Phone (888) 414-6682 

47911 Halyard, Plymouth, MI 48170-2461

Fax (734) 451-4201 / www.mmtc.org

August	1,	2013

Supply	Chain	M-TAC	Concept	Paper

Sector-specific	M-TACs	should	be	chartered	so	as	to	have	an	industry	group	identify	a	set	of	problems	

that	gate	the	performance	of	one	or	more	domestic	supply	chains	(supply	chain	defined	as	a	minimum	

of	three	tier	levels) and	then	to	contract	with	MEP	centers	to	perform	projects	with	SMMs that	help	to	

resolve	those	problems.		MEPs	centers	could	be the host.	 MEP centers should	be	M-TACs’ exclusive	

service	delivery	partner (though	centers	may	use	subcontractors,	as	needed). In	this	document,	we	

propose the	goals	and	governance	of	M-TACs	with	reference	to	the	automotive	and	aerospace	sectors,

but	our	design	principles	apply	to	all	sector-focused	M-TACs.		Past	MEP	supply	chain	efforts	have, in	

reality, been	supply	base efforts	– between	an	OEM	customer	and	one	or	a	few first-tier	suppliers,	and

have	suffered	from	a	one-size-fits-all	approach	and	by	competition	among	centers.		Our	proposed	

approach	addresses	these design	shortfalls.

We	propose,	for	obvious	reasons,	that	automotive	be	the	focus	of	an	M-TAC.	The	industry	directly	

(NAICS	codes	3361	and	3363) employs	more	than	800,000	of	the	nation’s	11.9 million	manufacturing	

workers.		Its	facilities	and	labor	force	are	heavily	clustered	in	two	regions:	

 Great	Lakes	region:	Michigan,	Indiana,	Ohio,	and	Illinois	together	host	342,000	jobs (42%	of	US	

total),	ranking	1,	2,	3,	and	5;	and

 Southeast	region:	Kentucky,	Tennessee,	South	Carolina,	and	North	Carolina	together	host	

126,000 (16%	of	US	total),	ranking	4,	6,	7,	and	8.

Four	other	states	– Wisconsin,	Missouri,	Georgia,	and	Alabama	– are	also	significant	automotive	states,	

together	hosting	nearly	70,000	jobs	(9%	of	US	total).		Georgia	and	Alabama	could	be	part	of	the	sector’s	

southeast	regional	cluster,	while	Wisconsin	and	Missouri	could	be	part	of	the	sector’s	Great	Lakes	

regional	cluster.

The	industry	has	an	acknowledged	lead	national	association,	the	Original	Equipment	Suppliers	

Association	(OESA),	located	for	obvious	reasons	near	Detroit.		OESA	has	access	to	product	planning	and	

purchasing	executives	at	member	OEMs	(including	all	US- and	non-US-based automakers),	and	Tier	

Ones.		It	is	a logical	host	site	for	an	automotive	M-TAC.		Another	possibility	would	be	The	Center	for	

Automotive	Research	in	Ann	Arbor.

However,	governance	of	the	M-TAC	cannot	be	vested	in	the	lead	association	alone.		The	goal	of	M-TACs	

should	be	to	help	select	and	fund projects	that	address	critical	problems	that	block	the	growth	and	

competitiveness of	additional	US-sited	production.	Because	this	is	not	necessarily	the	#1	goal	of	either	

auto	OEMs or	their	Tier	One	suppliers,	the	selection	of	supply	chain	problems	and	the	design	of	projects	

to	solve	those	problems	should	be	made	jointly	by	a	council	made	up	of	the	lead	association	as	the	MTAC	host	and	by	center	directors	chosen	so	as	to	represent	the	sector’s	SMM	supply	base	(e.g.,	1-2	

directors	from	each	of	the	industry’s	two	main	regional	concentrations),	with	center	directors	holding at	
Phone (888) 414-6682 

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least	51%	of	council	votes.		The	lead	association	host	would	bring	forth	a	list	of	supply	chain	challenges,

with	clear	measurable	goals with	which	to	evaluate	whether	the	challenges	are	being	met,	and	the	

council	would	select	from	that	list and/or	add	to	it based	on input	from	the	SMM	suppliers (relevant	

because	supply	chain	issues go	both	up	and	down	the	supply	chain).		Based	on	the	location	of	the	SMM	

suppliers	in	the	supply	chain(s)	experiencing	the	problem,	the	M-TAC	would	contract	with	one	or	more	

MEP	centers	to	work	with	the	SMMs	in	the	chain(s).		The	MEP center(s) would	be	contracted	to	

accomplish	a	goal	(e.g., increase	capacity	by	X	units,	reduce	new	product	time	to	market	by	Y days)	

without	dictating	any	particular	approach to	achieving the	goal.		(Many past	MEP	national	account

projects	have	dictated	the	process	and	even	the	tools	to	be	used	with	all	suppliers.)		

