DC Velocity - May 2014

skills businesses seek, according to Chung.

There are even supply chain education programs that reach down into the high schools. KC SmartPort, for example, works with a program called Prep-KC to expose students, guidance counselors, and teachers to career opportunities in supply chain and logistics. Transportation and supply chain professionals are brought into the school to talk about the field, and students can take distribution and logistics classes at the high school for college credit.

On top of that, the Department of Economic Development runs a statewide training program known as Missouri Works. This incentive program is designed to provide training resources and assistance to businesses in order to help them cut training costs and boost productivity.

Occasionally, companies evaluating potential DC sites
in Missouri will express concern about the state’s strong
union presence, says Orf. Those worries are misplaced, he
says. Studies have found that worker productivity levels
in Missouri tend to be higher than in states with a smaller
union presence, according to Orf. “While the wage rate
might be higher here than in other Midwest states,” he says,
“the productivity level of our warehousing and transporta-
tion workers is also higher.”
Part of the explanation for those high productivity levels
may be cultural. Many speak of Missouri’s “Midwest work
ethic,” which can be seen not only in day-to-day operations
but also in the face of disaster. As an example, Cartwright of
Con-way Truckload cites the way the community of Joplin
pulled together to rebuild the city after it was flattened by
tornadoes in 2011. “I’ve been in a couple of tornadoes,” says
Cartwright. “It’s always been interesting how the commu-
nity bonds together and helps each other. I guess that’s part
of the feeling of Midwest fellowship.”

4 Ability to serve diverse types of businesses. Unlike many other Midwestern states, Missouri’s economy isn’t dominated by a single industry—think Michigan and the automotive business or Kansas and aircraft manufacturing. Instead, Missouri serves a varied array of businesses. According to Chung, the state’s mix of businesses puts it in the top five in the country where diversity is concerned. “As a result, we are able to respond to and accommodate the needs of many types of companies, from retail to industrial products to manufacturing to food companies,” he says.

In addition, the state has a wide range of locations that can meet the needs of a distribution center. Kansas City and St. Louis, the state’s two large urban areas, provide a large population base and extensive transportation infrastructure. But there are also “second-tier” locations ( communities with populations of 20,000 or more) scattered across the state that can provide the staffing levels needed for a DC, says Chung. “All are located on top of at least one major interstate,” he says.

As examples, he cites Springfield and Joplin, located in
the southwest corner of the state; Columbia and Jefferson
City in the middle of the state; Sikeston in the southeast;
and Hannibal in the northeast along the Mississippi River.

“With a couple of minor exceptions, almost all communities in the state would be able to provide the workforce needed as well as access to the necessary physical infrastructure and transportation modes,” says Chung.

MAIN DISADVANTAGE: BEING IN THE FLYOVER

It would be unrealistic to claim that every distribution network should have a facility in Missouri. Indeed, companies looking to locate close to the country’s major population centers, particularly those on the East and West coasts, might want to look elsewhere.

KC SmartPort’s Gutierrez puts it this way: Missouri works best for companies that operate a distribution network with an odd number of DCs. Think about it: If you plan to serve the entire continental U.S. from a single distribution center, it makes sense to locate it in the middle of the country. If you want to have two distribution centers, however, it makes more sense to locate one on each coast. If you raise that number to three, you’re back to needing a DC in the middle of the country. Go up to four, and the equation once again shifts.