Case Study: South Korean FDI in the State of Georgia, Part V

This "case study" series will be covered in five parts, listed below:

• Part I: State of Georgia Profile 
• Part II: Georgia Department of Economic Development (GDEcD)
• Part III: Interview with Peter Underwood, Senior Partner, IRC Limited and Managing Director, State of Georgia Korea Office
• Part IV: City of West Point, Saddling LaGrange and Troup Counties
• Part V: Conclusion

You can read my introduction here.

The importance of the comprehensive approach to business development and building of supply chain foundations for Korean FDI flows into Georgia is never more clear than during an economic downturn such as that we are experiencing around the world, particularly in the United States. As noted in this article by Trevor Williams from Global Atlanta titled "Kia, Suppliers Plow Ahead Amid Manufacturing Slowdown:"

"Kia has a varied portfolio of suppliers for most parts to combat potential disruptions in its supply chain.  Many parts will be imported from South Korea and other countries. 

"The Georgia facility, Kia’s first plant in the U.S., will employ a logistics-intensive “Just in Time” method by which parts arrive at the plant when they need to be installed into the vehicles, said company spokeswoman Joanne Mabrey. “It’s a lot easier if you can get the parts when you need them, not to have to stockpile them,” she said.

""The auto industry is moving toward this method rather than dealing with the overhead costs associated with storing parts," she said. Suppliers of some vital components are located on the Kia site. Mobis Georgia LLC, which makes front-end chassis and other parts, will feed those into the Kia facility through a conveyor system."

Denso, my former employer and former subsidiary of Toyota, the JIT king, takes a similar approach to weathering downturns; it is likely Kia developed these methods, as they have done with quality control, after the research and benchmarking of Toyota's successes. Battle Creek, the home of the largest Denso manufacturing facility in Michigan, found the company and its network of suppliers to be its largest employer base after the last downturn in which The Kellogg Company closed plants and cut jobs. Georgia cities are now facing this dynamic and yet reaping the same rewards of a dedicated and determined effort over many months to attract Korean FDI, and in a very strategic and forward thinking manner. I hope this case study provides an inspiration to communities around the U.S. looking for ways to not only survive this economic downturn but to also better prepare for maintaining prosperity through the next one.