Navigating Covid Business Challenges: Novus International

The Covid pandemic has created a myriad of challenges to navigate in business environments. Join host Dr. Patricio Duran as he sits down with Dr. Dave Dowell to discuss how Novus International has addressed customer and employee health concerns while tackling the pandemic's ripple effect on sales, manufacturing, and supply chains. 

Life scientist and strategist Dr. Dave Dowell is Chief Operating Officer and Executive Vice President of Operations at Novus International, and within these roles has global responsibility for manufacturing, logistics, procurement, and regulatory affairs. Dr. Dowell joins host Dr. Patricio Duran, Assistant Professor of International Business in the Chaifetz School of Business at Saint Louis University with research specialties in global strategy and international business environment.

Dr. Dave Dowell
David Dowell | LinkedIn

Novus International
Novus International

Dr. Patricio Duran
Patricio Duran | LinkedIn

Special thanks to Enterprise Holdings, Inc. for sponsoring this episode.

Transcript

Voiceover Artist: 0:03

SLU International Business Now: Conversations That Matter is a podcast developed by the Boeing Institute of International Business in Saint Louis University's Chaifetz School of Business. Established in 1984, the Boeing Institute of International Business offers a breadth of global business resources for the university community and beyond, with nationally ranked academic programs and extensive corporate partnerships. The Boeing Institute today stands as the premier academic institution for the teaching and practice of international business. This podcast series is an extension of the Institute's mission, bringing together critical thought leaders from around the world to address current key global business topics. Our aim is to promote future discussion among our listeners and encourage community action based around those international business conversations that matter. Special thanks to founder Dr. Seung Kim, for his grant to support the launch of this podcast.

Dr. Patricio Duran: 1:10

Welcome to this new episode from Saint Louis University's Boeing Institute of International Business. I'm your host Patricio Duran, Assistant Professor of International Business, bringing you conversations that matter. We are honored to have Enterprise Holdings, Inc. as a sponsor today. Enterprise Holdings, Inc. is a leading provider of mobility solutions, owning and operating the Enterprise Rent-A-Car, National Car Rental and Alamo Rent A Car brands through its integrated global network of independent regional subsidiaries. Enterprise Holdings and its affiliates offers extensive car rental, carsharing, truck rental, fleet management, retail car sales, as well as travel management and other transportation services to make travel easier and more convenient for customers. Privately held by the Taylor family of St. Louis, Missouri, Enterprise Holdings manages a diverse fleet of nearly 1.7 million vehicles through a network of more than 9,500 fully staffed neighborhood and airport rental locations in nearly 100 countries and territories. For more information about Enterprise Holdings Inc., visit www.enterpriseholdings.com. Today, we're going to discuss global COVID business challenges. My guest is Dr. Dave Dowell, the Chief Operating Officer and Executive Vice President of Operations at Novus International. In the operations VP role, Dave has global responsibility for manufacturing, logistics, procurement, and regulatory affairs, ensuring that Novus supplies products that meet the highest standards of the Novus quality system in a reliable manner. A native of St. Louis, Missouri, Dave holds two bachelor's degrees: one in chemistry and one in chemical engineering from Vanderbilt University; and a doctorate in chemical engineering from Washington University. Dr. Dowell, thank you for joining us today.

Dr. Dave Dowell: 3:13

Great, thank you for having me. I'm really excited to be here today to talk about my experience and I'm fortunate enough to work at a global company and excited to share that perspective.

Dr. Patricio Duran: 3:23

Can you describe the Novus marketplace to our listeners? How large is the feed ingredients industry, and who are the customers, suppliers, and competitors?

