Professor Leachman explores the origins of Industrial Engineering Operations Research, his particular interests in the field, and an extensive analysis of supply chains from Asia to California and the dispersal of goods to U.S. markets.
Transcript
Speaker 1: Spectrum's next. Hmm
Speaker 2: [inaudible].
Speaker 1: [00:00:30] Welcome to spectrum the science and technology show on k a l x Berkeley, a biweekly 30 minute program bringing you interviews featuring bay area scientists and technologists as well as a calendar of local events and news.
Speaker 3: Good afternoon. My name is Brad swift and along with Rick Karnofsky, I'm the host of today's show. Our interview is with Professor Robert Leachman of the [00:01:00] industrial engineering and operations research department at UC Berkeley. He received his bachelor's degree in mathematics and physics, his master's degree in operations research and a phd in operations research all from UC Berkeley. Professor Leachman has been a member of the UC Berkeley Faculty since 1979 professor Leachman, welcome to spectrum.
Speaker 4: Thank you.
Speaker 3: The department [00:01:30] that you're in, industrial engineering and operations research, those two fields, how did they grow together?
Speaker 4: Well, if we trace the whole history, industrial engineering started shortly after the turn of the century focused on improving the efficiency of human work and over the years it grew to address improving the efficiency of all production and service systems. Operations. Research started during World War Two focused on [00:02:00] mathematic and scientific analysis of the military strategy, logistics and operations. And it grew to develop that kind of analysis of all production and service systems. So in that sense the fields grew together. But in another sense they're different. Operations research steadily became more focused on the mathematical techniques for analysis of operations, whereas industrial engineering always has been more focused on the operational [00:02:30] problems and the engineering practice of how to address those problems. So in that sense, the two fields are complimentary. So how is it that things have changed over say the past 20 years? Well, I think the domain for ILR has, has changed as the u s s become less a manufacturing based economy and more a service space that has increased the focus and service areas [00:03:00] for applying industrial engineering operations, research type thinking and analysis, be it things like healthcare, financial engineering, energy conservation. And there's certainly been a lot more activity in supply chain analysis, particularly multi-company supply chains and even the contractual relations between those companies.
Speaker 5: Okay.
Speaker 3: And in your work, which complimentary technologies do you find the most helpful and have the most impact?
Speaker 4: Well, I [00:03:30] think certainly the, the progress in computing power or the progress in automated data collection and the data resources we have now makes a lot more things possible now that weren't possible before and certainly changes how I do things. We can do much more analysis than, than we used to be able to do.
Speaker 3: The idea of keeping things simple, which is sort of an engineering paradigm of sorts, right? Is that still a virtue or is that given [00:04:00] way to a lot of complexity that all these other capabilities lend themselves to?
Speaker 5: Yeah,
Speaker 4: I think there's a Dick Dichotomy here in industrial practice. I think simplicity wins out. If you have an elegant, simple solution that will triumph. I think the incentives are a little different in academic research, especially mathematical research from the kind of an elegant theory is one where you start with a [00:04:30] small set of assumptions and you derive a great complexity of results and analysis out of that. And so sometimes I think there's kind of a different direction between what's really successful in practice and what's really successful in academia.
Speaker 3: What is the research like in industrial engineering and operations research? In terms of the academic research and theoretical research that happens?
Speaker 4: Well those [00:05:00] doing research on the mathematical methodology of operations research considered themselves to be theoreticians and those doing work on advancing the state of the art and engineering and management practice are often labeled as quote applied and quote researchers, but I always flinch a little bit at that term. I think the implication is that those advancing the state of the art of practice are merely applying quote unquote the mathematical methodology [00:05:30] developed by the theoretical researchers, but that's not my experience at all. If and when one is able to advance the state of the art, it comes from conceptualizing the management problem in a new way. That is, it comes from developing the insight to frame in a much better way. The question about how the industrial system should be run at least as much as it comes from applying new mathematical sophistication and moreover available mathematical methodology. Almost always has [00:06:00] to be adapted once the more appropriate assumptions are realized in in the industrial setting.
