BSI’s Expert Qualifications in Pricing and Markets
Boston Strategies International is the leading expert in pricing, costs, and profit margins in situations involving imperfect markets and price distortions, such as market dominance, monopoly pricing, sole supplier, and price manipulation.
David Jacoby, BSI’s President, has served as a consulting and testifying expert in high-profile depositions and trials, supported by our team of specialized analysts. He is a micro-economist who has developed and applied supply chain strategy and econometrics under conditions of imperfect, especially monopolistic or duopolistic, competition in energy markets. David Jacoby has been consulting for over 25 years in operations strategy and performance improvement, especially in the oil, gas, and power industries.
Jacoby studied highly concentrated supply markets and developed algorithms for procurement decisions in these circumstances. David Jacoby has combined data from the Herfindahl-Hirschman Index with a set of algorithms for negotiating in monopolistic pricing environments, he helped achieve savings on mega-projects (over $1b), which tend to occur more often in oil & gas, power, transport than in other industries. He described the role of game theory and the prisoners dilemma in his “Guide to Supply Chain Management” (The Economist, 2009), and conversely, how to use scale and value-based pricing in O&G to maximize supplier revenue, in his presentation to OFS Portal.
Jacoby quantified the economic impact of supply chain management for investment and public policy decisions.
- His book “The Guide to Supply Chain Management (The Economist, 2009)” calculated metrics and benchmarks of cost, revenue, and investment impacts of supply chain management. The book was published on various well known publishing platforms across the globe like 1, Barnes and Noble, Waterstone, 2, Goodreads, Allenandunwin.
- His work for the US Government (The Guide to Quantifying the Economic Impacts of Federal Investments in Large-Scale Freight Transportation Projects), his article “The Infrastructure Connection“, and his presentation to the Transportation Research Board: “The art of high-cost country sourcing“, quantified the second-order impact of investments on nodes in the value chain of various industries, which replaced one-dimensional and simple time savings methodologies for evaluating the cost and benefit of investments.
- His speech to the Salón Internacional de la Logística y de la Manutención (SIL) in Barcelona, Spain, and subsequent article on the subject (The Return of PPP: Mediterranean Governments Relying on the Private Sector for the Next Wave of Expansion), linked declining port traffic to the need for public-private infrastructure partnerships.
- His oil price bullwhip modeling (The Oil Price Bullwhip: Problem, Cost, Response) and optimal contract term modeling (Budgeting for Volatility, presented at the Demand Planning & Forecasting Best Practices Conference of the Institute of Business Forecasting) determined that public and private companies extend their long-term contracts to 10 years or more to avoid the inefficiencies of business cycles.
- His work for the City of New York (NYCHA) identified, disaggregated, and reassembled the total supply chain costs of maintaining subsidised housing complexes in a way that was more efficient than the federally mandated model.
- His work on agricultural sector loans for USAID and The World Bank used Domestic Resource Cost methodologies to decompose value chains and determine the impact of changes in subsidy and tariff decisions on the welfare of farmers.
He defined the relationship between the logistical concept of bullwhip (oscillation and amplitude magnification) to business cycles and contract negotiations.
- The final chapter of his Guide to Supply Chain Management (The Economist, 2009) points out that physical supply chain management principles should be applied to the timing of policy decisions such as interest rate adjustments and tax incentives, in order to dampen business cycles.
- His article “The Bullwhip Effect in Global Trade – This is One Wild Bull” prescribed long-term contracts as a way to mitigate a severe economic down cycle.
- He developed and applied a methodology for negotiating “should-cost” prices based on the interrelationships between profit margins, lead times, and prices, to anticipate impending excess capacity.
He linked supply chain principles to social and physical phenomena. For example, in his speech called “Facing the Global Challenge,” European Integration and Global Competitiveness,” he foresaw that business cycles would pressure some countries to disengage from the European Monetary Union’s “snake.” His work on intelligent transportation systems and RFID was based on eliminating traffic congestion caused by bullwhip. And he advocated stable, consistent politics to avoid overreaction and consequent cycles of political extremism.
He applied the supply chain benefit methodology to develop regional models of trade and development for emerging economies, based on national supply chain competitive advantage, which he presented in his presentation “Supply Chain as Geopolitical Weapon: Integrating Capabilities in Regional and Global Logistics” to the 4th Thai Ports & Shipping Conference in Bangkok and similar conferences in Shanghai, Cairo, and Ho Chi Minh City.
Influences (Quantitative and modeling foundations)
In imperfect competition and contracting risk, Jacoby was influenced by economists such as:
- Antoine-Augustin Cournot, who clarified how monopolistic and duopolistic pricing works (the price is not always at the maximum unit price that a vendor can get). Jacoby applied Cournot’s principles to managing prices from cartels in the glass and electric equipment supply industries.
- Joan Robinson, whose Economics of Imperfect Competition quantified firm behavior under conditions of imperfect competition, including price discrimination (including for monopolists) through differentiation and segmentation of customers, and pricing under monopoly of supply. Jacoby used Robinson’s theories to develop a technology-services-pricing model for retaining profit margin, which he published in “How Will Western Manufacturing Survive?”
