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Navigating Global Business and Supply Chain Management in the Middle Market
744 Plays6 months ago
Joining us for today’s episode is Mike Knemeyer, a professor at The Ohio State University Fisher College of Business and Academic Director of the Center for International Business Education and Research (CIBER) at Ohio State. We unveil key findings from our latest research report that highlight the financial advantages, challenges, and strategies for navigating the complexities of global markets while showcasing the importance of embracing international opportunities and leveraging available resources to drive growth.
CIBER at The Ohio State University is a national Center of Excellence that seeks to promote international business education and research and enhance U.S. business competitiveness in the global marketplace. The Ohio State CIBER works to expand global trade, resolve supply chain and logistics challenges, and build talent pipelines.
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Transcript
Introduction and Purpose of the Podcast
00:00:04
Speaker
Welcome to The Market That Moves America, a podcast from the National Center for the Middle Market. The center is the leading source of knowledge, leadership and innovative research on the middle market economy. Throughout our podcast, we will feature middle market leaders and stakeholders to hear their real world perspectives on trends and emerging issues. Middle market businesses often play important roles in the supply chains of other companies.
00:00:29
Speaker
But is that largely a domestic issue or do these businesses operate on a global scale? We wanted to explore that.
Key Partnerships and Study Focus
00:00:37
Speaker
So the National Center for the Middle Market partnered with Ohio State's Office of Global Business and Cyber to conduct a new study on global supply chain management in the middle market.
00:00:49
Speaker
We won't be talking about technology, data, or security, as CIBER is an acronym that stands for Center for International Business Education and Research. And I'm pleased to be talking with Mike Knimeyer, Fisher College faculty member and academic director for the CIBER. Welcome to the Market That Moves America. My name is Doug Farin, managing director for the National Center for the Middle Market located at The Ohio State University Fisher College of Business.
00:01:18
Speaker
Today's episode is going to be a bit about global business, a bit about supply chain management, a bit about the education process. The NCMM recently partnered with the Fisher College of Business, Cyber, and we're going to talk a little bit more about what that means.
00:01:40
Speaker
And here to discuss that with me today is Dr.
Expert Insight from Dr. Knimeyer
00:01:45
Speaker
Mike Keneemeyer. Mike is an Ohio State professor here at the Fisher College of Business and also serves as the Academic Director of the Center for International Business Education and Research. That is what the cyber acronym stands for. So, Mike, welcome to our podcast.
00:02:04
Speaker
Great to be here and excited to talk with you about this important topic. As you mentioned, I'm a professor in logistics and I serve as the academic director for the Cyber Center for International Business Education and Research. My undergraduate degree is from John Carroll University up in Cleveland and I earned my doctorate from the University of Maryland.
00:02:25
Speaker
In terms of some industry experience, I've worked in positions with Anikster Brothers, who's a distributor of electrical products up in Solon, Ohio, and I also work for CSX, which is a US rail company that a lot of people are familiar with.
00:02:39
Speaker
I've also worked at a couple other universities over the years since I graduated from Maryland, but I'm really proud to say that I'm going on 20 years. This is my 20th year at Ohio State. My current research areas are in the areas of supply chain relationship management, and that's probably my primary differentiator in terms of my research. That's what I've been doing since my dissertation. I'm also working on enhancing supply chain resilience, and that's been largely driven by some activities with my doctoral students.
00:03:10
Speaker
One other thing I'd like to mention in my introduction is born and bred Buckeye. I was actually born on campus over at our outstanding medical center and I like to say being a Buckeye is in my blood. So again, it's great to be here with you today and I'm excited to talk to you about this topic.
00:03:27
Speaker
Yeah, thanks. So let's start with the very first question, which I know I get a lot of questions about this. Can you describe exactly what is cyber? Because I know CIBER is the acronym. When I reference it just in conversation, people immediately think of cybersecurity or something to do with technology, but it's not that. So first of all, can you just tell us about what cyber is?
00:03:55
Speaker
Yes, it's something I have to explain all the time also, and you're right. While we are not C-Y-B-E-R, we do talk about cyber issues across the globe, but cyber is a competitive federal grant. They are administered by the U.S. Department of Education.
