Japan-based Nissan has manufacturing centers in 20 countries across the globe. According to the company website, they have design and production facilities in the UK but European regional headquarters are in Switzerland. I would argue that the likelihood of some import and export tariffs from a UK-based production plant are not worth the cost or trouble. I think Nissan should move the UK plants to continental Europe. UK automotive laborers would suffer but the potential marginal increase in production and selling costs do not justify keeping a manufacturing presence in the UK.
This is an interesting read and I think that Walmart’s buying power and sheer scale leave it uniquely positioned to help lead a manufacturing renaissance in the U.S. While I agree that Walmart should play a more active role in workforce training and education, I think assistance from federal, state, and municipal governments is necessary. The public sector not only has the power to allocate funding for education and training programs, it also plays a communication role in helping to match the demands of private enterprise with the education available (especially at state-sponsored schools). If manufacturers and retailers like Walmart were able to more clearly articulate skills gaps to both academic institutions and the public sector, more could be done to develop tailored training that will meet the long-term needs of American industry. Governments may also use tax incentives to encourage companies like Walmart to expand training and apprenticeship programs.
This is a very interesting topic that I am sure will continue to grow in prominence as time passes. Some insurance companies have adopted an interesting tactic in an effort to restrict the drivers of global climate change. For instance, according to Reuters, Zurich Insurance recently announced plans to devote $5 billion to impact investments that are aimed at reducing carbon dioxide emissions (among other social causes). Zurich expects to invest largely in “green bonds” and lend to companies that aim to have a positive impact on climate change. Zurich’s head of responsible investment stated that “…we can obtain OK market returns, on top of that we are doing something good.” She failed to also mention that if impact investing ultimately dampens the effects of climate change, resulting in fewer/more predictable natural disasters, it could save insurers a lot of money in reduced claim payouts.
I agree that Coke’s water replenishment goals and measurement systems are flawed. A recent article by Martha Pskowski in Truthout discusses Coca-Cola’s links to water shortage issues in Mexico. with the support of other sources, the article claims that Coke-affiliated bottling plants are to at least partly to blame for public-use wells that are drying up across southern Mexico. Climate change is only making matters worse as the areas rainy season is growing more inconsistent over time. In addition, the earthquake on September 7 disrupted water infrastructure, making the scare resource more difficult to access.
Coca-Cola’s water harvesting and reforestation projects elsewhere in Mexico and Central America have not addressed the shortage issues in the southern Mexican state of Chiapas. It appears that Coke has not come to the aid of community residents by assisting in the construction of new/deeper wells. Does Coke stand to sell more product in this community against the backdrop of the increasing cost of water? I have no evidence of this type of exploitation but one does wonder.
I found it interesting to hear how AmerisourceBergen Corp. is staying ahead of the curve on the implementation of “track and trace” legislation. I think the idea of monetizing their supply chain solutions by selling their technology to competitors, while helpful to the top line in the short-run, may undermine their competitive advantage in the long-run. Instead of selling their solutions to competitors, perhaps ABC could enhance their relationships with independent pharmaceutical distributors at the end of the supply by sharing their data and technology. If better tracking and logistics can help ABC with their own inventory management, I bet it would also be valuable to the end distributor as well. It may not be worth premium pricing of ABC drugs but it would certainly make ABC a more appealing partner if they are able to help distributors optimize their own inventory levels. In fact, this could encourage distributors to be more forthcoming with their own point of sale data and forecasts as well.
I also wonder if ABC could capitalize on it’s first-mover advantage by marketing it’s “ahead of the curve” solutions to the end consumer. Particularly as public sentiment has been tarnished by drug pricing schemes lately, ABC could garner respect and brand equity if it told it’s story of improved patient safety more broadly.
The complexities of the healthcare service model and supply chains certainly make this industry ripe for harvesting the benefits of digitization. I am impressed by BJC’s ability to decrease supply chain costs, reduce SKUs, and improve patient safety. One interesting supply chain dynamic that is unique to healthcare is the prevalence of physician preference items (PPIs). These items are often medical devices (like cardiac stints or artificial knees) over which the physician controls the purchasing decision. Different physicians may have different preferences and cost may not always factor into consideration. A paper by Kathleen Montgomery and Eugene Schneller that was published in The Milbank Quarterly proposes imposing a price ceiling on physicians for certain categories of PPI’s. This “payment cap” system is a top-down mechanism to control medical device costs, especially when physicians may not have the incentive to shop on price. However, this could result in sacrificing quality for cost. The real value will come when patient outcome data can demonstrate which medical devices are worth a premium price.