Speaker 4: So in that sense the quote unquote applied IUR researchers actually do research that is basic and theoretical in that scientific sense I talked about and that is its theory about how the industrial systems and organizations should be run. So beside the efficiencies and productivity gains that you're striving for, [00:06:30] are there other benefits to the industrial engineering and operations research? I spend a fair bit of time working on what I call speed and that is speed in the sense of the time to develop new products, the time to ramp up manufacturing and distribution to bring into market. And my experience in a lot of industries, especially high technology, is that the leaders are not necessarily the ones [00:07:00] with the lowest cost or the highest efficiencies, but they're almost always the ones with the greatest speed. And IOR can do a lot for improving the speed of that development and supply chain.
Speaker 4: And that's an area I work on. And that has applications across the board taking things to market. Absolutely. And we have expressions like a time is money or the market [00:07:30] window or things like this, but they're often very discrete in nature like you're going to make the market window or you're not the way we describe it, but that's, that's not the reality is that everything is losing value with time. There is a great value on on bringing stuff out earlier. Everything is going obsolete and that is undervalued. In my experience in organizations, most people have job descriptions about cost or perhaps revenue, but a, there's little or nothing [00:08:00] in there about if they do something to change the speed, what is it worth to the company, so we work to try to reframe that and rethink that to quantify what speed is worth and bring that down to a the level of NGO, every engineer so that they can understand what impact their work has on speed and that they can be rewarded when they do things to improve speed.
Speaker 2: [inaudible]
Speaker 6: [00:08:30] you are listening to spectrum on k a l x Berkeley. Today's guest is professor Robert Leachman of the industrial engineering and operations research department at UC Berkeley. We are talking about analyzing supply chains.
Speaker 2: [inaudible]
Speaker 3: [00:09:00] can you give us a, an overview of this kind of mathematical analysis that you use in your work?
Speaker 4: Okay, well let me take a recent topic. I've spent a lot of effort on and that is, uh, studying the, the supply chains for containerized imports from Asia to the United States. [00:09:30] Over the years I have been fortunate to have access to the all the u s customs data to see who's bringing in what goods and declared values their pain to bring those in. And I've been fortunate to have access to the transportation rates and handling rates that they're paying. And I can start to lay out the picture of the supply chains for each company and how it can be best managed. And so that involves mathematics [00:10:00] to describe the variability and uncertainties, uh, the variabilities in the shipment times and the chances for mistakes, the uncertainties in sales in various parts of the u s and so on. And then putting together the mathematics to simulate this so that we can now see how alternative supply chains behave. And also the impact of changes in government policy such as fees on the imports or improving the infrastructure [00:10:30] with uh, expanded ports or rail lines or uh, highways and the like. This is kind of a long, large effort to where we've been able to replicate inside the computer the whole trade going on and then inform both policy analysis for the governments and for the importers themselves.
Speaker 3: California in particular, it's a real destination for the Asian supply chain. Are there peculiarities about California that you could tell us about?
Speaker 4: [00:11:00] Well, close to half of all the waterborne containerized imports from Asia to the u s enter through the California ports. A few include Long Beach Los Angeles in Oakland and there are very good economic reasons why this happens and this has to do primarily with managing the inventory and supply chains. If you think about the alternatives of at the factory door in Asia, we can decide how much is going to go [00:11:30] to various regions of the United States before we book passage on the vessels. Then considering the lead time, you need to book a vessel at least two weeks in advance. And considering the answer it needs and so forth is that you're committing how much is going to go where one to two months before it gets there. Whereas if you simply ship the stuff to California and then after it gets here, now reassess the situation based on how much arrived in California [00:12:00] and what is the updated need in the supply chain in the various regions in the u s then you can make a much more informed allocation, a match the supply to demand much better and you'll reduce the inventory in the system and you'll decrease the time until goods are sold and people will be able to get their goods earlier.