Funding and Strategic Advantages
00:04:16
Speaker
DOE does is they award a slight number of these grants to universities across the US to hopefully increase our country's international competitiveness. That's the goal of the program. In fact, there's only 16 cybers across the US, and we were the only new cyber that was awarded in this last granting period. Fisher Cyber was awarded $1.2 million distributed over the four years of the grant.
00:04:43
Speaker
And with that funding, we are implementing 46 unique international business focused initiatives. We're focused on serving students, faculty, businesses of all size, including middle market firms, as well as the larger workforce across our region. You know, each university that receives a cyber grant is
00:05:04
Speaker
is supposed to leverage their distinct strengths and then we as a network hopefully are a very strong entity for the United States. And one of the things that differentiates our cyber from other universities is that we have the National Center for the Middle Market right next door to the Office of Global Business.
00:05:23
Speaker
So as we were thinking through the grant proposal and thinking about how we might build a winning proposal, we definitely wanted to include the NCMM in that as a point of distinction for us. And we built one of our four guiding themes of our center around this connection. And we're very pleased that we did that because we do feel like it was a differentiator for us. The other themes in our proposal were built around exploring global trade,
00:05:51
Speaker
resolving global supply chain and logistics challenges, and building talent pipelines. As you can tell from my mentioning of the NCMM and some of the themes that are highlighted as other parts of our proposal, this relationship with your organization was an integral part of what we wanted to accomplish as a cyber. One outcome of this partnership has been this research on international supply chains for middle market firms, which I'm really excited to talk to you about today.
00:06:21
Speaker
Yeah, that's really important to mention all those things. And on behalf of the NCMM, I mean, anytime we have the chance to explore these topics on behalf of middle market companies,
00:06:37
Speaker
it certainly creates a lot more awareness and creates certainly based on survey data, some data-driven insights. Maybe Mike, maybe you could talk a little bit too about just the overall lack of research on midsize companies. I mean, I know that's something that our center tries to do, but even within academic circles, I'm sure middle market isn't maybe one of the top areas that are typically studied in research.
00:07:05
Speaker
Yeah, it really is an underappreciated part of our economy and a very critical part of it. I've been very lucky being at Fisher and having been connected even prior to my role with cyber, with doing research for the NCMM over the years.
00:07:23
Speaker
and really gain an appreciation for the distinctiveness of this segment and the importance for our economy. So yeah, I'm hoping that through our efforts jointly and getting our research out there that more faculty will be interested in doing some specific research in this area.
00:07:43
Speaker
Yep, yep, agreed. So you just touched on the fact that that both of these centers, the NCMM, the cyber and even the Office of Global Business here at the college are really important in driving research and knowledge. Just tell us about the overall importance of the need for more international business research.
The Importance of International Research
00:08:04
Speaker
Well, the world is a more connected place today. It's more connected than it's ever been before. We have technologies that are making it much easier to conduct business internationally. We can collaborate across borders. While globalization has had been a topic of discussion recently, in my opinion, it's here to stay. It's going to change. It's going to evolve like everything evolves. But it's part of what doing business in the world today is about.
00:08:34
Speaker
So the question is for companies and whether it's a middle market company or another another company is is is not if you should participate in international markets, but more importantly how to participate in these markets, you know, so Fisher-Sauber You know it is is is really critically important to allowing us to do international business research into areas that companies are are
00:09:00
Speaker
going into today that are navigating challenges that they're facing in their global supply chains, pressures on their labor markets, lack of talent, trends in the markets, things like technologies that are emerging and how it's going to affect international business. You think about blockchain and AI.
00:09:19
Speaker
So the cyber network that I'm part of and our center is part of is really hoping to support small and medium-sized business firms seeking to develop overseas markets. And our network strives to develop educational programs. We do export training. We collect market information. We try to build out response strategies to international competition.
00:09:43
Speaker
We like to fund projects, do events. We had Katherine Tai, the US Trade Ambassador come talk to Fisher. We like to put out publications around key issues in this international area. And this research is one of those things that we've definitely highlighted as part of our efforts. In the last five years, this global business environment has changed dramatically. And the research really needs to keep up with that.