Dr. Dave Dowell: 3:33

Our focus is on the production of animal protein. So things like chicken meat(which we would call broilers), pork meat, a lot of dairy production, aquaculture. And our customers produce those products, and you buy those in restaurants and grocery stores. One metric that we use to give people an idea of the size of the industry is the amount of feed that is produced-- and our products go into that feed globally. About 1.1 billion metric tons of feed is produced around the world and, and our customers can be larger companies that you would recognize the name of here in the United States to smaller family operations. Again, whether it's in the United States, whether it's in Asia, whether it's in Europe and really the type of protein produced around the world varies dramatically. So I would not assume that the protein production you see around the world is similar to the United States. The U.S. prefers a lot of chicken meat, as an example. India consumes a lot of dairy products. In fact, about 90% of the protein production over there is dairy, just as an example. And in, in China, pork meat is the preferred animal protein. So it really varies around the world in terms of the type of protein produced, but that's what our market looks like. And, the focus that Novus has is on sustainably producing this type of the protein for our customers and producing that in a sustainable manner that allows them to maintain their financial, environmental sustainability as examples. And we interact with them very strongly on developing scientific solutions for their problems.

Dr. Patricio Duran: 5:15

Let's chat about COVID-19. Dave, can you take us back to early 2020. Novus has sales and manufacturing in China? How did the pandemic emerge for the company, what did you do to begin to tackle this monumental challenge?

Dr. Dave Dowell: 5:30

I often think back to early 2020, what we knew at that point in time was very different than what we know now, but let me set a little foundation for this discussion, which I think is important in terms of how we responded-- and this will carry throughout the rest of the conversation that we have. So Novus has done a great job in the past of developing what we call crisis management team. We abbreviated it CMT and it's intentionally done within the organization to address any type of unforeseen event that may impact the business in a negative way. Obviously, a pandemic is one example, but you've likely seen on the news in the recent past about cyber attacks on companies and really could be far ranging in terms of the type of event that the CMT team would address. But it's an intentional development of a team with a team leader. And in this case, I'm the team leader with regional and functional leads. So we clearly define accountabilities for each team member, what part they play in the team, what information they need to bring to the team, and what actions they need to take in terms of responding to whatever crisis we have. We also have a crisis communication team. We call it the CCT, it's internal communication and external communication, and we've been trained through simulations. So once a year, we go through mock crisis reviews and then walk through a scenario or a crisis, and then review how we responded to it. What could we do better? What did we do good? And we have multiple people that can fulfill these roles. For example, in early 2020, unlike today, I could have been on a plane flying to Europe and unavailable. So we have multiple people that can fulfill all these roles. But in early 2020, when we first saw this emerging, I was identified as the lead of the team. And really our initial focus was on gathering information. And the focus, as you said, was China. We do have a manufacturing facility in Shanghai. And so our focus initially was very regional. And so I was not leading that effort. It was a regional lead in China leading the effort and our focus has really maintained throughout the pandemic in really three main areas: employee safety, supply chain security, and interfacing with our customer. So much like we've seen around the world when the pandemic first was hitting China, we identified employees that could work from home and those that could not work from home. And, and there were some hybrid employees that needed some access to some facilities, whether it was the office or manufacturing plan or lab, but not 40 hours a week. And so it's not very original, but we called group one: the employees that had to be onsite somewhere, group two: were the hybrid employees and group three were the one hundred percent can work from home employees. And so our focus was okay for groups one, based on what we know about COVID 19, what do we need to do in the workplace to keep them safe? And back at that time, you may remember three big things were masking...at the time, it wasn't clear if it could spread through surfaces. So there was a tremendous amount of focus on sterilizing surfaces and continually throughout, and then of course social distancing as well. And so really keeping employees separated segregated from each other was important, masks, a lot of personal protective equipment at that time, gloves... if you remember, there was a run on gloves and masks back in early 2020, and this was a global event, not just in the U.S., so getting our procurement team focused on getting those supplies to our manufacturing site in China was a focus for us, for sure. And then educating our employees on, on how to work in this new environment. So there was that change management component as well. So that was really the focus in the group one and group two, where they had to interface. Group three we quickly had to pivot towards do these employees have suitable conditions at some location outside of work to work. So typically home. So do they have a suitable internet connection? Do they have a suitable space that they can work in and much like later occurred in the U S you had families that had multiple people working from home. So it wasn't just our employee team member that had to work from home. You might have two people working from home. And as we know, school, children are children learning from home. And it was not always the case that every employee had a suitable home environment to work from, but our focus was on internet connectivity, the right IT equipment, the right workspace at home. In some cases, if that wasn't available, we were able to bring people back into the office. So an office that used to hold 30 people might have two people in it because those two people did not have a suitable work from home environment. And that's sustained up until now. And up until this point in time. So people were highly engaged, highly energized, and really wanting to overcome the situation that we found ourselves in and engagement was very high. At the same time, there was a lot of personal anxiety, right with, with people. Our knowledge at that point was lower than it is today. I think that the key for us in that time period was a high level of communication with managers as well as peers. And then we also started corporate communication meetings, which were virtual, but every employee in the company was invited. It was held at a time globally that that everybody could attend, which invariably is very early in the U S, midday in Europe. And later in the afternoon or evening in Asia. Generally led by our CEO, Dan Meagher, with participation from many people...myself, but as well as employees of all levels explaining what they're doing and how they're working and challenges and how they've overcome as well as news about the organization that you might normally get at the office. But now you're not at the office. So how do you get it? And that's why we had these meetings.

