Damir Ljuboja

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On November 28, 2017, Damir Ljuboja commented on Sunrun: Confronting Solar Panel Import Tariffs :

Hey Mike, I think you’ve done a great job of clearly outlining the issues facing Sunrun and other solar panel companies that import their finished goods from manufacturing plants abroad. I agree with your point regarding the importance of considering the cost of capital in the determination of the worthiness of stockpiling inventory.

Another angle through which Sunrun and other companies could tackle this problem would involve the application of a legal lens. I wonder if they have considered investing capital in establishing plants domestically to which they could ship nearly-finished goods for final assembly domestically, and thereby avoid the tariffs that may be placed on finished goods. Although this is a bit of a loophole and I’m not a lawyer, if it works from a legal standpoint it could be an option worth considering relative to the alternative. It seems that in other situations this has resulted in reduced costs from the importer’s standpoint, at least in the short term. Consider the case of mosquito nets in sub-Saharan Africa. In some countries, tariffs were imposed on imported nets, but they were significantly higher for finished goods than work-in-progress [1]. This could be a less appealing alternative to the solution suggested by Karen above (incentivizing manufacturing partners to establish domestic operations in the US).

A more long-term approach through the same legal lens could entail increased lobbying efforts, especially if coordinated with competitors facing similar roadblocks.

[1] https://www.wto.org/english/res_e/reser_e/ersd201714_e.pdf

On November 27, 2017, Damir Ljuboja commented on The Bees are Dying! :

Jonathan, I thoroughly enjoyed your article on Chipotle and the bee crisis. Given the scale of this problem, I think Chipotle stands to earn a lot of goodwill in addition to reducing their costs if they are able to make a firm commitment to the bees and curb the impact of climate change on native bee populations.

One radical idea would be to consider capital investment in technology that is aimed at filling the void left by decimated bee populations. For example, autonomous bee robots or tiny drones that serve the same end would be an avenue worth considering. The Wyss Institute at Harvard is already looking into the matter and has produced an interesting breakthrough: Robobees [1]. According to their site, these are autonomous micro-aerial vehicles capable of self-contained, self-directed flight and of achieving coordinated behavior in large groups. Scientists in Japan are also exploring similar technological breakthroughs [2]. Although these technological prototypes are far from market, perhaps Chipotle should consider branching beyond delicious food and become the first major Robobee investor.

Check the first link out for some cool videos!

[1] https://wyss.harvard.edu/technology/autonomous-flying-microrobots-robobees/
[2] https://www.npr.org/sections/thesalt/2017/03/03/517785082/rise-of-the-robot-bees-tiny-drones-turned-into-artificial-pollinators

Darius, I enjoyed reading about your take on this Brexit-induced supply chain problem facing the Smurfit Kappa Group. You raise good points; I’m also concerned about the viability of their acute response to raise prices in order to offset an increased cost of sales and its impact on the bottom line. As you stated, paper is becoming increasingly commoditized and consumers are price-sensitive. Therefore this reliance on a pricing “lever” alone to offset rising raw materials costs is concerning.

To that end, I wonder what political levers Smurfit Kappa Group could pull. Would it be worthwhile to invest in lobbying efforts to perhaps persuade the passage of laws in their favor, such as those that could reduce import taxes on recovered paper fiber? Although lofty, this could result in a more viable, long-term solution. I agree with your point on locking-in contracts with raw materials suppliers to minimize these cost increases in the short term, or to bite the bullet and invest considerable capital today in mills that will guarantee low cost raw materials in the future. Given how quickly political winds may shift, I wonder what is the best route.

On November 26, 2017, Damir Ljuboja commented on The Doctor will Skype you now — The Digitalization of Medicine :

This is a very interesting topic, and I enjoyed reading your take on it! One area of medicine in which “outsourcing” has been established is teleradiology. In this field patient images recorded in one location, like x-rays and CT scans, are electronically transmitted to physicians in another location for reading and evaluation. Results are transmitted back to the ordering providers and appropriate next steps are taken for the patient. As you mentioned, a practice such as this is increasingly common in rural locations – physicians in Washington often read the scans of patients in Alaska. One particularly powerful takeaway from the uptake of this technology is seen in study turnaround times; one article I read on an Alaskan teleradiology project stated, “Teleradiology has greatly decreased the turnaround times for diagnostic interpretations from 9 to 21 days to within 24 hours and immediate response on emergencies” [1]. That’s an incredible improvement! And I think we can expect to see increased care delivery improvements as telehealth continues to expand. Interestingly, the growth of teleradiology has caused salaries to increase, instead of the opposite (as I would have expected) [2].

One concern I have heard both for teleradiology and telehealth as a whole regards outsourcing internationally. One the one hand, this would greatly reduce costs for the system. But on the other, there are concerns regarding malpractice accountability, as well as nonuniform quality standards (e.g. these physicians are not licensed or certified by US medical boards). As discussed in a relatively old New England Journal of Medicine article, I imagine that this will continue to be a hotly-debated and polarizing issue among the physician community in the United States [3].

[1] Chris Patricoski (2004) Alaska telemedicine: growth through collaboration, International Journal of Circumpolar Health, 63:4, 365-386, DOI: 10.3402/ijch.v63i4.17755.

[2] http://www.radiologybusiness.com/topics/healthcare-economics/3-radiology-takeaways-2017-physician-recruitment-report

[3] http://www.nejm.org/doi/full/10.1056/NEJMp058286#t=article

On November 26, 2017, Damir Ljuboja commented on Mercy: Delivering better quality healthcare at a lower cost :

Your article brings up important issues that are prevalent in healthcare today. I enjoyed learning more about Mercy’s approach and success thus far, particularly with regards to the observed change in surgeon behavior in the context of the increased cost transparency. In line with this, I think one area of focus would be at the very end of the supply chain: the physician users. As we discussed in an FRC case and also in the MKT case on Angiomax, physicians for the most part are not aware of the healthcare costs of the materials/supplies and medicines that they use for their patients. It would be interesting to see how a platform such as Mercy’s could be integrated with existing order software that is built into electronic medical record systems like Epic to augment physician ordering behavior on a hospital-wide scale. Therefore, a potential next step for Mercy could be to focus on establishing partnership agreements with these EHR companies to attempt to change ordering behavior on a large scale.

On November 26, 2017, Damir Ljuboja commented on Cholera’s Comeback vs. ICG’s Supply Chain: A Matter of Life or Death :

I really enjoyed reading this post, and it is very timely. I found a 2014 publication by Desai et al. that emphasizes the role a sudden increase in Cholera (outbreak) can play in the collapse of already tenuous water and sanitation facilities in developing nations. It seems that over half of the deaths due to Cholera occur in children ages five and younger, which only further emphasizes the importance of solving the supply chain problems you have highlighted.

Interestingly, the efficacy of the oral vaccine seems to be lower in children, and the article posits that this may be due to factors including protein energy and micronutrient malnutrition, parasitic infections, and intestinal mucosal damage following environmental enteropathy. I bring this up because perhaps another issue that needs to be addressed in nations where climate change is likely to result in increased Cholera prevalence includes childhood nutrition to potentially increase the effectiveness of the OCV and thereby reduce the likelihood of Cholera’s spread.

If anyone is interested in more background reading on this topic, here is the article I referenced: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5396246/