JV's Profile

Great article Sumit! Fascinating take on the affect of isolationism on a industry that is already significantly influenced by government policy.

I agree with Kristina and EMC that a risk of stockpiling solar panels is the potential for obsolescent inventory due to rapid technology developments. The greater concern for me is the effectiveness of this risk mitigation strategy. What impact does doubling inventory have in the face of economically destructive tariffs? It allows Sunrun to operate for three more months. After that, as Sumit has stated, price-sensitive homeowners will not purchase solar. At the glacial pace of legislation and government policy, putting the business on life-support for three months does not meaningfully make the horizon of Sunrun any brighter.

Considering financing as a supply chain affected by isolationism is very interesting. I am curious under what circumstances isolationism is good for financing. Perhaps when a country is not an attractive place for investment, restricting the movement of capital out of the country may be a good thing. This may also come with a basket of negative consequences.

I think isolationism in financing, while negative for JPM, creates great opportunity for local banks. In Hawaii there is no retail banking presence from any mega-banks such as JPM. Hawaii has somewhat natural isolation from capital because of it’s distance from the mainland, its relatively small population, high real estate costs, and stiff local competition. [1] The two largest banks, First Hawaiian Bank and Bank of Hawaii, are both local with a combined 68% market share. Is this good for consumers? Is this good for the local economy? While retail banking is only one segment of banking, I think a study of Hawaiian natural banking isolation could shed some like on the affect of isolationism on capital.

[1] Ellis, Blake. “Hawaii: No paradise for the Megabanks.” CNN Money. Turner Broadcasting Systems. 28 Nov 2012. Web. 1 Dec 2017.

Thanks Aaron! I raelly enjoyed reading this.

It’s all about what’s at stake. Since the first genetically modified organism (GMO) was made in 1973, there has been many uses for genetic engineering. When we think about GMO, we tend to think of food. Some people are staunchly against eating GMOs. I would wager that many of those same people would not abject to using a live-saving cancer medicine even if they new it was made using GMOs, as most of these”biologic” medicine. It’s about the stakes– their life. Perhaps when the stakes for food are raised– climate change compromising food security– these same folks will thing twice about there GMO objection.

I agree that Monsanto should publicize this initiative to create goodwill.

I disagree that the FDA should stipulate supply chain security and inventory levels for pharmaceuticals. Your example of pharmaceutical manufacturing in Puerto Rico is an excellence example as to why. Section 936 of the Internal Revenue Code, the United States Federal terms that govern Federal taxes, gave mainland United States companies an exemption from Federal taxes on income earned in Puerto Rico. [1] Puerto Rico would not be a attractive location to base pharma manufacturing in for many reason, and the risk of hurricanes is one of them. I lay blame for stock-out risks from hurricanes on government interference in the free market. Adding additional government interference as you are proposing is not the answer. But what is? Don’t ask me.

[1] Rohter, Larry. “Puerto Rico Fighting to Keep Its Tax Breaks for Businesses.” The New York Times., 10 May 1993. Web. 1 Dec 2017.

Thanks you Lia!

I agree with you that integrated supply chains are critical to ensuring minimum stock and on-time delivery. Since vertically integrating is highly unlikely for LuluLemon, this is the next best thing, and potential a smarter business decision considering the expertise and assets required for vertical integration is usually not recommended for apparel. My concern with the approach is that RFID tracking and inventory control is still a lagging indicator. Fashion tastes change and can not always be predicted by algorithms. We saw this in the GAP case. How do we balance the efficiency of a integrated, efficient supply chain with the agility and intuition of a LuluLemon fashionista?

Fascinating take on digitization in the medical device industry and how it can help (or hurt) patients and the bottom line. In an article published in the Journal of American College of Cardiology, a meta-analysis of studies published between 200 and 2008 studying the effect of, “remote patient monitoring (RPM) on the outcome of chronic heart failure (HF) patients,” in which, “a transfer of physiological data using remote access technology via remote external, wearable, or implantable electronic devices.”[1] This is very similar to the situation Medtronic is solving for via digitization of pacemakers, although dated. The study showed that, “[randomized control trials] and cohort studies showed that RPM was associated with a significantly lower number of deaths (RCTs: relative risk [RR]: 0.83, 95% confidence interval [CI]: 0.73 to 0.95, p = 0.006; cohort studies: RR: 0.53, 95% CI: 0.29 to 0.96, p < 0.001) and hospitalizations (RCTs: RR: 0.93, 95% CI: 0.87 to 0.99, p = 0.030; cohort studies: RR: 0.52, 95% CI: 0.28 to 0.96, p < 0.001) I take issue with the reality of the limited time health care providers have to spent on broad sets of patients."

In short, it is not a stretch to say that digitization of medical devices will help patients.

That said, any increase in the time a healthcare provide spends on a patient leads to better outcomes. [2] Perhaps the digitization just makes it more fun, more efficient.

Regarding supply chain cost for Medtronik: I am curious why costs are so high as a percentage of revenue. The 40% figure seems to exceed other industry costs that could also benefit from supply chain digitization. What unique challenges to this space will digitization solve?

[1] Sebastian Winkler, Friedrich Koehler. "A Meta-Analysis of Remote Monitoring of Heart Failure Patients." Journal of the American College of Cardiology, Volume 55, Issue 14, 6 April 2010, Pages 1505-1506

[2] Dugdale, David C, Ronald Epstein, and Steven Z Pantilat. “Time and the Patient–Physician Relationship.” Journal of General Internal Medicine 14.Suppl 1 (1999): S34–S40. PMC. Web. 1 Dec. 2017.

An exciting article in the news (URL pasted below): The article states that, “before a generic reaches the market, it must be shown to be equivalent to the brand-name drug. But proving this requires samples that pharmaceutical companies are often unwilling to provide.” This is a sincere risk of major biopharmaceutical companies having complete control of there end-to-end supply chain. With such a huge incentive to keep out generic competition, firms can withhold samples needed to conduct trials to show equivalence, essentially making their own eternal patent. How likely do you think this will be in the future?

https://www.wsj.com/articles/how-big-pharma-sandbags-generic-competition-1510701694