Dr. Patricio Duran: 11:50

How you sell when the customer says"don't visit me"?

Dr. Dave Dowell: 11:54

We were also saying that to our suppliers. So on one hand, we were getting that answer from our customers. On the other hand, we were giving that same comment to our suppliers. So I think important context setting piece of information that that would be helpful in answering that question to understand is, let's just take the U.S as an example. In the March, April, May, June time period, everybody was focused on their production, safety of their employees and their supply chain. So the best information or the best thing we could do for our customers at that point in time was explain to them what actions we were taking to secure our supply chain to them and how we were securing so that they would get their materials. You know, luckily we're in a business where we don't have to meet with customers face-to-face to supply our product. You can envision service industries like travel and things like that, where you have to be face-to-face to receive the goods or service. And in the case of restaurants is it's another good example. We're not in that situation. So we were very respectful of our customer's desire to keep distance. Again, we had the same concerns with our manufacturing sites; if a sales representative or technical person or maintenance person came into one of our sites from the outside and exposed our employees, obviously that would be a concern to us. So we were very respectful. We understood that commercial organizations very quickly leveraged Teams or Zoom, just like, I think a lot of us have been doing for the past year or so. And that worked very well. In terms of the day-to-day relationships and understanding their needs, our supply that worked extremely well. 2020 was not the time for us and our customers to explore new solutions, right? I would say there was not a high appetite for our customers to explore new technologies or new solutions. It was very much keeping their operations, producing, keeping our supply chains full. Now we are getting back into that mode. And earlier this calendar year, earlier in 2021, again, depending on the location, China was absolutely the first country that opened up back to face to face meetings. We saw late last fall in calendar year 20, face-to-face meetings, conferences, and things like that here in the United States. We're moving back in that direction. Thailand we've actually loosened up earlier, and then the pandemic got worse. So we've tightened back up. The same has occurred in India in terms of initially seeing being able to have some contact with customers, but then the numbers escalated again. So we pulled back. So I think the key is here we've taken a very regional approach in making those decisions. So we have regional leads that make the decision on whether or not we visit customers in that region. I don't make that decision. We have commercial leads in Latin America. They understand the policies. And the level of concern we have about our employees and customers. They make the call in the region, in terms of us seeing customers.

Dr. Patricio Duran: 15:09

As we look forward, what have you learned from this experience both internally and externally?

