It’s the 50th issue of The Supply Times!

(Apologies if you’ve received this issue twice, folks! We had some mailing issues the first time around).

Holy smokes, that went quickly! Whether you’re a new reader or have been with TST since the beginning, let me take this opportunity to thank you for joining me on this highly enjoyable journey. Here’s to the next 50 issues!

While we’re celebrating, now’s a good time to announce a new TST section - starting in issue #0051 - that will feature extracts from my upcoming book! Can’t wait? Me neither 😀 

OK, let’s get moving on issue 5-0. Here’s a quote that stopped me dead in my tracks last week:

“I want to leave you with this. We aren’t asking or negotiating with you at this point. We’re informing you how we need to work together, going forward.”

These were the words of Internet Brands CEO, Bob Brisco, in a widely mocked video that went viral in mid-January. Brisco was laying down the law to office-shy employees in a show of force that reflects the new market dynamics - that is; if you don’t want to come into the office, we can - and will - replace you.

It’s yet another salvo in the remote-working wars and comes mere months after the business world seemed in agreement that remote working was the way of the future. Knowledge workers who had accepted jobs with the understanding that they would be predominantly remote now feel betrayed. 

And that’s not the only form of betrayal that’s currently playing out across corporate America. If HR suddenly drops an unexpected 15-minute meeting in your calendar, be very concerned. It could be a sign that your organization is “correcting” the over-hiring boom by slashing its headcount. More on the Great Betrayal below. 

But first … Wegovy! Novo Nordisk’s weight-loss drug has been so insanely successful that it has destabilized Denmark’s economy, forcing the central Danish bank to act. Savvy supply-focused readers will already know what comes next when a product becomes this popular: demand inevitably outpaces supply. Below, I explore the moves Novo and its parent company have taken to get those Wegovy syringes filled and out the factory door. 

I’m also featuring the usual injection of AI Insights and recommendations for podcasts, books, shows, charts, and tweets of the week, followed by a final chuckle. 

Let’s plunge in. 

Industry Highlights: Novo Nordisk Surpasses $500 Billion

It’s always incredible to watch when a product becomes so wildly popular that demand far exceeds supply. We saw it with the PlayStation 5, the Tesla Model 3, COVID-19 vaccines, and now, with a weight-loss wonder drug.

Danish pharma giant Novo Nordisk has been in the news again this week with its whopping $16.5 billion acquisition of key pharmaceutical manufacturer, Catalent. 

This strategic move comes in response to the overwhelming demand for their weight-loss drug, Wegovy, which has propelled Novo Nordisk to become Europe's second-ever company to surpass a market value of $500 billion (the first was Louis Vuitton owner, LVMH). With this acquisition, Novo aims to expand its manufacturing capacity and effectively meet the surging demand for its flagship product.

Novo’s success story has been largely driven by the tremendous popularity of Wegovy and its sister medication for diabetes, Ozempic. Last year, Novo Nordisk experienced a remarkable 154% increase in obesity drug sales. So much foreign cash has poured into Novo Nordisk’s home country that it threatened to destabilize the Danish economy. 

Predictably, runaway success at this level brings challenges. The rocketing demand for Wegovy presented significant supply headaches for Novo. We’ve already seen limitations on distributing Wegovy starter doses in the US. Now, parent company Novo Holdings has acquired NJ pharma firm, Catalent, for $16.5 billion. As part of the deal, Novo Holdings will sell three of Catalent's sites in the United States and Europe to Novo Nordisk for $11 billion, boosting its manufacturing muscle. 

Catalent was already Novo’s main supplier of fill-finish work, which means filling/packaging Wegovy syringes in sterile conditions. But not that sterile, apparently: Reuters reports that the FDA found quality control lapses at Catalent’s Bloomington factory, including the discovery of a “pest” on the manufacturing line along with some mysterious “brown residue.” Gross. 

Pests aside, Novo Nordisk's recent earnings report has further fueled optimism. The company projects revenue growth of up to 26% and operating profit growth of up to 29% at constant exchange rates for the current year. Bloomberg analyst Michael Shah reckons the company's projections appear conservative, especially if Novo manages to capture the obesity market in China.

Wegovy certainly isn’t the only weight-loss drug on the market. The key emerging competitor is Eli Lilly & Co., which commercialized Zepbound (tirzepatide) last year. Increased competition will impact pricing strategies - at present, the list price of Wegovy is $1,349 per month. Bloomberg Intelligence believes Zepbound (colored gray below) has the potential to overtake Wegovy as early as 2027.