00:10:12
Speaker
We're hopeful that the cyber here at Ohio State is going to help provide new insights and intelligence for companies that are facing these changing business rules that are out there.
00:10:22
Speaker
And I think the collaboration with the NCMM is really an excellent example of how we can create new business knowledge and get it out to the market quickly. It's one of the things I struggle with in academic research. It takes so long for those insights to get out to the market where I'm real happy with our research is very timely and is gonna be out there very quickly.
00:10:44
Speaker
Yeah, that's a great point. I mean, from the NCMM standpoint, a lot of the topics that we look at are related to growth. And the international opportunities are typically ones that have been maybe a little bit, not ignored, but the fact that there can be a little bit daunting and there's a lot of uncertainty. And so the fact that we can contribute some insights as to how these companies might
00:11:13
Speaker
address some of the risks and challenges that they're going to face should they choose to go to new international markets, I think is really important as these companies think about, particularly if they feel like they're tapped out here in the US and the domestic.
00:11:29
Speaker
market? What are some of the other options that they might have? With that, you were deeply involved in the design of the survey and the project itself. Could you spend a few minutes maybe walking us through the research findings and in particular, some of the key insights and things that stood out for you?
Addressing Middle Market Challenges
00:11:49
Speaker
Let me talk a little bit about how we conducted the research. I'd like to first of all thank you and the NCMM for being such a great partner on this effort. It's very refreshing to work so collaboratively with your team and work across groups to develop a research product that I really think is valuable for both of our constituents.
00:12:11
Speaker
So as we began thinking about the project, we both wanted to make sure that the research was focused on issues that were at the intersection of our two groups and connected across the goals of our two groups. We also wanted to make sure it was a current challenge that was being faced by US middle market companies.
00:12:29
Speaker
So I think after some deliberation and a couple of other ideas we floated, we ended up deciding to focus on building a better understanding of advantages, challenges, best practices involved with middle market companies operating international supply chains.
00:12:46
Speaker
And it seems like we're reminded daily of just how complex these international supply chains are and how they surround all types of business. And I think taking a closer look at this complexity through the lens of such an important segment of the U.S. economy made a great deal of sense for both of us.
00:13:05
Speaker
So while there are many different directions we could take the research, I think what we did was we prioritized this focus in and on the middle markets and supply chains and really understanding building upon your expertise with conducting these types of research studies with things such as the middle market indicator. I thought that, again, you bringing that expertise and those resources and us bringing that global business perspective really made for a great partnership.
00:13:35
Speaker
So we decided to conduct a national survey of middle market companies and we wanted to look at both companies that were selling products and also companies that were sourcing products internationally and depending upon these international supply chains. We thought both perspectives would provide interesting insights and also provide us a chance to compare across the two groups.
00:13:57
Speaker
So we've interviewed over 400 middle market supply chain leaders, decision makers. These are companies that are active in international supply chains. We gathered their insights on company performance, supply chain practices. We got their views on current landscape of international supply chain management.
00:14:17
Speaker
And the key insights emerged from the interviews. And we identified our report, five key themes from the data that we collected. And while I won't give you all the themes or won't talk to you about all the themes, I might highlight a couple if you want to.
00:14:34
Speaker
read about all the themes, you'd be sure to pick up the research report for the full story. I'll have to put a plug in for you to go to the websites and download the report. But I'll highlight a couple of the themes. One of the clear themes was that international supply chain delivers financial advantages for middle market companies.
00:14:53
Speaker
And you think about, when we talked to these middle market supply chain leaders, they said, revenue growth is a real financial benefit for their companies when they engage in these international activities. They also mentioned market expansion, gaining cost savings, and establishing a competitive advantage in their markets. And one of the other interesting things they mentioned, which I thought
00:15:21
Speaker
something I wasn't necessarily expecting was that these international sales activities actually help provide better support for their domestic customers. And that was an interesting insight from the research. Maybe two other themes I might highlight are related in the fact that they both relate to supply chain resilience.
00:15:43
Speaker
We found that international supply chains introduce a lot of complexities and risks, and these frequently will lead to disruptions. Middle market companies are also addressing these risks and really trying to recover quickly from these disruptions. Our data is showing that 68 percent of the purchasers and over 70 percent of the sellers have experienced some type of supply chain disruption in the last 12 months.