Speaker 4: The big nationwide retailers we have in the U S and also the nationwide, uh, original equipment manufacturers that resell the good once they're here in [00:12:30] the u s practice, these kind of supply chains. And so they bring the stuff to California and then reship. So that means that a, we have a critical role in supply chains and more comes here then goes elsewhere. If you were to think about doing what we do at, say, the port of Seattle or, or through the canal to the Gulf or east coast, then you would have to ship into that southern California market, which is the largest local market in North America. And that would be much more expensive [00:13:00] than if you start there and ship out from there. So you don't have to ship that local market stuff. The downside of that is that there's a huge amount of pollution created with all the truck traffic to bring the boxes from the ports to a cross dock or a warehouse and trans ship the goods, reload them and send them back to a rail yard and so on.
Speaker 4: And uh, that creates traffic. It creates pollution, creates concern for the governments and rightly so. Uh, and [00:13:30] so there's been a lot of proposals that maybe there should be some sort of special tax on the containers to pay for infrastructure and to pay for environmental mitigation and the like. So I've done some of the studies of that question from the point of view of the importers of what is the best supply chain for them in response to changing infrastructure or changing fees and taxes, changing prices at the California ports. I'd probably some studies that have [00:14:00] been a highly controversial and got a lot of people excited. I did two scenarios. One where there's just taxes placed on the boxes and there's no improvements in infrastructure. And the answer to that scenario is a pretty significant drop, especially the lower value imports where inventory is not so expensive as simply moved to other ports.
Speaker 4: But then I also did a scenario where if there was a major improvement in infrastructure of moving [00:14:30] a cross docks and import warehouses closer to the ports and moving the rail yards closer to the ports to eliminate the truck trips and alike, uh, that even as high as $200 a box, this would be a value proposition to the importers of the moderate and expensive imports as they would make California even more attractive than it is now. And so that got picked up by one camp saying, see we can tax them and they will stay and pay. Uh, but they didn't [00:15:00] quite read the fine print in the sense that no, you have to build the infrastructure first and then you can use that money to retire the bonds. But if you tax them first without the infrastructure in place, they will leave. The bill passed the California legislature.
Speaker 4: But, uh, fortunately governor Schwartzenegger staff contacted me and talked about it and I think they got the story straight and the governor vetoed the bill. But the challenge remains is that I find it intriguing that generally [00:15:30] the communities near the ports are, are generally hostile to a logistics activities. They don't want warehouses, they don't want truck traffic, they don't want rail yards. Uh, and this tends to mean the development of those kinds of things happens much further out in greenfield spaces, which of course increases the congestion increases and the transportation. And I mean, there's something almost comical about hauling stuff around when we don't know where they should go yet. [00:16:00] But there's an awful lot of that that happens. So there's still a lot of potential to improve the efficiency of the supply chain.
Speaker 3: Okay. Would this experience that you've had doing some research and then getting involved a little bit in the public policy side of it, is that something that you could see yourself doing more of?
Speaker 4: Well, I guess it is that I was asked by a government agency that the Metropolitan Planning Office for Southern California is, is, [00:16:30] is as the acronym Skag s c a g southern California Association of governments. And they asked me to, to look at the problem and I, and I was happy to do so. I think in one sense it's, it's nice to make a contribution to public policy so that we can have a more informed public management just like it is to help private companies do that. But on the other hand, a political process is pretty messy, pretty frustrating at [00:17:00] times is that usually things are a little more sane inside a company, but it's important and I'm
Speaker 2: glad to do it. You are listening to spectrum on k l x Berkeley. Our guest is professor Robert Leachman, the industrial engineering and operations research department at UC Berkeley. We are talking about analyzing supply chains and global trade
Speaker 3: to sort of address the idea that [00:17:30] all these efficiencies and productivity gains take jobs out of the economy. Is there some swing back where there are jobs that are created by all these changes?
Speaker 7: Yes.
Speaker 4: Well, let me divide this into two pieces. First, with regard IOR type work, where we're developing systems to manage supply chains or industries better is that I've been doing this kind of thing [00:18:00] since about 1980 in industrial projects in the U S and abroad. Uh, and I don't ever remember a single project where what we did resulted in a decline in employment. And in fact a lot of those were companies and crises. And if we hadn't been successful, I think a lot of people would have been put out of work. And every one of those projects created new engineering, managerial jobs to manage the information technology that was being used to run the system [00:18:30] better. So kind of on a micro scale of doing projects, it's not my experience that IUR type work reduces in employment. And when I think about the larger scale of all the offshoring of manufacturing from the U S to Asia, the companies doing this are more profitable and the costs of the consumers are much less.
