Dr. Zhaohui Wu, Oregon State University: Supply Chain Council

We talk with Dr. Zhaohui Wu, a professor of supply chain and operations management at Oregon State University. We discuss strategy, priority, building compacity for regional networks of supply chains, and the current dialogue between states and the private sector. Want to share your thoughts? Email podcast@naspo.org, we’d love to hear from you.

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Kevin Minor:   0:04
Hello. What's up? Episode five. The NASPO Pulse. Do you know what that means? That's five times that we've taken the pulse now. And people, the pulse is roaring. This is the podcast where we are monitoring issues in state procurement. We've got our finger on the pulse. I'm your host, Kevin Minor and I am delighted to be a part of your day. Aww. Today we're talking supply chain management amidst the Coronavirus with Dr. Zhaohui Wu. He's a professor of supply chain and operations management at Oregon State University. Currently, he's teaching and conducting research on supply networks, environmental management strategies and operation, and way, way more. He's an extremely intelligent individual, really interesting to talk to. We're gonna chat supply chain strategies, priorities, and even jazz music. You know what it is...Let's take the pulse.  

Kevin Minor:   1:07
Dr. Wu, Thank you so much for joining us today on the pod. How are you?  

Dr. Wu:   1:12
Good. How are you?  

Kevin Minor:   1:14
I'm doing, I'm doing very well. I really appreciate you taking some time out of your busy schedule to discuss this, um, with us right now. Just with everything going on, we wanted to talk to you, not just about state procurement but the state of supply chain management and some of the issues and some of the risks, uh, that we're experiencing right now.

Dr. Wu:   1:37
Yeah, indeed. So it's not just a big crowd of it's a state of procurement, State of supplies, management, and well go through a drastic change in the coming years. How a how we look at the supply chain and the strategies and also that the priorities. So all this will change.

Kevin Minor:   1:58
With all these industries feeling, you know, the pinch of the pandemic, would you say that this is the end time of the just in time inventory? Should state agencies, you think, should they plan to keep more supplies on hand From now on?

Dr. Wu:   2:17
I don't think this is the end of J.I.T just in time. It's a philosophy of being efficient, right?  And uh, we all learned that if you have more, even when it does not always solve the problem, actually can aggregate. You have too much inventory, you have quality issues, right,? You always have a surplus, and so that's not necessarily a good thing. What is gonna change is that companies, the private sector, and the public sector is gonna keep getting more, surplus as a buffer, given where things are sourced and so that's one aspect of it. another aspect is that as we see from the pandemic and even that before that, a tariff fight that a lot of companies are moving production closer to the place where the good is...will be consumed. And so they build factories to support that region. So that does not necessarily mean other factories will be in the U. S. Or in China will be  localized, rather localized supply networks so that their overall resiliency of the supply chain is improved in that regard. So that means there's a little bit additional resource, additional capacity needed, so that's cost...But things like the shortage of masks, I think 3M is much better at handling it than other companies.

Kevin Minor:   3:44
Right.

Kevin Minor:   3:45
Where are we looking at for sourcing right now? Is this an innovative time to do new sourcing? Because we have to kind of think of things quickly and be creative. So where are we looking for that?

Dr. Wu:   4:00
that? Right, So the crisis always is Opportunity.  So so companies are considering that. So right now I think the challenge is that most of the... many of the critical materials are coming from overseas, China in particular. And it's not just sub-components, it's a raw material. So as a company try to de-couple, or to move away from China, and they were in the process of having this de-coupled supply chin. So So that's the challenge companies are facing. We try to duplicate and replicate the different networks, however, the reality is that a lot of materials are simply not here, and they take months to ramp-up. And now the challenge is that it's not just in manufacturing material, it's also in transportation. So, for example, there's no many boats coming to visit the U.S. They're afraid.  

Kevin Minor:   5:00
Rightfully so.  

Dr. Wu:   5:01
Yeah, so? So there is an automatic model that bottlenecks in terms off what we need to, ride out this crisis. And but as your second question go asking, what are company doing and what initiatives, of companies are improvise. So how to collaborate with local original companies that have a similar problem or extra capacity? And how can they leverage that capacity to redesign and product introduced redesigning processes to come up with a quick solution? A quicker solution. So one thing we were doing as a lab, we, uh, were coordinating our Advisory Council member companies, most of the private sectors, to help to figure out what capacity will have you in the aro space sector, apparel sector or, precision machining, or health sector? So and NASPO is part of it

Kevin Minor:   6:09
Right. 

