Enforcing other country’s laws in the US

Posted on September 13, 2011 by aviyer2010

Another report on Gibson guitars in the Economist (Sept 3, 2011) describes the rosewood related production shutdown at Gibson guitars that we discussed earlier. But it claims that US manufacturers have to abide by every plant and wildlife regulation set by any country. Companies claiming they did not know of a regulation are not allowed to use it as an excuse. Even if the country that has the law but does not enforce it in their country, it would be enforced in the US. Gibson’s experience with improting ebony imported from Madagascar, which permitted those exports were legal, but were still impounded by US agents. Should the US Fish and Wildlife Service focus on enforcing other countries laws ? Should companies be allowed to provide legal documentation from the source country as proof ? Is impouding the inventory the best way to manage supply chain impact ?

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Innovative use of wool as an oil spill solution

Posted on September 13, 2011 by aviyer2010

An article in the Economist (Sept 3, 2011) describes a businessman in a wool fabric producing region of Italy who have experimented with the use of wool to soak up oil from oil spills. Their tests show that coarse wool can soak up 10 times its weight, and, after the oil is squeezed out, be reused several times. A patented system to use wool soak up oil spills in the ocean has been developed.  The resulting system would have cleared up the Deepwater spill in the US at a fraction of the cost. Is this the kind of innovative deployment of skills that will save jobs in Italian artisan focused towns ? Should the Italian govt or the EU subsidize the research for such ideas as an investment for growth ? What is the appropriate role for the oil producing companies in nurturing such innovative solutions ?

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Drug Shortages in the US – other issues

Posted on September 13, 2011 by aviyer2010

An article in the Economist (Sept 3, 2011, pg 29) describes the increase in drug shortages from 58 drugs in 2004 to 211 in 2010 and 198 by Sept 2011.  Most of these drugs are generics whose prices are set low by Medicare Part B, thus only justifying one or two manufacturers worldwide.  These drugs include cytarabine for leukamia, electrolytes for premature babies etc. As described in an earlier blog, Congressional focus is on requiring firms to inform the FDA in advance of impending shortages. In other cases, the FDA has permitted imports of drugs unapproved in the US as a last minute alternative. What is the fundamental fix – the monopoly of Medicare in setting prices that are too low ? Should hospitals bepermitted flexibility in pricing to prevent shortages ? Is there such a thing as too concentrated a supply base that is generating these risks ?

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Managing an air traffic control tower from afar

Posted on September 8, 2011 by aviyer2010

An article in WIRED magazine (http://www.wired.com/magazine/2011/08/st_flybywire/) describes technology used in Sweden that can provide a 360 degree hid-def screen view of aircraft and detailed data around a control tower. The benefit is that a air traffic controller can be located at a remote location and guide traffic into the airport. The technology permits many different airports with low traffic to share a controller, albeit at a distance.  How many other tasks can be similarly outsourced to distant locations if the data fidelity and quality can be improved ? Would these technologies only be relevant for small airports or could there be an oversight role across large airports for which such technology would be relevant to prevent catastrophic events ?

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Manufacturing Productivity and Small Business Survival

Posted on September 8, 2011 by aviyer2010

A New York Times article (Sept 7, 2011) describes the labor productivity increase for a small manufacturer with labor costs holding at $ 337 per hour from 2005 to 2010 but the number of employees dropping from 20 to 40 while revenues rose from 1.5 to 2 million.  The mix of employees at the firm changed with fewer people on the shop floor and more in the office, and capital equipment to improve efficiencies increased over time.  But significant increases in productivity in using the machines maintained competitiveness at the cabinet making plant.  Is steady increases in productivity the best approach to maintaining competitiveness ? Are the shifts from labor to capital while maintaining higher skilled labor the expected trends in this industry ? Is the focus on maintaining a long term workforce that is ready to provide improved productivity the key asset of this firm ?

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Are Samsung’s Galaxy Tablet Sales real ?

Posted on September 5, 2011 by aviyer2010

An article in CNN Money (http://tech.fortune.cnn.com/2011/09/04/samsung-on-the-run/?utm_source=pulsenews&utm_medium=referral&utm_campaign=Feed%3A+fortunebrainstormtech+%28Fortune+Brainstorm+Tech%29) describes a statement by a manager at Lenovo that suggests that Samsung’s purported 1 million Galaxy Tablet units shipped to retailers generated just 20,000 units of sales. Did Samsung stuff the channel to gain reputation as a competitor to Apple ? Will the supposed dismal retail sales mean a frustrated channel that will seek to return unsold product ? Will strategies regarding the tablet hurt Samsung’s smartphone sales ? Or is this the claim of a Samsung competitor that is trying to generate their own Android based tablets ?

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Plans to fix the US Postal System to avoid closure

Posted on September 5, 2011 by aviyer2010

A New York Times article (Sept 5, 2011) describes the financial crisis at the US Postal Service, which saw volumes decline by 22 % in the alst five years and is estimated to loose another 30 % of volume in the next 9 years.  Proposals to solve the operations problems include shutting post offices but sharing facilities with retailers, delivering to customers on behald of FedEx and UPS, cutting sorting facilities from 500 to 200, delivering wine and beer etc. Current laws prevent the Post Office from acting as banks or selling insurance, as they do in Europe.  Should the US Postal system be treated as an externality, like roads, and thus be treated as part of society’s competitiveness in enabling firms to operate at low price points ? How should local delivery costs be factored into calculations regarding the best way to reform postal service operations ? Should the Postal service be permitted to increase the scope of its operations to improve overall finances ?

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The “Job Creation vs Environmental Regulation” debate in the US

Posted on September 5, 2011 by aviyer2010

A New York Times article (Sept 5, 2011) describes the current debate in Washington between the Federal government’s planned pollution reduction regulation and purported industry impact. Some E.P.A. studies show that regulations such as the Clean Air Act have been a modest job creator as a result of technology spending for compliance. But three factors seem to be a cause for worry for industry – (a) Even if the long term gains to health and housing are significant, is the timing of the regulation, during a recession, correct ? (b) given competing possible regulatory choices, the uncertainty of the final regulation creates incentives for industry to put off capital investments that might spur growth and (c) Once a regulation is on the books, it remains unexamined for its net impact.  Should US environmental laws be examined for their role in maintaining US Industry competitiveness ? Should pollution regulation be justified on the basis of impact across the US society i.e., counting health and housing benefits against possible industry costs ? Is there a correct timing for pollution regulation enactment ?

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Changing the mix of China’s automobile production

Posted on September 4, 2011 by aviyer2010

A New York Times article (Sept 4, 2011) describes a shift in emphasis in China from increasing manufacturing volume to higher mileage cars.  Car sales increased by 5 % in 2011 compared to a 33 % increase in 2010. Officials in Beijing cut the number of new car registrations by 30 % in an attempt to reduce congestion.  Recent discussions by authorities suggest that such trends may be adopted in other cities.  But there are moves to focus on increased mileage and pollution controls, as China attempts to prepare its auto industry to compete globally.  But a slowdown in growth in China will affect not just Chinese automakers but all of the world’s top brands that depend on China for growth. Is China’s abrupt proposal to cut volumes and incent a shift to battery or other powered high mileage vehicles a credible way to change the auto supply chain ? How will the flexibility to limit vehicle registrations by cities impact industry sales volume and product mix across the country ? Do you forsee that such a policy will speed up China’s auto industry’s global competitiveness ?

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Posted on September 4, 2011 by aviyer2010

Amazon.com Widgets

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