Novo Nordisk remains confident about the volume opportunity in the US market. The company expects that as more insurers cover Wegovy, the drug's net price after discounts will decrease over time. Novo Nordisk is actively seeking regulatory approval for a label change to expand the eligible patient population. Positive results from a large study demonstrating the drug's potential to reduce the risk of strokes and heart attacks in overweight individuals with existing heart disease may facilitate broader coverage by payers. 

Meanwhile, no one seems overly worried about Wegovy’s long list of possible side effects, including thyroid tumors and kidney failure. 

The Future of Work: The Great Betrayal

A shout-out to my friend Eryn Peters for this topic inspiration - check out her excellent newsletter here. 

Is anyone else sick of all the trendy labels journalists give workplace trends? We’ve endured the Great Resignation, a Great Reshuffle, Quiet Quitting, and the “Great Attraction.” 

Then came multiple rounds of Loud Layoffs in Tech and other industries, which started in November 2022, peaked at 90,000 layoffs in January 2023, and are reportedly continuing into 2024. Joe Lazer dubbed it “The Great Betrayal”, writing: 

“I called it The Great Betrayal, capturing a word — betrayal — that laid-off employees used repeatedly to describe how they felt after being unceremoniously cast aside. Some workers woke up after a decade of service to discover their accounts had been deactivated.”

A viral video of CloudFlare employee Brittany Pietsch helps put a human face to the Great Betrayal and is definitely worth a watch. 

Pietsch demands to see the data behind the company’s decision to let her go, questions why two HR people she has never met are firing her, and then delivers this haymaker:

“I need an explanation as to why [I] am getting let go - not why CloudFlare decided to hire too many people and are now realizing they can’t afford it. If that’s the real answer, I’d rather you just tell me that instead of making up some bullsh*t. … To be let go for no reason is a huge slap in the face from a company that I really wanted to believe in.”

What sort of impact does a betrayal like this have on knowledge workers? Are they simply going to sign up with another employer with the usual promises of loyalty and fidelity on both sides of the table, or has something changed? 

A new survey by a.team revealed what’s really going on: “With layoffs and the rise of AI, knowledge workers are done with traditional full-time work.”

Here are the headlines: 

As a.team writes, “the illusion of stability in full-time employment has been broken.” Yet if you were a fly on the wall at the average job interview, you will no doubt hear the usual false promises where the employer assures the candidate they are being offered a perpetual home in the organization, while the candidate responds with similar promises of loyalty. 

Perhaps we should focus instead on the EVP promises employers can keep, such as a great work-life balance made possible by the rise of remote working… 

… which brings us to the second part of the Great Betrayal. Employers everywhere are walking back on their promise of embracing remote employment and are now demanding workers return to the office - or else.

Then there is the awful video from Internet Brands (parent company of WebMD). It’s too terrible to miss but be prepared to cringe your way through the full two minutes. Jaunty music and dancing employees aside, the message is clear: if you don’t return to the office, you won’t have a job. The execs in the video list the usual reasons for this demand: faster and better ideas, better collaboration, team cohesion, etc. If you’re looking for the counter-arguments, check out the top responses in the comments section:

“Yikes. Somebody at WebMD signed a long term office lease 5 minutes before the pandemic started and needs to justify that expense.” 

“Nothing says collaboration and working together like threatening your subordinates to relocate their place of work, or else risk termination.”

“It's hard to be innovative, create new products, or be productive when half your workforce quits.” 

Forbes reported at the end of January that 99% of companies with a return-to-office mandate saw a drop in employee satisfaction. But with the market increasingly flush with talent, employers seem willing to risk a mass resignation (like Grindr) because they can simply re-hire; and this time, they won’t make any promises of fully remote work. 

It’s important to note that most companies with return-to-office mandates (UPS is an exception) do not require a return to a full, five-day week in the office, but they are no longer allowing fully remote work either. The hybrid compromise tends to involve three days a week in-office. If this becomes the norm, there’s an opportunity for employers who have embraced fully remote to snap up top talent by differentiating themselves from the pack.

AI Insights

• Hackers steal $25 million with deepfake CEO: A finance department employee of a multinational company based in Hong Kong was fooled into making a secret transaction after attending a group video call featuring a deepfake version of the company’s CFO and other staff, who looked and sounded like the real thing. 

• Meta deploys in-house chips to reduce dependency on Nvidia: I reported last issue that Sam Altman is moving to decrease OpenAI’s reliance on Nvidia chips, and now it appears that Zuckerburg is following suit. Meta plans to deploy an in-house, custom chip in its data centers, potentially saving hundreds of millions of dollars in energy costs and billions in chip purchasing costs. 