Dr. Wu:   6:11
So what? How can we engage in a discussion to see "what do we have in this region for classes for Pacific and Northwest? Can we make a ventilator here? and what are the hurdles, with FDA approval on certification, we'd go through. And so those things we are discussing, you know, forum to figure out what can we do to start a conversation so the company can talk among themselves. So this is localized network are more resilient, and I can see this is a trend. As we de-couple and a commoner consider how to build the networks in regional level. Yeah.

Kevin Minor:   6:47
Interesting. Why do you think that that is?

Dr. Wu:   6:51
well, in terms of building the capacity the this is a U.S. institutional environment, right? So there's a lot of the federal government is less willing to be engaged in large scale coordination, as we see... So a lot of the initiatives taken by the state government and, uh, at the same time the, uh the private sector try to help. So the question is, where is how we started a dialogue. And so this is what happened in that sort off, ad hoc self-organized away. And so we're trying to figure out how this work and there's no magic bullet. so that we just had a meeting this morning and one company says we can do this. Another company say, if you know this key company over here in San Diego, maybe that can speed up the FDA approval process because they have been certified, however, their production was overseas. So how do we make this disconnected chain or tears of players together...and  reorganized them to mobilize the production. So thats the thing we as a  university, are trying to be a help. Try to facilitate this type of discussion, and I think this will be, um, there's what should be done at not just Pacific Northwest, but should be leveraged across the different regions.

Kevin Minor:   8:22
Absolutely. Yeah, I guess. Ad hoc is probably the new normal right now. Kind of the new speed of things at the moment, especially. Can you give me an example of something that you guys were working on at OSU, to that respect of one of those ad hoc examples?

Dr. Wu:   8:43
Right, So we are really into facilitator off discussion, So when we are making masks and so we're not doing that, right? So But what you're doing is very important is important because, uh, you know, it's funny. We were thinking, Well, we're in a college town and most of the company know each other and they're in Portland, which is 19 miles away, the biggest city in Oregon. And it turned out that not everybody talked with everybody is a weak ties, right? So they have the weak ties that people talked with their sector, but who knows who knows who and that's that. That's that We're just all for what plentiful, I'm sure coming out of the platform. And so one thing we were working with is that why should a former student in the health sector health care And so he's saying, We need the masks and how we get Max and the clean it pretty the hand sanitizer. Yeah. So then it turned out that was once a poor remember is walking largest distributor for the for the for the PDE product commission initiated, and there's also the device as well. It is critical sector. This is how you his orders on. But there's a category that you say you can you can put yourself in their eyes. Healthcare provider That's a player will have to prod arise that law. So those have information of a critical way tempted to not think about it. So you know also that regardless, this house provider is also talking with one of the biggest apparel producers, which is, uh, well, it's headquarters. Enough Oregon. And so they are making masks now with only kick their the sewage suing capacity are so a Simmons Kentucky, which breweries and distilleries here. So they are working to get to figure out how weak Afghanistan and tiresome Yes, yes, have me. Yeah, we are drinking hand sanitizer for a little bit, I

Kevin Minor:   10:50
think probably, but that's interesting. So you're You've kind of one thing you've learned this process is to reach out to people whom you would not normally reach out to write, or people that you sometimes don't think about fields that you sometimes wouldn't normally interact with. You're reaching across the aisle. Yeah,

Dr. Wu:   11:08
right. Indeed. So yeah, it is. It's really organic. A process of figure out who knows what on it is not because it is by nature has to add up because we do now know who knows what that says is in charge of the network. So another thing is, is that we brought actually brought in a fine, beautiful Penn State is not a partnership coming school well, for national. So this guy's doing research in public procurement. And if he's from Europe and eso, he brought in another two companies from the believing ones from Texas, once from Pennsylvania. And they have experiences in this area and also having materials for facemask materials. Right? So that's an auto automotive sector, and we never thought about it. But there are actually materials Roma Cherian different supply. So he's like like making music, right? Making jazz music, Who knows? Oh, no. Oh, you improvised. But But you have you have This thing is a rhythm as his collaboration and you bring you know, players

Kevin Minor:   12:19
just like that. I I really like that analogy, though. You know, it's ah, you gotta start with some player gets the people that know how to make music, right?