- Joseph Schumpeter, whose theories on risk suggest that long-term contracts and capacity reservation (“pre-contracts”) reduce market risk and hence create different market behavior than short-term contracts. As mentioned above, Jacoby’s modeling also came to similar empirical conclusions.
In development economics, Jacoby was influenced by Friedrich List and contemporary development economists such as Jeffrey Sachs and Jeff Hammer, from The World Bank, with whom Jacoby worked on agricultural sector adjustment in Tunisia. List classified economies into five stages of development: barbaric, pastoral, agricultural; agricultural-manufacturing; agricultural- manufacturing-commercial, while Jacoby classified them into Mining / Raw Materials-Based, Industrial / Labor-Intensive, Knowledge / Capital Substitution, and Service / Technology-Based, in his presentation to the Nigerian Petroleum Technology Development Fund and other audiences.
In bullwhip theory, Jacoby was influenced by Jay Forrester, “the father of systems dynamics,” who taught at MIT.
Employees of Jacoby’s firm, Boston Strategies International, have gone on to attend graduate schools such as Yale, INSEAD, and Colombia, and took employment at other top-tier consulting and investment management firms such as McKinsey, PwC, and Morgan Stanley.
- Jacoby received his Bachelors of Science in Economics from the Wharton School of the University of Pennsylvania in 1985, where he majored in Finance and studied econometrics and computer science. In 1989 he also received his MBA from Wharton, along with a Masters of Arts in International Studies.
- Upon graduation he joined a consulting firm that later became Oliver Wyman, in its Maritime and International Trade group, planning shipping routes.
- In 1987 he obtained consulting roles for The World Bank and US Agency for International Development in Tunisia.
- In 1998, he founded the firm that would become Boston Strategies International, a consulting firm that applies value chain analysis to help policy makers take decisions regarding subsidies
- In 2005 and 2006 he taught operations management in the graduate business school at Boston University.
Awards and Certifications
David Jacoby is certified in:
Jacoby holds a number of accreditations, certifications, and appreciations from professional associations, including:
- Certified Energy Procurement Professional (CEP) (AEE)
- Certified Fellow in Production and Inventory Management (CFPIM) (APICS)
- Certified in Supply Chain Management (CSCP) (APICS)
- Certified in Integrated Resource Management (CIRM) (APICS)
- Certified in Purchasing Management (Lifetime C.P.M.) (ISM)
- Certified in Transportation and Logistics (CTL) (AST&L)
- Ptak Prize Selection Committee judge, International Supply Chain Education Alliance (ISCEA)
- Boston APICS Member of the Year
- Member of the Society of Petroleum Engineers (SPE)
The Economist Guide to Supply Chain Management
- Defines a framework for formulating a supply chain strategy—it ensures focused supply chain efforts that contribute significantly to the corporate strategy and goals, rather than what can end up being a multitude of diffuse operational initiatives.
- Provides reference tables of performance metrics that support each strategy—focuses efforts on key metrics that help achieve strategic goals rather than relying on a plethora of lower-level metrics that are often used but rarely affect the company’s competitive positioning.
- Provides industry-specific performance targets for each strategy—allows practitioners to gauge whether their company’s supply chain is actively improving corporate competitive advantage.
This guide distills the essential supply chain concepts into a convenient reference that helps executives achieve rapid results. It seeks to clarify the myriad ambiguities and inconsistencies surrounding the concept of supply chain management (SCM) and its relationship to the functions from which it stems. It is designed to avoid bias towards the viewpoint of logistics, manufacturing or any other related function, to highlight the most important concepts that are essential to getting shareholder value from SCM, and to focus on the most effective methods for achieving significant financial results.
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Optimal Supply Chain Management
It provides a toolbox for large-scale capital expenditure decision making and for transforming capital and operation expenditures to exert a visible financial impact in oil, gas, and power companies. It’s supply chain risk management decision analysis tools can help operators increase economic value added while enhancing safety and stewardship of the environment.
This book is an invaluable reference resource for chief operating officers; chief financial officers; engineers; vice presidents of supply chain, operations, or production; and directors and managers of procurement, purchasing, operations, or materials management.
Features and benefits:
- Cut through generic supply chain concepts and principles to those that have a unique and substantial financial impact on oil, gas, and power operations.
- Jump to chapters that apply directly to your business — upstream, midstream, downstream, or power generation.
- Benchmark your company’s operations against peers that have achieved world-class supply chain performance, and emulate their successes.
