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Arturo, thanks for the bringing this perspective to the ongoing NAFTA re-negotiations. One thing that remained a question for me was how are Nemak’s customers responding and dealing with these potential changes? I believe that would be a key pieces of information to determine what path Nemak should pursue. Overall, it sounds like most American OEMs are against a wholesale change to NAFTA, having recently organized a coalition to lobby the Trump Administration during this re-negotiation process [1]. However, it does appear some are preparing for drastic changes, with Fiat Chrysler CEO saying “the company has designed its future truck production strategy so that trucks currently made in Mexico could be made in the United States if NAFTA is scuttled” [1]. Getting in touch with my customers would be my first priority, as the economic benefit, and potential economic damage, has been and will be felt by them as well.

[1] Shepardson, David. “Auto industry tells Trump ‘We’re winning with NAFTA'”, Reuters, October 24, 2017. , Accessed November 2017.

On December 1, 2017, Bo commented on BMW’s supply chain in the face of isolationism :

Thanks Thomas, I am certainly hoping they overcome the myriad of challenges given I’d like to own one of their cars here in the U.S. someday…As you mention, there are several strategies BMW can leverage to combat the isolationist rhetoric in the U.S., which, to be fair, is all it has been thus far: rhetoric. You mention local procurement and manufacturing, but I was curious what technical or operational changes could be made in addition to these more strategic shifts? This past summer, BMW and GE invested in a startup called Xometry based in Maryland that essentially functions as a marketplace for small, custom manufacturers and large scale manufacturers like GE and BMW [1]. This is an interesting strategy because it pairs large scale industrial giants with the long tail of American manufacturers. The National Association of Manufacturers in 2014 estimated there were nearly 252,000 manufacturing outfits across the country. More than 248,000 employed fewer than 500 workers, and nearly 190,000 had fewer than 20 employees [1]. This platform would seemingly give BMW access to this supplier and parts network in a much more efficient manner, and eliminate the need for their own production plant or imports. If BMW scales this investment or acquires it outright, it would perhaps signal a shift to a more asset-light, platform marketplace model for operating in the U.S. However, this does also contribute to the risk you identified of BMW losing its role as the main value generator in the chain.

[1] Soergel, Andrew, “BMW, GE Commit Millions to Digital Manufacturing Marketplace”, U.S. News & World Report, posted June 28, 2017. , Accessed November 2017.

On December 1, 2017, Bo commented on Monsanto: Our climate change Messiah? :

Aaron, intriguing to think of Monsanto as our savior given the poor public perception and relationship at the moment. But, given their undeniable scale and capabilities, I think you are probably right in that some form of GMOs can play a role in combating climate change and meeting rising global food demand. To be fair, humans have been modifying organisms through cross-fertilization for centuries, so GMOs are nothing new. However, the introduction of synthetic materials into the genetic makeup of seeds certainly seems to have some negative effects, for both the crops and our health. Given they do have a role to play, I was curious as to how much their GMOs have actually increased crop yields? From even the most casual google search, it is clear there are vastly differing opinions on this matter, but several sources seem to agree that there are increased yields to be had [1]. And, according to PG Economics, there has been widespread increases in crop yields from the use of Monsanto’s GM seeds, ranging from a 9% increase in soybeans in Mexico to a 50% increase in cotton in India [2]. The other benefit Monsanto seems to claim is the reduction in greenhouse gas emissions from less pesticides being required. So, while I do agree Monsanto could be tackling the problem better from a PR perspective, GMOs, when explained and used properly, can and will be a helpful solution to the negative impact global climate change is having on our ability to feed the world.

[1] Klümper W, Qaim M (2014) A Meta-Analysis of the Impacts of Genetically Modified Crops. PLoS ONE 9(11): e111629.
[2] Monsanto News, “Do GM Crops Increase Yield?”, May 6, 2017. , Accessed November 2017.