Dr. Dave Dowell: 15:16

Couple of things internally we've learned and understood is the importance of strong communication. And when I say that I mean meetings, emails; but I also mean that the ERP system that I mentioned earlier, our enterprise resource planning system, we have one system. And when I say one system, this is our financial system. This is our inventory management system. This is our sales system where we track orders. And so any employee can go in from their home, log in, and get the most accurate information. One source, we call one source of truth. There's one source of truth in the organization, which makes working remotely very possible, right. Make it very possible. So a logistics employee in Thailand, as an example, has the ability to see what's going on with logistics in the U.S. And how we're exporting material from the U.S. to Thailand when it's going to arrive, when they can count on it being there and things like that. Internally, I think that communication component is very strong, the flexibility component that I mentioned, but also the employee engagement component that I mentioned. So making sure that we continue to engage our employees, whether it's as managers or as a leadership team. I mentioned the global communication meetings. On the supply chain side our single points of failure or our weaknesses on the supply chain. That has certainly been something that's been highlighted. We really have not had any significant problems, because we were able to mitigate those, but we had never thoroughly planned for a global pandemic and what would we do if that occurred? Certainly what we see, and we see it in our own supply chain, as we're setting it up, but also connected supply chains to us, to our customer supply chains or our suppliers' supply chains, is a stronger regional focus, right? And whether it's regionally having inventory or regionally having manufacturing capability is understanding that what happens in one region of the world, two years ago, you might not have thought of the impact of what it could have two years ago. Today, you understand it very clearly. So you may design your supply chain differently. We're taking those considerations into account for sure. You know, externally that the key things that we've we've learned in that regard again is related to communication with our customers and suppliers, and also leveraging those relationships through a virtual environment that we haven't had to do before. So we've talked about when I say we, internally and externally, but we've talked about one of the reasons I believe we were able to work so effectively from home is I knew many of the people I was working with virtually by working in with them in person for many years. And I also had the benefit of traveling throughout Novus around the world and developing relationships around the world with Novus. When you have a relationship with somebody and you understand their body language, and you understand their tone of voice, and you understand how they respond to different situations, and you know that from your in-person contact, you can pick that up easier in a virtual setting. It's harder if you've never met anybody in person and worked with them in person, to work with them virtually. So we really leveraged internally and externally these relationships that we had that we had built over the years. And I think that's one reason we would have been successful in that environment. That's not an environment that I think can maintain indefinitely. As we, as we have new employees enter the organization, as we have new customers enter, our supply chain, as we have new suppliers in our supply chain, I still think that in- person relationship and understanding it is very important and that is eroding over time. It was the strongest it was ever going to be in March of 2020, and it's maintained or slightly eroded since then. So I think that those are important things to take into account. And then the last one to me I think was really the importance of flexibility and understanding the importance of flexibility with my peers, with my outside contacts, and everybody in the midst of working from home. It was a very stressful time-- you don't always know what's going on behind the screen with people. And so making sure that you maintain that flexibility, I think is important.

Dr. Patricio Duran: 19:38

Is Novus also changing its approach to suppliers, customers, and even government agencies? Do you believe you are better prepared today for the future challenge?