Dr. Wu:   12:27
Yeah. So So I better we see the need. We see there's a there's a caps, the gaps on the on the interaction and collaboration between private and public sector And you the for the private sector. We would learn how the claret and that we need to understand color state government work how city government procurement work with the health care sectors. So those all these things have new. But how did the state of cumin offices work with her? The health sector is that a public order is our private sector. So how that house on how we lowered to state procurement to eat? We three influence the production decisions off the private sector's that this this this way If you've got a roti in or a rubric as how we collaborate and there and what NASA has been doing well over the past three years in the collaboration may I think I should say five years is that we, uh they there's a growing recognition and off the state procurement and in the universities, that was never the case in the business. So So there's so I think I think this is the process of started.

Kevin Minor:   13:46
Yeah, Yeah, absolutely. And and so just developing kind of, ah, standard operational procedure for working together and collaborating,

Dr. Wu:   14:02
right? And and the beauty in the knowledge. How procurement problem forgiving works at a state level on a federal level and how this critical sectors work with estate with private sector and how we can change the overall process.

Kevin Minor:   14:20
So how did these two seemingly different entities work together?

Dr. Wu:   14:27
I think they will be a sort of a merged priorities, right? So the typical idea was the the probably sectors for the for the public puts So the classes not consider that the priority is this. It is a priority for private sector. I think it's changing with the risks, the common risks in the center of dynamic. And so the supply chin needed. It is time for the efficiency off the private sector and also for the efficiency off a society. And I think company I've seen that and I don't think it's It is nothing's overlooked, but it was never was. It was not ish in the past with because we never had such a such a scale, a sort of a disaster that night. This newest coordination.

Kevin Minor:   15:22
So you see more collaboration coming out of this, even after whenever this is, I hesitate to even say over B. But when things sort of begin to come back to normal, do you Seymour collaboration between private and state?

Dr. Wu:   15:39
I hope so. I think it's attract right. So people say the, uh, the pandemic is yes, is unique and bet right, his urbanization right Now that you don't even close, it may not nature to the places where the well I've lived. And why is that? It's because it is for securities anyways for security should they hide a climate change? So So this isn't wherever sits stressed from the system. And so this is this is just the beginning off different dynamics off the overall sportal under social system. I think this is a trend. Maybe one event is well being overlooked to some degree. If if we come a well by the summer But I think I think I think there's a There will be more collaboration

Kevin Minor:   16:33
after our conversation. What advice do you have for our listeners?

Dr. Wu:   16:39
Stay healthy, Stay saying and things together. Damn it together was a university a za program. We indeed appreciate a partnership. And, uh, we hope we can training future supply. Asian leaders working private sector exciter and s o This is our mission, So yeah. So I don't have any of the West. I appreciate this, uh, this collaboration opportunity and this is this is

Kevin Minor:   17:10
yeah. Absolutely. And we appreciate you very much, and we want you to stay safe and healthy. Insane. Also, Dr Wu, a professor at Oregon State University and he is a NASA bo academic partner, works with Nassib. Oh, and NASCAR value point on several different initiatives. Dr. Ruth, thank you so much. Thank you. Can stay in touch. So what did we learn from this profound professor? This astute student of supply Jane's? In this time of hardship on emergency, we have to read between the lines little reach out to those that we may normally not look to for answers. One person making music can be good in fact, it could be beautiful, but having an entire orchestra. But that's just a different experience entirely. And while one person will eventually get tired, having an entire band allows for support. So is what Dr Wu is saying about building capacity for regional networks of supply chains. Is that a good idea? Is that something that we've seen before? What do you see in your community? Where does the dialogue between state government and private sector start? What does that look like as we reorganized to rally production? Has this conversation always been so relevant? We're just now seeing it. We'd love to hear from you. Email me podcast at NATPE oh dot org's and make sure that you check out NASA Pose Cove in 19. Resource is I'll put a link in the description for that. While you're at it, check out the poll, stopped nascar dot org's and read some of our excellent blog's really great ideas there, too. Go ahead of you haven't already and subscribe to the pulse Apple podcast Spotify, Google or wherever you get them listens really appreciate you joining us today. I'm Kevin Minor until next time