00:16:11
Speaker
These disruptions can be from geopolitics, natural disasters, production issues, distribution issues. But one of the things that I was heartened to hear was that even though they're facing these disruptions, most middle market companies we spoke to indicated these disruptions were only having minor impacts, that they were confident that their supply chains were very resilient. And again, these insights
00:16:37
Speaker
were something that we just hadn't heard because we don't typically hear that voice in the middle market.
00:16:46
Speaker
Yeah, and how timely too, given the recent tragic accident in Baltimore, obviously the lives lost and all of those things were terrible. And I just immediately thought to that being a perfect example of a disruption in the movement of goods and the trickle down effect that that's going to have across a number of different sectors that rely on that port.
00:17:13
Speaker
I think supply chain resilience, as a supply chain scholar, I'm very lucky to be at Ohio State, which has this long-standing logistics and supply chain program that's been built by some great professors over the years, Bud Lalon, Doug Lambert, Martha Cooper, and just continuing today with some really outstanding colleagues that I work with.
00:17:37
Speaker
And you're right, you kind of mentioned it sort of, you hate to be recognized when bad things are happening, but with all the things going on with COVID and more recently with some of the conflicts in Ukraine and Baltimore, the issues there, it really has brought a focus to supply chains. And what I love about my role at cyber is I can take this, my love for international business and combine it with my
00:18:05
Speaker
research interests in supply chain and look at some very interesting issues. Yeah, absolutely.
Skill Development for Global Operations
00:18:12
Speaker
Well, I know you didn't specifically mention it, but it's within the report, and I certainly encourage all of our listeners to go and read the full report. But in other studies that we've done across the middle market, whether it's about technology or different processes or functions or capabilities, I mean, really, at the end of the day, it's all about the talent and the workforce and the people that you have that are there to kind of drive and manage these things.
00:18:41
Speaker
And one of the findings showed that companies oftentimes hire, or they struggle to find people that have the right skill sets to work internationally. So Mike, what type of role do you think, you know, we're at a university, what do you think higher education can do to help solve or address some of those talent focused issues?
00:19:04
Speaker
Well, I think the report points out there's clearly a need for employees with technical and soft skills needed to conduct successful international supply chain operations and business. And this is an opportunity for programs such as, you know, cyber and the NCMM.
00:19:21
Speaker
to help meet those needs for US companies and US middle market firms. Language proficiency was one of the things that came out in the report as being particularly critical for international awareness and cultural competence. We've been actively working in our center and with other members of the cyber network to improve the preparation of our business students in these areas. It was nice to
00:19:45
Speaker
to see and not nice that there's still those needs. I'd hope that we were meeting those needs a little bit better than we probably are at the moment. But it is reassuring to see that some of the things that we've been working on are issues that the market firms have identified.
00:20:03
Speaker
So here at Fisher and more broadly at Ohio State and across the cyber network across this country, we're really trying to develop a set of initiatives to help students develop their global mindset. And this development of a global mindset is something that's specifically spelled out in our Fisher strategic plan. And it really serves as a guiding light for all the activities of our Office of Global Business.
00:20:26
Speaker
And I'm very happy to report that we're doing a lot of things in this area to really try to internationalize our education for our students. We're working on the business curriculum. We're trying to develop courses that are cutting across disciplines and trying to infuse those courses with international business issues.
00:20:48
Speaker
We're trying to up the international content. This report is something that we will share with faculty and hopefully that will be worked into the lectures that they're making to our students.
00:21:00
Speaker
We're working on trying to find creative ways to connect our students internationally, whether it be through study abroad programs, collaborative online international learning, which is using technology to connect our students across the globe with other students in other parts of the world so that they can start to develop that cultural awareness. We're trying to help faculty.
00:21:22
Speaker
We're doing training programs for faculty where we send faculty and provide some funding to help them go on trips around the world. There's a program at the University of Washington where they're actually tracing the global supply chain for apples and going to Vietnam and we've been working with them to maybe get involved a little bit more with some of that activity or maybe try to duplicate that activity here in Ohio.
00:21:46
Speaker
So we're doing a lot of stuff with students. We're doing a lot of stuff with faculty. Also, I think something that came out in the report was this need for language.