The	role	of	the	M-TAC would	be	to coordinate	and	manage	the	improvements	for	the	supply	chain	to	

ensure	that the	entire	supply	chain	achieves	the	defined	goal. Among	other	things,	this	would	prevent	

customers	and suppliers from	just	moving	problems up	or	down	the	supply	chain,	as	when	an	OEM	tells	

its	suppliers	to	hold	just-in-case	inventory.	 In	this	role,	the	M-TAC would	coordinate	efforts	between	the	

MEP centers participating	in	a	given	supply	chain	problem	resolution	effort.	 The	MEP centers	would	

manage	the	improvements	at	the	SMM and	between	the	SMM and	its suppliers.		The	M-TAC and	the	

MEP	centers	would	work	together	to	bring	in	new	technology	and	commercialization	tools	where	and	

when	necessary	to	achieve	the	defined project	goals.		The	budget	model	is	that	a	maximum	30%	of	the	

program’s	funding	would	go	to	the	host	organization	for	staffing,	outreach	to	OEMs	and	Tier	Ones,	and	

overhead,	while	70%	would	be	made	available	to	provide	a	50%	cost	share	for	MEP	center	projects with	

SMMs	in	the	supply	chains	experiencing	problems.		The	30%	going	to	the	host	would	require	no	

matching	funds,	while	the	70%	flowing	to	centers	would	require	a	1-to-1	match.	 Thus	a	$1	million	MTAC	would	result	in	supply	chain-member	SMMs	paying	MEP	centers	$700,000 of	a	total	budget	of	$1.7	

million.

In	aerospace,	the	model	could	be	much	the	same.		The	industry’s	496,000	workers	(NAICS	3364)	are	

concentrated	in	eight states,	though	in	somewhat	less	intense	regional	agglomerations	than	is	the	case	

in	automotive:

 Washington,	California,	New	Mexico,	and	Arizona together	host	213,000	jobs	(43%	of	US	total),	

ranking	1,	2,	4,	and	6;	and

 A	much	less	geographically	cluster	set	of	four	states	– Kansas,	Connecticut,	Florida,	and	Alabama	

–together	host	93,000	jobs	(19%	of	US	total),	ranking	3,	5,	7,	and	8.

As	in	auto,	there	is	a	lead	national	trade	group,	the	Aerospace	Industries	Association	(AIA).		AIA	could	

host	that sector’s	M-TAC	and	be	part	of	its	council,	with	AIA	and	MEP	center	directors	developing	and	

selecting	from	a	list	of	supply	chain	challenges.		As	in	auto,	the	aerospace	M-TAC	would	then	contract	

with MEP	centers	for	1-to-1-funded	projects to	address	those	challenges.

In	auto,	aerospace,	and	other	M-TAC	sectors,	to	ensure	against	self-dealing	by	centers	with	directors	on	

the	sector’s	council,	the M-TAC and	its	council	would	select	the	centers	whose	project	work	was	to	be	

50%	funded	based	on	the	location	of	the	SMM	suppliers	in	the	supply	chain	in	which	projects	would	be	

undertaken.		To	ensure	that	associations	hosting	M-TACs	do	not	use	funds	to	support	their	OEM	and	
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Tier	One	members,	only	companies	(not	establishments)	with	500	or	fewer	employees	would	be	eligible	

for	supply	chain	projects	benefiting	from	M-TAC	funds.		

Our	approach	does	not	prejudge	the	content	of	supply	chain	projects,	or	dictate	how	or	by	which	MEP	

centers	these	projects	will	be	performed.		M-TAC	host	organizations	will	be	accountable	to	the	federal	

funder	and	measured	by	a	consistent	national	M-TAC	measurement	system:

 The	hosts’	performance	will	be	measured	by	the	number	and	dollar	value	of	supply	chain	

projects	identified	by	the	host	and	executed	by	MEP	centers.		A	$1-million	M-TAC	will	be	

expected	to	spend	$700,000	toward	$1.4	million	in	MEP	center-managed	projects	tied	to	the	

identified	supply	chain	problems.

 The	performance	of	MEP	centers	executing SMM	projects	to	address	M-TAC-identified	supply	

chain	projects	will	be	measured	by	the	impacts	reported	by	the	SMMs	completing	such	projects.		

The	existing	survey	process	could	be	used	for	this	purpose.

Michael	J.	Coast

MMTC	President