Dr. Dave Dowell: 19:47

Yes, is the answer to your question, I believe there are still things we can do to improve, and we will continue to improve, as I believe we're not complete with this pandemic...we've not exited it completely. So we still have a ways to go. Let's talk about our suppliers, our own supply chain, our customers, and then, government agencies. So, in terms of our suppliers, we often have dual-sourced or triple-sourced raw materials for our manufacturing sites, for what we call supply chain redundancy and competitiveness that has taken a whole new level of urgency with us, given that we've not seen this challenge at one location in our global supply chain. We've seen this challenge in every location, in our global supply chain, right? North America, South America, Asia, we've seen it Europe, we've seen it. And, and so strictly from a supply chain redundancy perspective that will be something that we continue to improve on. We're in very good shape, but we need to get to that near a hundred percent mark. The staging of materials, and when I say that, I mean, where do we keep our raw materials? And where do we keep our finished goods? That certainly has been a learning. And typically we had assumed that logistics were plentiful and easy to get. And so we would keep, for example, a lot of inventory in one location, knowing, or believing that on moment's notice we could ship it across the ocean to another location. As I mentioned earlier, now we're much more going to a strategy of getting that inventory in the regions and closest to the customer is what we call it-- closest to the customer. And so that's definitely been a learning in our own supply chain. In terms of our customers, I think is very related to what I just mentioned, is getting our product as close as possible to our customers. And not relying on one location to have a lot of inventory. So I'll give you an example. This is a lesson we had learned prior to the pandemic through actually some storms, but the the impact was the same. And the solution is kind of the same. We can store material, for example in the North America market. We have some liquid product, and we can store all that in railcars in one location, or we can store it in multiple locations around North America, on the west coast, in the Midwest and the south, and the Northeast and the Southeast. So that if any one area gets impacted, we still have inventory. We can pull from the rest of the North American market. Or worse, if we had all of our materials stored in, let's say Southeast U.S. and a hurricane came in and flooded rails getting out of that rail yard, then all of our inventory for North America would be tied up in that one rail yard. Diversity of inventory and getting our inventory well-positioned in multiple locations so that one event doesn't impact our regional or global inventory. On the regulatory side-- so we had a government agency side-- so our products in any country have various levels of approval that need to occur before it can be used in diets. Often in the past, they're called dossiers, were submitted in person. So you'd go to an office and you'd submit it, or you'd submit it to somebody who worked in an office. So maybe you would electronically submit it to somebody who worked in an office and those offices, in some cases, they didn't have a work from home option. They just closed. And so these government agency offices closed, and yes, we may have submitted it in June, but there was nobody looking at it June or July or August of last year. In some cases, we've seen in various type of regulatory agencies, there was a waiver, right? And there was a waiver waiver or extension; granted in other cases that did not occur. And so we would leverage relationships. We had with those, with those agencies to explain the urgency of the situation, in many cases that was successful. But again, getting back to my point about developing relationships with people and understanding their situation, their contact information, being able to be transparent about our situation and the urgency associated with it. So ensuring that we continue to have strong relationships with those regulatory agencies or government agencies around the world. One of the key points that I mentioned is it's crucial to understand not everywhere in the world works like the U.S. And especially in the case of a crisis. And though I very quickly in one day move to a work from home environment and essentially had everything I needed in terms of access to information in terms of access to technology, peers, customers, suppliers....not everybody in the world has that luxury by a long shot. So in the case of the agencies that I mentioned, some of them just shut down. Again, it's important to not wait until the last minute, prepare ahead as much as you can to mitigate any of these types of situations, get as many contacts as you possibly can and understand their limitations. They may not have the same kind of access to technology and information that we have.

Dr. Patricio Duran: 25:29

It has been my privilege to talk with you today and thank you for a most informative conversation. Do you have any closing comments for our listeners?

Dr. Dave Dowell: 25:37

I guess my only comment or a couple comments would be as follows first. Thank you for having me. I really appreciate the opportunity to share these experiences. I personally learn a lot from hearing other people's experiences and taking parts of that and applying it to myself instead of having to learn it from scratch. So I really appreciate this opportunity and enjoyed it. I think one thing that I did not mentioned in the discussion today is we learned that it's impossible almost to predict the future. I've gone back and looked at emails from the past, whether it's March of 2020, or June and things we were thinking were going to happen did not happen. And we were completely off base. I remember when we left the office on March 16th, I said to one of my colleagues, I said, oh, I'll, I'll probably see you in a couple of weeks. And then we laughed. We said, oh, no, maybe next year. And here it is 17 months later. And I still haven't seen him face to face. I talked to him over the phone, so it's impossible to predict the future. So, so really the key I think is to plan for scenarios. And you have scenario A, scenario B, scenario C, D, whether it's on a customer level, supply chain level, where's the pandemic going to grow and not grow? How are governments going to respond to the pandemic? We've seen governments respond very differently to the pandemic as an example, how employees will respond to the pandemic. So just plan scenarios, prepare for those scenarios. And then as those unfold, you can explore those and push those further, but trying to predict the future, if anything, 2020 taught us that's impossible. And it seems to continue to be the case in 2021.

Dr. Patricio Duran: 27:14

Thank you very much, Dave. In the next episode, we will continue exploring COVID 19 business challenges with Maritz. Please join us. This is your host, Patricio Duran, having conversations that matter.

Voiceover Artist: 27:32

Thank you for tuning in to the SLU International Business Now: Conversations That Matter podcast. We invite you to subscribe to this podcast series so you don't miss any future episodes. To learn more about the Executive Master of International Business program, please visit biib.slu.edu. Again, that's biib.slu.edu. Currently we are accepting applications for the Fall 2021 semester.