00:21:55
Speaker
And I know that our Office of Global Business and our cyber group have been really trying to find ways to collaborate more effectively with our foreign language departments and area study centers that we have on campus, trying to build out language courses for our students and even provide some language training and culture training for business people. And again, all these efforts really highlight just how our research with NCMM is really aligned with what the needs are being identified.
00:22:24
Speaker
Yeah, I know you and I have both had the chance to travel internationally with students. And for me, it's almost universal how these groups, it's almost embarrassing that English is spoken so broadly in all of these countries. And yet, we put very little effort toward understanding the cultures that we visit.
00:22:50
Speaker
That has been almost every trip I've ever taken. That has been one of the key things that students tell me after the fact is I wish I would have put more time into understanding and appreciating these different cultures that we're visiting.
00:23:04
Speaker
Something like DuLingo, it's a wonderful tool. I use it every day. I'm trying to work on my German, but one of the things that it doesn't do for me or for students is it doesn't build that cultural awareness. It doesn't build that context of business and how do you negotiate across languages. I think making some investment in that is going to continue to be important.
00:23:32
Speaker
So my last question for you, Mike, what advice would you give to middle market company leaders if maybe they might be considering entering an international market or maybe they've just started the process, they might be struggling or have a lot of questions.
Strategizing for Global Success
00:23:49
Speaker
What would be your advice on ways that they could engage in that process better or tips, advice, things they could do?
00:23:57
Speaker
Okay, yeah, a couple of things come to my mind. First, be sure to go in with your eyes open. Understand that international supply chains are more challenging to manage the domestic supply chains. I just think that's a fact. You know, international supply chains have more complex communications. They're more complexity in terms of the logistics that you have to manage. The lead times tend to be a lot longer. There's regulatory issues you're dealing with. There's currency fluctuations that you're dealing with.
00:24:27
Speaker
And understanding that those differences are significant but overcomeable is something I would want companies to keep in mind. You know, I'd also sort of reiterate some of the ideas that were put forth by Bob Grody, who was a company who served as a case study in our report.
00:24:46
Speaker
I won't give away all the insights that Bob was able to provide. And I know you're appreciative and I'm definitely appreciative of his involvement in the report. You know, Grody is a mid-sized company, does industrial food slicing and assembly equipment.
00:25:01
Speaker
They've got a major global footprint. And to hear his perspectives from that middle market, he stated in the report, if you aren't growing, you're dying. And as a professor, I love that perspective because I always tell my students that. And I think our study really provides strong support that engaging in international supply chains can be a significant source of growth for middle market firms.
00:25:26
Speaker
And while this engagement can be challenging and there's definitely things that you need to thoughtfully consider, those who pursue this path have indicated that they are realizing financial benefits from doing it. I think the other thing that Bob mentioned in his case study that I really sort of gravitated to was, he said, his company didn't just dip their toe in when going global, they dove in. And I would,
00:25:56
Speaker
Push companies that are listening to this or companies that read our report. Don't let the differences that exist in international supply chain scare you away. There's lots of resources out there, resources such as the NCMM. There's the cyber network, including the Fisher Cyber. Even our Fisher College of Business has an award-winning export internship program where companies can work with us to gain advice, to gain insights on how to get started in international business.
00:26:25
Speaker
So, you know, global business opportunities are going to come in a multitude of forms and shapes and can be from any part of the world. But being open to those opportunities and not shying away from them and developing an approach that addresses and tailors the distinctions across these global markets, I think will set you up for success. Wonderful.
00:26:49
Speaker
Well, thanks, Mike. I really appreciate your partnership, your leadership in helping us drive this project home. We're really excited about it, and this has been a great discussion today, so thanks again for joining us. Thank you.
Further Resources and Closing Remarks
00:27:03
Speaker
For more information about this new study, if you'd like to see it, download it, read it, please visit our website, which is middlemarketcenter.org. Thanks again for listening, and we'll talk again soon.
00:27:18
Speaker
Thank you for listening to The Market That Moves America. Never miss a new episode by subscribing anywhere podcasts can be found. You can also subscribe to our email newsletter at middlemarketcenter.org.