Faraz Ka

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Great article, AR – thanks for sharing. While I fundamentally agree with the idea of “circular economy”, I am skeptical of its successful adoption in the current business environment. Unlike Philips, which to your point has done a very good job of implementing this, other companies may not be able to move in the same direction simply because of the misalignment of such potential initiatives with the notion of shareholder value maximization. In the current business environment, adoption of “circular economy” will likely vary and be limited, depending on the industry –
for instance, most consumer packaged goods businesses will find it extremely difficult to become fully sustainable. As long as there is a demand on the consumer side, there will be companies supplying goods motivated by maximiznig shareholder value (i.e. profits). True change, in my opinion, heavily relies on the shift of consumer behavior towards sustainability.

On December 1, 2017, Faraz Ka commented on ‘Keep on Trucking’ : UPS and the digital supply chain :

Very interesting topic, Anusha. I agree with Eric’s point above and I’ll even push his thinking further – do you think a company like Uber has any incentives to partner with UPS? From what I know, current outrageous valuations for Uber are based on the premise that Uber will become a transportation company and use its fleet of cars and drivers to “deliver” not only passengers and meals but also packages and cargos. I think you are absolutely correct in that UPS should think about long-term strategic partnerships, but to Eric’s point, they might want to consider partnering with companies that offer complementary services like Amazon or other prominent e-commerce firms. I would also urge UPS to stay ahead of the competition in terms of driverless cars and trucks – if UPS falls behind in adopting the new technologies (for the sake of saving face with their employees) they may risk losing their competitive advantage and market leadership.

Great article, Gabby. While I agree with your second and third recommendation that Patheon should seek ways to generate medium-term cost reductions in the domestic production process, I am not sure if a domestically sourced supply chain is a viable solution for Patheon. API production specifically is controlled by a few major players, mostly overseas, and is an area that is almost impossible for a company like Patheon to break into. There are multiple examples of generic drug manufacturers that tried to vertically integrate by producing their own API and failed to do so. This goes back to the point that API business is an entirely different business than contract manufacturing and requires very different business models, resources, and skillsets. In my opinion, Patheon should focus on their core business, expand their capacity, and take advantage of the need and benefits of domestic drug manufacturing.

I generally agree with AS’s comment above, although I believe that it is not so obvious that Ecolab’s efforts in developing water treatment products helping customers reduce water usage are aligned with shareholder’s interest. Ecolab is in the business of providing water solutions and therefore the more water solutions they sell the more revenues they can generate – this, I presume, would put Ecolab and its management at a difficult situation with a possible conflict of interest. Should management maximize sales today or invest in R&D to provide more efficient solutions that although may require their customers to purchase less but would create a sustainable competitive advantage. This is a very interesting situation and I would love to know more about it – my initial thinking is that the management’s true incentives to innovate depend on the level of competition in the space (i.e. external pressure to innovate) as well as their customer’s sense of urgency in reducing their water consumption.

Great read, Justin. I agree with your privacy concerns and the comments made above, but I do also think there are potential (near-term) solutions currently under investigation that could potentially address some of your concerns. One “hot” area in the digital health space at the moment is the advent of blockchain and its use cases for healthcare data storage. There are over 20 companies, some blockchain-as-a-service (e.g. Bitmark, PokitDok) and some data repository services (e.g. Guardtime, Mint Health), tackling this very issue by applying various forms of blockchain technology to healthcare EMR data with the hope of creating a decentralized, anonymous, and safe data storage platform. I think the digitization of healthcare and clinical data is inevitable, and solutions addressing privacy concerns are just around the corner (I hope).

On November 30, 2017, Faraz Ka commented on Collaborative Robots as a hedge against Isolationism :

Great read, and a great company/technology. I really like the idea of “collaborative” robots – I think this positioning would allow for the better adoption of technology by traditional industries in the future, however, one key question moving forward is whether these “cobots” truly enable globalization or simply eliminate the need for the underlying labor content altogether? one could argue that this technology actually enables isolationism by providing domestic companies the means to avoid the need for off-shoring or outsourcing low-cost, low-complexity tasks, and essentially levels the labor playing field between developed and developing countries. I’m not necessarily suggesting that this is an undesirable outcome, but certainly, one to think about as we move towards more and more automation in the workplace.

Great read. Traditional PBMs, which were originally put in place as middlemen to make the distribution of medication easier and cheaper, have completely failed in their main objective, and have in fact introduced more inefficiencies and price hikes by dominating the distribution “black box” and maintaining a monopoly on information. Don’t you think given the existing broken system, the success of the business model you’ve described above, whether executed by Amazon or another retailer is inevitable?