, Dow has a vested interested in improving supply chain performance. The company moves 100 billion pounds of material at a cost of $3 billion per year.
'Our logistics costs in moving chemicals cost more than our conversion production costs,' Cindy Elliott, supply chain sourcing director for Dow, said. 'Our logistics costs have not gone down [in contrast to the economy at large]. We see congestion as more of a burden to our profitability and that's why we're so interested in the research around this.'
Before joining RAND last year, Wachs was professor of civil and environmental engineering and city and regional planning at the University of California, Berkeley. He was director of the Institute of Transportation Studies at Berkeley for six years. He previously spent 25 years at the University of California, Los Angeles, where he served three terms as chairman of the Department of Urban Planning. He acknowledged afterwards that he is still getting his feet wet when it comes to learning about the intricate web of logistics relationships that make up the global supply chain.
The Center recently was informed it has been funded to conduct a study on the resiliency of the supply chain, he said. Other research topics on tap include:
* Infrastructure finance.
* Rail capacity needs.
* Mitigating highway congestion.
* Environmental mitigation at ports.
* Sustainability of the global supply chain.
* Airport congestion and air freight strategies.