Street Talk: Moving the chains

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A Western Michigan University expert in supply chains and risk mitigation estimates we are two to six weeks away from serious disruptions as the result of the coronavirus, but its overall economic impact will be minimal if demand for products and services holds.

Collectively, the U.S. and Chinese economies account for around half the world’s economic activity and output. When events happen that impact both countries simultaneously, such as tariffs, followed by a large-scale epidemic, it is bad for everyone, said Sime Curkovic, WMU professor of supply chain. However, he said it is not the size of these economies or their trading partner relationship that intertwines them so deeply; it is their supply chains.

“Supply chains are systems of resources, people and organizations that are involved in getting something from supplier to customer,” Curkovic said. “A significant part of America’s supply chain is in China and, likewise, a large part of China's is in America.”

For example, almost everything Apple makes is assembled in China. Apple announced Monday that work is starting to resume around China, but the company is experiencing a slower-than-anticipated return to normal conditions.

Normally, when a supply chain is disrupted, it can be moved by relocating people, parts, tools and equipment via land, air, water and rail, Curkovic said. Companies and industries shift and move their supply chains in record time back and forth simply for risk mitigation purposes — exchange rate fluctuations, trade decisions, and weather forecasts all affect supply chain decisions.

The bad news in this case is that moving supply chains requires people, and those individuals may be quarantined or have symptoms of the virus.

“If you want to move any portion of your supply chain from China to anywhere else, then there is 100% certainty that you increase the risk of exposure to the coronavirus,” Curkovic said, noting that there are two choices.

One, supply chains shut down until exposure risks are contained — an option that would have enormous consequences when inventory runs out and economic output ceases. He estimates two to six weeks until this happens for many companies.

The second option is to attempt to get people back to work, moving bits and pieces of supply chains when possible. However, any supply chain moves could come to a halt if the virus escalates.

“There are serious supply chain failures occurring because of this virus, and there might be disruptions and delays in customers receiving goods and services,” Curkovic said. “Yet, the coronavirus is not a worldwide pandemic. There may be delays and disruptions, but from an economic perspective, that is not critical if demand is not impacted.”

Pill bill

In a move to help with rising health care costs, Walmart-owned warehouse club Sam’s Club is piloting a new program in Michigan that’s aimed at helping local residents better manage their prescription drug costs.

The pilot program gives Plus members access to 10 medications at zero cost.

For a limited time, the company is offering a free 30-day supply for one year on qualified prescriptions. Drugs included in this program are used to treat common conditions like high blood pressure, diabetes, and allergy/asthma, as well as mental health.

“The overall cost of pharmaceuticals makes up a high percentage of health care expenditures for families,” said Lori Flees, senior vice president for health and wellness at Sam’s Club. “Offering these benefits and cost savings through our Plus Member Pharmacy benefit program is something we are proud to be able to provide our members.”

Americans spend on average about $1,200 on prescriptions drugs per year, according to data from the Organization for Economic Cooperation and Development.

If the pilot program in Michigan is a success, Sam’s Club will eventually roll out these savings across the U.S.

Drugs included in the program for $0 include: Amlodipine and Lisinopril (high blood pressure); Metformin and Pioglitazone (diabetes); Escitalopram and Sertraline (mental health); Montelukast (allergy/asthma); Donepezil (Alzheimer’s); Finasteride (men’s health); and Vitamin #2 50,000 IU (women’s health).

Members must initially fill the qualified prescriptions at a Sam’s Club pharmacy before April 20 to qualify for free pricing.

Fabulous 40

Greenridge Realty kicked off its 40th anniversary by recognizing more than 50 of its top agents and real estate professionals at its annual award celebration Feb. 7.

The commemorative celebration was the first of many Greenridge has planned for this year.

“It’s been an honor to help grow West Michigan over the past four decades,” said Tom Paarlberg, former president of Greenridge Realty and current CEO of Greenridge Service Group. “I am proud of all that we’ve accomplished since opening our doors in 1980. We look forward to continuing our impact with the second-generation leadership team who will champion Greenridge Realty over the next 40 years.”

The top five real estate agents were agent of the year Kendall Grashuis, East Grand Rapids; Scott Harestad, Grand Haven; Debby Stevenson, Ludington; Jess Garrison, Grand Haven; and Darin Elliott, Ionia.

Founded in 1980 as a 30-person real estate firm, Greenridge Realty now employs more than 430 agents across 26 West Michigan offices.

Stamp of approval

With the stroke of a pen, it’s done.

U.S. District Judge Janet Neff has put her signature to a consent decree that will allow the state of Michigan, Plainfield and Algoma townships, and Wolverine Worldwide to move forward with a $69.5 million settlement agreement extending municipal water to the townships affected by PFAS contamination of groundwater.

The Rockford-based maker of apparel and footwear announced on Feb. 4 it entered into a consent decree with the parties that formalized the tentative agreement previously announced.

Neff signed off on the deal on Feb. 19.

That morning, Plainfield Township Superintendent Cameron VanWyngarden issued the following statement: “We are very pleased that Judge Neff has signed off on the consent decree. Now we can begin the work of extending municipal water to residents in need.”

According to a previous Business Journal report, the consent decree includes several steps Wolverine is taking to ensure long-term water quality and continued environmental remediation in and around its hometown, including providing $69.5 million toward the extension of municipal water to more than 1,000 area properties, including all hookup and connection fees that homeowners typically pay on their own.

“We are pleased to reach a consent decree and move forward with our efforts on behalf of the community,” said Blake Krueger, chair and CEO, Wolverine, in a Feb. 4 statement. “We have said from the beginning we are committed to being part of comprehensive water quality solutions for our friends, families and neighbors, and this agreement provides the right framework for that to occur.”

Wolverine outlined a comprehensive action plan in December, building on its existing efforts in the area.

In addition to funding an extension of municipal water, the plan includes continued maintenance of the filters it has installed for certain homeowners and re-sampling certain residential wells for PFAS.

Under the consent decree, Wolverine also will continue environmental remediation efforts, including the cleanup and groundwater filtration system already underway at its former tannery site, a feasibility study at its House Street site, and investigations to further assess the presence of PFAS in groundwater.

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