Karen, just wanted to get your thoughts on the ability of other clothing manufacturers to pursue similar harm reduction strategies. Patagonia has a few advantages when it comes to this topic: they are privately held by their founder, they have an active and engaged customer, and thanks to their status as a near-luxury brand (“Patagucci”), presumably cushy margins. I would suspect that competitors, as a whole, have neither the motivation nor means to invest in these initiatives. I wonder if a statutory or self-regulatory regime will force the rest of the industry to adopt the same standards as Patagonia and price the cost onto the customer in unison.
Interesting point on NRGs potential decision to license their work. Two observations lead me to believe they might be inclined to do so. First, generation is a local business. NRG could pick and choose which “competitors” to supply with IP based upon geographical overlap of their portfolios. The Southeast and Pacific Northwest appear to be ideal candidates (http://maps.nrg.com/). Second, by sharing IP, NRG would help lower industry-wide emissions, which could stave off aggressive and costly government intervention.
Great post. Completing the last mile in a cost effective manner has for long been a major headache for logistics companies of all types.
I’m wondering if you have any thoughts on whether traditional delivery companies like UPS, FedEx, and the USPS are in pole position to solve the last mile or if drones will open the door to new competition. UPS and FedEx have a formidable strategic moat in their route density: as a newcomer to the market, it’s simply impossible to compete from a cost perspective with UPS if they are delivering 10 packages to a block where you are delivering one. But a small delivery drone goes out and back to a single home or business. It’s no longer the route density that matters, but proximity of package staging areas.
I agree with others that it’s surprising that the uptake of RFID technology in the health care supply chain has been surprisingly slow. I’m reminded of another digitization effort in health care that has fallen far short of exceptions: electronic health records (or EHR). One key issue in the uptake of EHR has been the lack of interoperability of systems supplied by different vendors in the space. Surprisingly, interoperability issues in EHR have persisted despite statutory remedies. One big reason? Competition. EHR firms have been loath to develop fully interoperable standards as they attempt to grab market share and keep switching costs high (https://catalyst.nejm.org/ehr-interoperability-blame-game/). I wonder if there’s a similar issue in RFID?
Sarah thanks for your take.
I’m reminded of this piece published by the Journal a little more than a year ago: https://www.wsj.com/articles/small-businesses-lament-there-are-too-few-mexicans-in-u-s-not-too-many-1480005020
The article highlights the plight of a roofer in Texas who has struggled to attract labor even after raising wages to above $20 per hour. Businesses where workers are required to perform labor-intensive jobs in dangerous or otherwise unpleasant environments are not only facing crackdowns on their undocumented workers, but also an increasingly tight labor market where low and moderately-skilled employees have many options. I’ll be interested to see how these firms deal with isolationist in the face of full employment and (hopefully) rising wages.
Chris, I have to take exception to your contention that a “skills gap” has much, if anything, to do with the state of Apple’s supply chain. The iPhone has only a few major components of any significant value – analog and digital integrated circuits (which must be designed and manufactured), and the screen.
Most of the integrated circuits are designed by American semiconductor engineers such as Qualcomm, Intel, Broadcom, and Apple’s internal design team. America is certainly not lacking premier design talent — in fact, a wave of consolidation has reduced headcount. Most IC manufacturing (by dollar value) is performed in the United States, Taiwan (by TSMC), and in Israel (at Intel’s fab there). While TSMC has seen growth of its market share, its success has not been driven by lack of talent at US competitors but by relatively low wages and innovative operating models.
Similarly, the success Korean firms have seen in LCD and OLED manufacturing has not resulted from winning a war on talent, but by investment in R&D and manufacturing scale, and the ability of the Korean conglomerates to suffer very low margins in the space.
So what do global partners in Apple’s supply chain do? Low skill, low value-add, labor-intensive assembly operations.
Ultimately, I see Steve Jobs’s complaint as an essentially baseless excuse, and not a serious criticism of our skill pipeline.