Ti Gillespie

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On November 14, 2018, Ti Gillespie commented on Volkswagen: Additive Manufacturing as a Tool for Success :

I agree that acquiring a firm to augment the capability already developed by Volkswagen Autoeuropa would be a good move to ensure the company stays ahead of the changes additive manufacturing will bring to the automotive industry. In terms of incorporating them in to the current production process I would suggest creating an Additive Manufacturing Center of Excellence to drive development and adoption of the technology within VW (and within VW’s supplier base where it makes sense). They can get started by doing break even analysis on current parts to establish a cost comparison of additive manufacturing vs traditional methods. One thing they’ll need to make sure is that they’re incorporating all of the relevant costs related to a conversion to additive manufacturing, “additional savings can be realized when inventory and logistics costs are taken into account, resulting in impacts throughout the supply chain…Parts can be printed just in time and/or via a PULL system which has a positive impact on inventory costs. Less transportation is needed since multiple parts of one product can be printed at once, eliminating the need for assembly, which positively impacts logistics costs.” [1].

[1] PricewaterhouseCoopers. “A Cost Perspective on 3D Printing.” PwC, http://www.pwc.be/en/news-publications/insights/2017/cost-perspective-3d-printing.html.

On November 14, 2018, Ti Gillespie commented on San José Tackles Open Innovation for Smart Cities :

Really enjoyed reading this! I think it would be interesting to see what MOTI and other cities are doing to source issues or ideas for city improvement from their ultimate consumers, the citizens living in the city. I know from experience that the tools that citizens have at their disposal to suggest and spur action on simple changes (such as the addition of a crosswalk) are often limited. Collecting these concerns in a structured and robust way would allow the city to collaborate with both its citizens and its partners to develop meaningful solutions to problems. This connects with the lean methodology in that some of the greatest solutions come from ideas generated by those on the front lines of the operation.

On November 14, 2018, Ti Gillespie commented on Roche: Machine Learning Brings a Big Pharma Business Model Under Siege :

Very interesting topic! One way I see the incumbents in the industry attempting to maintain their competitive position and improve the efficiency and effectiveness of their R&D spend is to supplement their internal R&D with structured external R&D programs. For instance, Johnson & Johnson has a program called JLabs that was established to develop an incubation model for J&J’s biopharmaceutical business [1]. Others in the industry have adopted this approach as well. “The goal of these efforts is to access the vast pools of innovation outside the walls of the in-house R&D organization and tap into the entrepreneurial risk-taking culture of biotech to secure a future pipeline, while avoiding the well-appreciated and suffocating burden of larger bureaucracies on creative research.[2]” This approach allows large pharmaceuticals companies to rely on small, agile partners for innovation and they can focus their efforts on commercialization of promising drugs that result. I believe they can leverage this approach with their ability to manufacturer large quantities of product in a highly regulated industry and their network of physicians to sustain their position in the value chain. They’ll need to continue to adapt, as Roche is doing, to ensure they maintain their role.

[1] “About Us.” JNJ Innovation, 19 Oct. 2018, http://www.jnjinnovation.com/about-us#par-44.
[2] Booth, Bruce. “Positive Impact Of External Sourcing On Pharma R&D Productivity.” Forbes, Forbes Magazine, 16 Dec. 2016, http://www.forbes.com/sites/brucebooth/2016/12/16/positive-impact-of-external-sourcing-on-pharma-rd-productivity/#122d8a613863.

On November 13, 2018, Ti Gillespie commented on Breaking the Molds: 3D-Printing and The Future of Shoemaking :

I don’t believe we’ll move to a 100% personalized footwear world in the near term. My reasoning is based on the high-volume nature of the shoe industry and the lack of value add for customization in non-performance shoes. Americans purchased 7.5 shoes per capita in 2013 [1]. This is a significant figure and a make to order approach like 3D printing would have difficulty satisfying this type of demand without major investment. Additionally, for casual, non-performance shoes, I don’t believe perfect fit is as pressing a requirement. On the luxury end there are a lot of shoes that sell because of the hand-crafted approach used and I believe that will maintain its customer appeal going forward. In summary, I could see a world soon where high-performance shoes are printed to ensure a fit that enhances performance, but I believe the non-performance category (particularly the luxury shoe markets) will remain with the traditional methods of manufacturing for a long time.

[1] Footwear – US Consumers Bought 7.5 Pairs of Shoes per Capita per Year.” APLF, American Apparel & Footwear Association , 20 Jan. 2015, http://www.aplf.com/en-us/leather-fashion-news-and-blog/news/22557/footwear-us-consumers-bought-7-5-pairs-of-shoes-per-capita-per-year.

I believe that this open innovation approach for established beauty companies such as Nivea can be a strong way to counter the collection of new entrants to the market that are seeing success with a direct to consumer model. One of the reasons these smaller companies have been successful to date is their ability to tweak the product based on customer feedback and the speed with which they launch those amended products [1]. As your review demonstrates, the open innovation approach shows Nivea has the same intentions in terms of rapid new product launch. I do question their, and other large beauty products company, ability to do this as well as a startup and wonder whether it is as effective as incumbent companies acquiring startups as “sources of product innovations, new markets, new customer connections, and community-building – an energy source for constantly rejuvenating the parent organization. [2]”

[1] “A New Class of Startup Is Upending America’s Consumer-Goods Industry.” The Economist, The Economist Newspaper, 16 Nov. 2017, http://www.economist.com/business/2017/11/16/a-new-class-of-startup-is-upending-americas-consumer-goods-industry.
[2] Sobkowiak, Roger T. “Corporation Start-Up Dynamics: How the Parent Corporation and the Start-Up have to Change.” HR.Human Resource Planning, vol. 25, no. 3, 2002, pp. 18-28. ProQuest, http://search.proquest.com.ezp-prod1.hul.harvard.edu/docview/224571272?accountid=11311.

On November 13, 2018, Ti Gillespie commented on Machines Learning: Caterpillar Inc.’s Metamorphosis into Big Data :

I believe that firms like Caterpillar, who don’t have Data Analytics as a core competency currently, should leverage a hybrid model where they outsource the development of the analytics and insource the strategic understanding of applications for analytics. This way they have the functional knowledge supplied by a trusted partner coupled with the industry knowledge within their organization. “The shortage of analysts — particularly those capable of developing and leading world-class teams that can enable a company to create a competitive advantage from its data and analytics — is driving organizations to consider outsourcing their analytics activities. However, choosing analytics providers and structuring effective working relationships that deliver value require managers to have a clear understanding of what they’re looking for and the potential risks involved (Fogarty & Bell) [1].”
With Caterpillar’s minority investment in Uptake, it appears they are well positioned to follow this approach and use a partner with analytics as a core competency to effectively build their analytics capabilities. Per the commentary from Fogarty and Bell, I believe Cat Asset Intelligence and Uptake can augment each other as the company progresses their analytical offerings.

[1] Fogarty, David, and Peter C. Bell. “Should You Outsource Analytics?” MIT Sloan Management Review, MIT Sloan Management Review, sloanreview.mit.edu/article/should-you-outsource-analytics-2/.