• AI hiring tools may be based on worthless pseudoscience:This article calls for more skepticism and regulation in the use of AI hiring tools. The tools aren’t going away, so it’s up to candidates to push back and for software buyers to ask the right questions. Mandating that vendors release technical reports about how they build and validate their tools would be a good first step.

The Supply Aside

📕 Read - The Five Dysfunctions of a Team: A Leadership Fable

Originally published in 2002, The Five Dysfunctions of a Team by Patrick Lencioni breaks the mold of typical management books. I read this book early in my career and it made such an impression on me that I’ve read all of Lencioni’s subsequent works. The author takes a creative approach by sharing his insights through a fictional story where the protagonist, Kathryn Petersen, strives to cultivate a thriving atmosphere within the fictional company DecisionTech. As the story progresses, she enlightens her executives about the Five Dysfunctions of a Team Model, attributing these dysfunctions as the root causes of the team's failures. 

What are the dysfunctions? An absence of trust, a fear of conflict, a lack of commitment, an avoidance of accountability, and an inattention to results.

What Else I’m Reading

• Carmakers may be using aluminum made with forced labor: NGO Human Rights Watch says Toyota, Volkswagen, Tesla, GM, and BYD could do more to ensure their standards are applied in China as evidence emerges of aluminum made by Uyghur forced labor. 

• Study finds that back to office mandates do not make companies more money: New research reveals that return-to-office mandates don’t boost a company’s financial performance, but have proven negative side effects for its workforce.

• Alarm at viral videos of drivers using VR headsets: Several videos have emerged of people wearing Apple Vision Pro headsets while driving Teslas, prompting US transportation secretary Pete Buttigieg to remind his followers on X that there is not yet such a thing as a fully autonomous car.

📺 Watch - Masters of the Air (Apple TV)

It takes a show like Masters of the Air to put the appalling statistics of WWII into perspective. By the end of the conflict, the US had suffered 52,173 aircrew combat losses as crews faced everything from enemy fighters, flak, lack of oxygen, frostbite, and low pressures at high altitudes. Incredibly, another 25,844 died in accidents caused by hurried aircraft design and production, and pilots being sent aloft with the absolute minimum of training. Group Commander Col. Donald Blakeslee once said, “You can learn to fly on the way to the target.”

Masters of the Air is visually stunning, with a star-studded cast, and a blockbuster symphonic score to match the drama. Vanity Fair writes “What’s made plain by the show is the boggling miracle that anyone survived—as much a testament to crazy luck as anything else … Anyone making it out of one of these raids alive seems like mere cosmic accident rather than mastery of anything.”

👂 Listen - My First Million: Tony Robbins Changes My Life

In this episode of My First Million, Shaan Puri talks to Tony Robbins, arguably the world’s most popular life and performance coach. Tony has built a $7 billion dollar empire and is known for his books Unlimited Power and Awaken the Giant Within. In this conversation he shares what makes a championship mindset, what it’s like owning a sports team,  and what he’s learned from working with the best of the best. 

💡 Think - Elections Galore 

With 2024 being the year of global elections, the first one to catch my attention is currently underway in Pakistan. Having lived there for several years as a teenager, I find it funny how some of the same names from the mid-90s are on the ballot. 

This election cycle did not lack political drama. Imprisoning a former and hugely popular Prime Minister (Imran Khan) and disqualifying him from the race will cast a pall (you can bet Team Trump is paying attention!). Meanwhile, another former Prime Minister, Nawaz Sharif, is eyeing a comeback, underlining the military's behind-the-scenes power plays that have long steered Pakistan's political narrative. 

This election isn't just a local affair; it's on the global radar, given Pakistan's strategic geopolitical stance. Amidst this, the youth's unprecedented engagement offers a glimmer of hope, signaling a yearning for change. But with the military's enduring grip and looming economic challenges, Pakistan stands at a crossroads, making this election a crucial watchpoint for both its democracy and its role on the world stage.

Charts of the Week

Quote of the Week

Tweet of the Week

The Final Chuckle

Thanks so much for reading. I’d love to know what you think about this issue and how I can make it more useful to you. If you have suggestions or topics you want to see me address, email me at [email protected]!

Want more?

If you’d like to read more of my writing on the supply chain, entrepreneurship, or the future of work, check out my website. For timely updates, follow me on LinkedIn and Twitter!

Happy reading this weekend!

-- Naseem