“ The Future of Logistics in the Richmond Region ”

1. “The Future of Logistics in the Richmond Region” A Framework for Collaborative Logistics Research Michael S. Williams Chief Operating Officer Logistics Management Resources, Inc.

2. Main Topics • The Future of Logistics in the Richmond Region: Getting to the Tipping Point • Commonwealth Center for Advanced Logistics Systems

3. Agenda • Background • Future of Logistics Report • Commonwealth Center for Advanced Logistics Systems • Next Steps • Concluding Thought • Discussion

4. Background • Logistics • Management and compliance of the flow of resources from origination to consumption • Integration of technology, processes, policies, and people to accomplish the goals • Virginia is a hub of logistics • Fort Lee is the home of the Army Logistics University • Fort Belvoir is the home of the Defense Logistics Agency (DLA) • Richmond is the home of the DLA – Aviation • Port of Virginia offers the deepest shipping channels on the U.S. East Coast • On-dock rail service makes the port a true multi-modal transportation hub • Panama Canal expansion enhances Virginia’s position as a hub • Virginia’s universities provide expertise critical to logistics systems • Business – supply chain management, currency exchange issues, contract management • Engineering – process modeling/optimization, risk management, security, human factors • Public policy – compliance, export control, taxation, infrastructure investments • Workforce – STEM degree programs, certificate programs, interns • Central Virginia can and should be a leader in the future of logistics • Focal point is needed to bring public and private entities together • Commonwealth Center for Advanced Logistics Systems (CCALS) provides the solution

5. The Future of Logistics in the Richmond Region: Getting to the Tipping Point Report of the Logistics Task Force of Richmond's Future Chair: Dr. Keith Miller President Virginia State University October 27, 2012

6. Strategic Mid-Atlantic Location

7. Regional Features • “Logistics is a business sector that links the entire Metropolitan area, from Hanover to Richmond to Dinwiddie • The logistics Industry can provide substantial employment opportunities across a large (number) of occupations….. • Logistics is a business sector that can link the Richmond region to the increase in global trade………”* *(Future of Logistics…, page 5)

8. The Tipping Point • Central Virginia’s Strategic Location • Existing / New Logistics Enterprises • Army’s Sustainment Center of Excellence- Fort Lee • Ports / RIC • Complementary Initiatives • Development of the Port of Richmond • Creation of CCALS • Amazon facilities • Creation of the Army Logistics University

9. Commonwealth Center for Advanced Logistics Systems

10. History of the CCALS • 2005 BRAC impact –Fort Lee –November 2005 • HR 487- July, 2007 recognized modeling and simulation as a national critical technology • VLRC Feasibility Study - May 2009 • Strategic Plan for VLRC – July 2010 • Strategic Plan briefing to CPDC Executive Committee – August 2010 • Key Stakeholders meeting at Fort Lee – January 18, 2011 • Core Team planning retreat held at VSU – April 14-15, 2011 • Core Team planning retreat at Longwood U (Business Plan) – June 15, 2011

11. Concept Technology Readiness Levels (TRLs) 1 Through 9 New Logistics Products and Services New Ideas 8 9 6 7 2 3 4 5 1 1 2 3 4 5 6 7 8 9 Product Development and Commercialization Basic Research and Technology Creation Application Development and Proof of Concept University Partners CCALS Member Companies CCALS will transform businesses through a collaboration that bridges the gap between research and commercialization to accelerate delivery of new innovations and skilled workers to the logistics industries

12. Mission • Bridge the gap between research and commercialization • Accelerate solutions into the market • Solve industry-defined problems • Foster collaboration between diverse industry sectors • Directed Research for the benefit of an individual member • Generic Research for the benefit of all members • Create transformational improvements in logistics systems • Reduce cost and time to market • Improve quality • Lower the cost of applied research for member companies • Shared facilities and personnel • Shared pre-competitive applied research • Train the next generation of technology leaders • Access skilled workers with industry experience and students with industry-defined skills • Connect industry with students

13. Industry Led Governance Model Board of Directors Industrial Operations Board Executive Director Technical Advisory Council Executive Assistant Director of Research Other Staff Directors as Needed Research Staff Members • Virginia Non-Stock Corporation • All founders are equal partners • Easy access to each university • Multiple Levels of Membership • Organizing Industry Members • Organizing University Members • Tier 1 and Tier 2 Industry Members • Academic and Government Partners • Board of Directors • One member from each Organizing Member • Chair of Industrial Operations Board is a Member • Industrial Operations Board • One member from each Organizing and Tier 1 Member • One member elected by Tier 2 Members • Technical Advisory Council • Creates technology roadmap defined by industry needs • One representative from each member

14. Value Proposition • Shared resources • Lower R&D costs through shared funding of Generic Research • Lower risks by connecting industry problems with new ideas • Leverage government funding through Collaborative Research • Novel intellectual property policy • Own results of Directed Research • Access at no cost results of Generic Research • Industry directed applied research program • Reduce time to market by focusing research talent on industry problems • Provide a trusted environment for industry to share common problems • Provide an easy connection to strong talents in the Universities • Access to workforce • Access students with industry defined skills • Assess students through internships and project participation

15. Core Competencies • Large scale logistics systems • Supply Chain system dependability, reliability, security and trust • Human factors in logistics (demographics, workforce, behaviors and processes) • Supply chain and risk management • Logistics system modeling and simulation • Large scale data management, integration and analytics • Enterprise systems integration, application and customization

16. Initial Partners • University • Longwood University • University of Virginia • Virginia Commonwealth University • Virginia State University • Defense Community • Sustainment Center of Excellence (Fort Lee) • Army Logistics University • Defense Logistics Agency – Aviation • Public Sector • Virginia Economic Development Partnership (VEDP) • Crater Planning District Commission (CPDC) • Industry • Logistics Management Resources (LMR) • Logistics Management Institute (LMI) Longwood University

17. Funding Model Applied Research Portfolio Directed Research Defined by Member IP owned by Member 50% of Fee Annual Fee Defined by Members IP owned by CCALS 50% of Fee Generic Research CCALS Member Companies Collaborative Research Additional Member Funding Defined by Sponsors Sponsors Define IP Rights Federal Sponsors Federal Funding

18. Workforce Development Education and Education and Community Community K K - - 12 12 Universities Universities Workforce Workforce Training Training Colleges Colleges Schools Schools Pipeline Pipeline Curricula Curricula Training Centers Training Centers Workforce Workforce Advanced Advanced Manufacturing Logistics Readiness Readiness Industry Industry Levels Levels Future Jobs Future Jobs CCAM CCALS CCAM CCALS Assessment Assessment and Required and Required Workforce Workforce Industry Industry Methods and Methods and Skills Skills Team Team Members Members Analysis Analysis Global Global Standards Standards and Best and Best Practices Practices

19. Next Steps • Develop business plan Completed • Secure state financial support Completed • Appoint Initial Executive Director Completed • Develop branding platform Completed • Create CCALS as a legal entity Completed • Sign initial organizing members Completed • Launch website Completed • Develop initial research roadmap January 2013 • Sign next 2 organizing members June 2013 • Sign first Government Associate June 2013 • Develop plan for facility June 2013 • Initiate research programs January 2014

20. Concluding Thought CCALS has been designed to provide transformational improvements in logistics systems that reduce costs, improve quality and dependability and reduce time to market……..CCALS members work together in…… Defining the Problem Connecting with Top Talent Owning the solution Sharing the costs

21. Commonwealth Center for Advanced Logistics Systems www.ccals.com