On December 1, 2017, Bo commented on Kellogg’s Leadership in Fighting Climate Change :

Dawitt, thanks for shedding some positive light on the maker of some of my favorite childhood cereals and snacks. While much of your article helps explain the goals and benefits for Kellogg as it relates to reducing GHG and combating climate change, I’d be interested to understand the cost structure dynamics at play here as well. You mentioned the financial impact of extreme weather events and input costs for corn and rice on the rise, but what are the costs of developing water reuse projects or low-carbon energy in its manufacturing plants? I also would agree with your point about Kellogg protecting itself from cost inflation and operational cost overruns, but I wonder what those savings realistically look like? Taking a look at high-level financials, it appears gross margins have compressed slightly over the past few years, but it operating margins have increased [1]. It would be difficult to attribute this to any particular eco-friendly business practice, but I did find that Kellogg has been working with OSIsoft on several of these energy efficiency initiatives. In a report published in 2016, OSIsoft claimed they saved a Kellogg manufacturing plant $3.3 million annually from reduction in energy costs [2]. This would seem to be quite a substantial impact given they have over 50 manufacturing plants worldwide. I hope Kellogg is able to recognize and publicize these results going forward, as it will certainly help them make a larger, industry-wide impact.

[1] Morningstar Research, Kellogg Company, , Accessed November 2017.
[2] Gothberg, John. Driving Sustainable Results in Energy Reduction. 5 April. 2016. Web. 28 March 2017

On December 1, 2017, Bo commented on Personalized Medicine, Personalized Supply Chain? :

Thanks Author for bringing attention to these leading-edge cancer treatments. It’s no question that immuno-oncology and gene therapy have become a massive area of research and development for big pharma [1], but I wonder if there are other players than Novartis who are better equipped to handle the supply chain and logistics piece of this puzzle? For example, McKesson, who has been doing drug supply chain for decades, acquired two businesses in the oncology space in February 2016, one of which provides rapid and traceable oncology pharmaceutical delivery solutions [2]. In addition, there are several life science cold-chain logistics players such as CSafe and Envirotainer that also have some expertise in time and temperature sensitive shipments. It seems critical to either decentralize production, as others have pointed out, or leverage existing industry players who have the manufacturing and distribution lines already established in order to expand beyond the 35 treatment centers. Novartis appears to have taken such a hard stance on developing the capabilities internally that it is unlikely they try that route, but nonetheless I think it will be a particularly difficult road ahead to accomplish their vision. Finally, while Cell-T and other treatments like it are exciting to consider, it is still very early days in the approval and efficacy process for many of these treatments and a wholesale investment in a sophisticated and robust supply chain may be premature.

[1] QuintilesIMS, “Global Oncology Trends 2017, Advances, Complexity and Cost”, June 2017. , Accessed November 2017.
[2] McKesson Expands Oncology Expertise with the Acquisitions of Vantage Oncology and Biologics
February 25, 2016
[3] Rodríguez Fernández, Clara, “A Cure for Cancer? How CAR-T Therapy is Revolutionizing Oncology”, posted on July 3, 2017. , Accessed November 2017.

On December 1, 2017, Bo commented on Bringing Mortgages into the 21st Century :

Thanks Mike for the thoughtful and well-articulated piece. While I agree that the digitized notary experience is the future for this space, I would push back on the assumption that Wells Fargo needs to lead this charge or focus a lot of attention here. There appear to be so many more pressing and near-term opportunities for digitization along the mortgage process that could have more substantial cost savings. The mortgage timeline is still around 50 days, and the process is very human capital intensive, costing $8,000 per completed mortgage [1]. In addition, individual sales agents are originating more loans on their own than some of the leading online brokers out there, which leads me to believe there are areas further up the chain from closing to focus on [2].

That being said, it obviously behooves Wells Fargo to pay attention to this part of the chain, and it appears they have to some extent already, naming Pavaso, a provider a digital process and collaboration solutions for real estate, as an approved vendor for eClosings in May 2016 [3]. And, if they are going to continue down this path of digitized closings, it may make sense for Wells Fargo and other mortgage players to look into blockchain technology as a source of verification. That may be an even longer regulatory approval march, but certainly a more cost-effective and secure method.

[1] Ellie Mae, “Origination Insight Report”, June 2016. , Accessed November 2017.
[2] LaRue, Aaron, “Why startups can’t disrupt the mortgage industry”, TechCrunch, posted Apr 21, 2016. , Accessed November 2017.
[3] Swanson, Brena, “Wells Fargo’s Pavaso approval brings digital mortgages a step forward”,, May 31, 2016. , Accessed November 2017.