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On December 1, 2017, ibhullar commented on Amazon Dominating Competition with Tech-Driven Supply Chain :

Great write-up Aaron! Definitely agree, Amazon is doing some amazing things in leveraging technology and digitalization to enhance not only their supply chain expertise, but the customer experience as well.

However, I would challenge their ability to penetrate a market like China, where the incumbent Alibaba is already so well established. Rather than negotiate import agreements to China, which would make simply flipping the supply chain transfer lanes a bit tricky, and competing head to head with Alibaba in its home market, I think more value could be unlocked in further vertically integrated in markets like the US. As you mentioned, they’re already doing this with shipping freight and airplane distribution, but could they take this further by even integrating into production for several key products? In this case they would increase their margins even more.

Also, if Amazon continues to leverage digitalization to expand their global supply chain, I wonder what negative impacts this would have on society as a whole. We are always worried about monopolies but with an integrated global supply chain that is more efficient than any of its competitors, Amazon would hold a lot of power in the distribution business. So far, Amazon’s main competitive advantage has been simplicity and ease of delivery. But by vertically and globally integrating, they could reduce the prices on items further than just waving shipping fees, which could drive a lot of competitors out of business and Amazon into higher power [1].

[1] https://www.computerworld.com/article/3032656/retail-it/amazons-supply-chain-move-could-prove-devastating.html

Great analysis Sushant! Definitely interesting to read about the remote upgrade and predictive maintenance movement by Phillips, especially in an industry where digital innovations can often be excruciatingly slow.

I also think Phillips’ strategy to market it’s new ultrasound technology as a diagnostics-as-a-service model is smart. However, I wonder if this would further perpetuate the high healthcare costs we are seeing today, caused in large part due to the fee-for-service model as opposed to value-based healthcare. With such expensive technologies, I can see how it might make sense for the hospital to not capitally invest in the device itself. However, I can also see a problem in which companies like Phillips are incentivized to push this treatment in all cases, even when it does not add value, thus improving their revenues but putting a cost burden on the payers even when value is not added.

On December 1, 2017, ibhullar commented on Breaking the walls with 3D printing :

This is a fascinating read Caue! I’ve worked with 3D printers in the biomedical setting before but never considered this application to combat global trade barriers before. I think it is a creative way to at least retain the skilled labor (CAD designing) within the United States and only outsourcing the manufacturing of the products in other countries.

A few concerns I would have would be around the quality of parts made by these 3D printers, the security of sending confidential designs over the internet, and the global collaboration that could slow down prototyping. Specifically, you mentioned 3D printers are usually relatively inexpensive. However, as designs get more exact and 3D printed parts require higher levels of resolution, especially for aerospace applications, I would expect these costs to go up. Additionally, newer technological innovations would require further capital investments in printers at all production sites. Further, rapid prototyping is often a competitive advantage for companies like GE. Having the design and manufacturing split across geographies could hinder the speed at which this could be done for new product development. However, these could be offset by the speed advantage 3D printing technology provides when it comes to producing these prototypes [1].

[1] http://www.stratasys.com/resources/case-studies/aerospace

Fascinating article and great analysis! I agree that Ford, and all motor companies, need to keep a long-term lens when making such capital intensive investments as manufacturing plants. The short-term generation of 130 jobs for a $1.2 Billion investment does not seem like a great tradeoff unless Ford is gaining significant advantages by having those three new plants in the US.

However, I do see the long-term negative impacts this administration could exact upon the auto industry that would have implications long after the administration is out of power. One of these could be the major changes to NAFTA being discussed. I wonder if companies like Ford should make the short-term capital investments now to appease the administration in order to ensure that NAFTA remains in place. However, they should combine this with the lobbying against changes to NAFTA as they have been doing even recently [1].

[1] http://money.cnn.com/2017/11/28/news/economy/trump-car-companies-nafta/index.html

Thanks for the write-up TJ, great analysis!

I agree, it is admirable that Nespresso has become involved in so many initiatives to combat climate change. However, other than the training programs for farmers, I think the efforts are more focused on a marketing play rather than a practical one. I agree with Eugene above that the continued reliance on aluminum pods exhibits a reluctance to change due to perhaps brand image issues.

I do agree with your conclusion that Nespresso should invest more in genetically modified coffee plants that can thrive in harsher conditions caused by climate change. I would worry about the negative perceptions this may cause in the market though. To combat this, I think it would be prudent for Nespresso to proactively sponsor studies showing that genetically modified crops, specifically coffee plants, are indeed safe for consumption. Many such studies have come out in the past year (https://www.nbcnews.com/health/health-news/genetically-modified-crops-are-safe-report-says-n575436).

Great article and analysis Maha! I wholeheartedly agree that Cargill needs to do more, given its position as an industry leader in the global food market. I believe that all the conflicts of interest you stated are also Cargill’s greatest opportunities. Going beyond efforts of raising awareness and advocacy, I agree that Cargill must lead by example by setting much more aggressive targets. For example, rather than internally identifying a 5% reduction in greenhouse gas intensity as their 2020 goal, they can identify more effective targets use a more scientific approach recently outlined by Krabbe, et al in “Nature Climate Change” (https://www.nature.com/articles/nclimate2770).

All in all, if Cargill takes such a leadership role in holding itself to a higher standard, I believe the industry will follow, which has the potential for great impact given the industry’s current track record of being a big contributor to climate change.