Speaker 4: And if you look at the gross national product and the like, these numbers are pretty good and the average [00:19:00] income of Americans is very high compared to the rest of the world. But the distribution to that income bothers me a lot. Increasingly, we're a society of a small number of very wealthy people and a lot of people who were much worse off. And in the era when we manufactured everything that provided a huge amount of middle-class type jobs and we don't have that anymore. We have low paying service jobs and we have a lot of well paying [00:19:30] engineering and management jobs. And that concerns me. I think all the protests we start to see going on even today here on campus, uh, illustrate that.
Speaker 3: How do you see the outsourcing of manufactured goods to low wage regions? And supply chain efficiencies playing out over time?
Speaker 4: Well, certainly the, the innovations in supply chain management have enabled it, but you know the difference in in salaries between [00:20:00] this part of the world and there has always been there and that wasn't something that was created right and it's not going to go away immediately. Take some time. I think there's, there's little question that Asian goods will cost more. The Asian currencies have been artificially low for a long time, but they are starting to move up as energy gets more deer, transportation costs go up. Our interest rates have been artificially [00:20:30] low since the recession and before. I don't think those low interest rates will last forever and when they go up then inventory gets more expensive and so those supply chains all the way down to Asia will get more expensive. I think we've done a lot of brilliant engineering and other technology improvements that have lowered costs a lot, but I think those costs are going to go up and as they do, then the answer for the [00:21:00] best supply chains is going to bring some stuff back to America. And that's already happening first. The very bulky stuff like furniture and it left North Carolina, but now much of it is come back and I think you'll, you'll see that the, the most expensive items to ship around will be the first to change. Nowadays the big importers have very sophisticated departments studying their supply chains and I truly [00:21:30] believe that they could save a penny per cubic foot of imports. They will change everything to do it
Speaker 4: and so things can change very fast. Following the economics
Speaker 3: and I understand you're a musician, can you give us some insight into your, a avocation with music?
Speaker 4: Well, I'm a jazz pianist. I had come up through classical piano training but then at middle school, high school age, moved to the bay area and [00:22:00] there was lots of jazz happening here and I was excited by that and I actually learned to play jazz on the string bass first. But I had a piano in my room and the dorm I lived at here at Berkeley. And so I was playing a lot and listening to records of people I really enjoyed. And there was lots of jazz happening here and other musicians and we learn from each other and you grow your vocabulary over time and I was gone a couple of years between,
Speaker 5: yeah,
Speaker 4: Undergrad and Grad school working in industry, but [00:22:30] when I came back here to Grad school then I was playing bars in north beach and the like, but at a certain point you have to decide whether you're going to be a day animal or a night animal. You don't have the hours to do both, but art is very important to me and lyrical jazz piano is very important to me. It's, it's a way to do expression and creativity that I don't think I've found another medium that can match it.
Speaker 3: Professor Leishman, thanks very much for coming on spectrum. My pleasure.
Speaker 2: [inaudible]
Speaker 6: [00:23:00] irregular feature of spectrum is to present the calendar of the science and technology related events happening in the bay area over the next two weeks. Brad Swift joins me for this.
Speaker 3: Get up close to a hundreds of wild mushrooms at the 42nd annual fungus [00:23:30] fair being held this year at the Lawrence Hall of science in Berkeley. Eat edible mushrooms, meet vendors and watch culinary demonstrations by mushroom chefs. Get the dirt on poisonous mushrooms and checkout other wild funky from the medicinal to the really, really strange mushroom experts will be on hand to answer all your questions and to identify unknown specimens brought in by the visitors. My cologists will present slideshows and talk about foraging for mushrooms. [00:24:00] Find out how different mushrooms can be used for treating diseases, dyeing cloth or paper and flavoring foods. The fair will be Saturday and Sunday, December 3rd and fourth from 10:00 AM to 5:00 PM each day. There is a sliding admission charge to the hall of Science, which includes all the exhibits and the fungus fare. Check their website, Lawrence Hall of Science. Dot Orgy for details.
Speaker 8: On Tuesday, December 6th [00:24:30] at 7:00 PM the Jewish community center at 3,200 California street in San Francisco is hosting a panel discussion on digital overload. Debate continues over the extent to which connectivity is changing the QALY of our relationships and reshaping our communities. Now there are major concerns about how it's changing our brains. Pulitzer Prize winning New York Times Tech reporter Matt. Righto wired Steven Levy and rabbi Joshua Trullo. It's joined moderator, Jonathan Rosen, author of the Talmud [00:25:00] and the Internet to address pressing ethical questions of the digital age, including what are the costs of growing up digitally native are our children casualties of the digital revolution. What are the longterm effects of net use? Visit JCC s f.org for tickets which are $20 to the public, $17 for members and $10 for students.
Speaker 3: Women's earth alliance presents seeds of resilience, women farmers striving in the face of climate [00:25:30] change Tuesday, December 6th that the David Brower center in Berkeley. The doors will open at 6:00 PM for reception and music program is at 7:30 PM it entails stories from the field by India, program director, RWE, Chad shitness, other special guests and Speakers to be announced. Admissions is $15 in advance and $18 at the door.
Speaker 8: December is Leonardo art science evening rendezvous [00:26:00] or laser will take place. Wednesday, December 7th from six 45 to 8:55 PM at Stanford University's Geology Corner Building three 21 zero five in addition to socializing and networking, there will be four talks showing the kitchen of San Jose State University will speak on hyperfunctional landscapes in art and offer a fresh outlook at the technological adaptations and how they can enhance and enrich our surroundings rather than distract us from them. UC Berkeley's Carlo [00:26:30] squint and we'll show how knots can be used as constructivist building blocks for abstract geometrical sculptures. NASA's Margarita Marinova will share how the dry valleys event Arctica are an analog for Mars. These are the coldest and dry rocky place with no plants or animals and site. Studying these dry valleys allows us to understand how the polar regions on earth work, what the limits of life are, and to apply these ideas to the cold and dry environment of Mars. Finally, San Francisco Art Institutes, [00:27:00] Peter Foucault will present on systems and interactivity in drawing where drawings are constructed through mark making systems and how audience participation can influence the outcome of a final composition. Focusing on an interactive robotic trying installation. For more information on this free event, visit leonardo.info.
Speaker 2: [inaudible]
Speaker 6: [00:27:30] now new stories with Rick Karnofsky
Speaker 8: science news reports on research by UC San Diego, experimental psychologist David Brang and vs Ramachandran published in the November 22nd issue of plus biology on the genetic origins of synesthesia. The sense mixing condition where people taste colors or see smells that affects only about 3% of the population, half of those with the condition report that family members also [00:28:00] have the condition, but parents and children will often exhibit it differently. Baylor College of Medicine neuroscientist, David Eagleman published in September 30th issue of behavioral brain research that a region on chromosome 16 is responsible for a form of synesthesia where letters and numbers are associated with a color Brang hypothesizes that the gene may help prune connections in the brain and that soon as synesthesiac yaks may suffer a genetic defect that prevents removing some links. [00:28:30] An alternate hypothesis is that synesthesia is caused by neurochemical imbalance. This may explain why the condition intensifies with extreme tiredness or with drug use. Bring in colleagues believe that it is actually a combination of these two that lead to synesthesia.
Speaker 2: [inaudible]
Speaker 6: spectrum is recorded and edited by me, Rick Klasky, [00:29:00] and by Brad Swift. The music you heard during this show is by David [inaudible] off of his album folk and acoustic. It is released under the creative Commons attribution license. Thank you for listening to spectrum. We are happy to hear from listeners. If you have comments about the show, please send them to us via [00:29:30] our email address is spectrum dot kalx@yahoo.com join us in two weeks at this same time. [inaudible].
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