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INTERVIEWS AND PRESENTATIONS
- Major Accident Prevention and Lessons Learned in Oil & Gas: Four Guidelines and Thirteen Best Practices for Governing Safe Supply Chains, Abu Dhabi International Petroleum Exhibition and Conference (ADIPEC).: https://www.onepetro.org/conference-paper/SPE-161035-MS
- SCMR Exclusive Interview with David Jacoby on the State of the Ocean Cargo Market: http://bostonstrategies.com/images/BSI_Ocean_Outlook_Interview_in_SCMR_120806.pdf
- Ocean Cargo Market Update: Can we still be friends? http://www.logisticsmgmt.com/article/ocean_cargo_market_update_can_we_still_be_friends
- GE Oil and Gas: “Road to renewables: Bridging from thermal power to renewable power supply chains” http://site.ge-energy.com/businesses/ge_oilandgas/en/newsletter/geog_viewsandnews_062512/changeforum.html
- Energy Tribune : “Cause for Concern Over the Tumaco Pipeline” http://www.energytribune.com/32090/cause-for-concern-over-the-tumaco-pipeline#sthash.9lhGQ7S5.dpbs
- Logistics Digest: “Registering and Transporting Hazardous Substances” http://www.logisticsdigest.com/inter-article/inter-opinion/item/5877-registering-and-transporting-hazardous-substances.html
- Logistics Digest: “Planning Your Carbon Footprint” http://www.logisticsdigest.com/inter-article/inter-opinion/item/5668-planning-your-carbon-footprint.html
- Machinery Lubrication: “Chevron, Shell, Baker Hughes Win BSI Supply Chain Awards” http://www.machinerylubrication.com/Read/26702/Chevron-Shell-BSI-awards
- Parcel: “10 Tips for Selecting a Carrier or 3PL” http://parcelindustry.com/article-1855-10-tips-for-selecting-a-carrier-or-3pl.html
- Logistics Digest: “The Return of PPP” http://logisticsdigest.com/inter-article/inter-opinion/item/4627-the-return-of-ppp.html
- Supply Chain Quarterly: “Infrastructure investment: The supply chain connection” http://www.supplychainquarterly.com/topics/Logistics/scq200804infrastructure/
- E-Drive: “The Outlook for Motors and Drives in 2010: Strategies for Success” http://www.servicewire.com/downloads/e-driveonlinevfd.pdf
- Logistics Digest: “Planning for the Long Haul” http://www.logisticsdigest.com/inter-article/inter-opinion/item/4664-planning-for-the-long-haul.html
- Oil and Gas Journal: “The oil price ‘bullwhip’: problem, cost, response” http://www.ogj.com/articles/print/volume-108/issue-11/General-Interest/the-oil-price-bullwhip-problem-cost-response.html
- Energy Tribune: “Oil Price Volatility and How to Avoid It” http://oilprice.com/Energy/Oil-Prices/How-To-Avoid-Oil-Price-Volatility.html
- Logistics Digest: “Recognizing Excellence: BSI Supply Chain Award Winners” http://www.logisticsdigest.com/component/content/article/24-supply-chian-management/3569-recognizing-excellence-bsi-supply-chain-award-winners.html
- Logistics Digest: “Using Flexible Capacity Techniques to Thrive in a Volatile Economy” http://www.logisticsdigest.com/article/opinion/item/3525-using-flexible-capacity-techniques-to-thrive-in-a-volatile-economy.html
- Logistics Digest: “W-Shaped Economy or Long Wave?” http://www.logisticsdigest.com/article/opinion/item/3389-%E2%80%9Cw-shaped-recovery%E2%80%9D-or-%E2%80%9Clong-wave%E2%80%9D.html
- Logistics Digest: “Contracting in Volatile Markets” http://www.logisticsdigest.com/component/content/article/159-november-2009/3072-contracting-in-volatile-markets.html
- Logistics Digest: “Your supply chain costs have decreased by 12.2%” http://www.logisticsdigest.com/component/content/article/144-september-2009/2852-your-supply-chain-costs-have-decreased-by-122.html
- ISM Materials Management News: “SUPPLY CHAIN ECONOMICS Energy Outlook” http://www.ismmmg.org/june09mmg.pdf
- Logistics Management: “Boston Strategies International shares “peak season” forecast” http://www.logisticsmgmt.com/article/boston_strategies_international_shares_peak_season_forecast/ports_and_infrastructure
- Parcel: “Perfecting Your Supply Chain” http://parcelindustry.com/article-909-Perfecting-Your-Supply-Chain.html
- Parcel: “Going Global” http://parcelindustry.com/article-827-Going-Global.html
- Parcel: “How Long Will The East-West Trade Imbalance Last?” http://parcelindustry.com/article-971-how-long-will-the-east-west-trade-imbalance-last-.html
- TRID: “The art of high-cost country sourcing” https://trid.trb.org/view.aspx?id=867120
- “The Shanghai connection” https://www.highbeam.com/doc/1G1-177267543.html
- ↑ “Amazon.com: David Jacoby: Books, Biography, Blog, Audiobooks, Kindle”. www.amazon.com. Retrieved 2016-08-16.
- ↑ “David Jacoby”. Profile Books. Retrieved 2016-08-16.
- ↑ “Judges”. Retrieved 2016-08-16.
- ↑ “2008 New England Supply Chain Conference and Exhibit – David Jacoby Bio”. www.nescon.org. Retrieved 2016-08-16.
- ↑ Jacoby, David (2010-09-17). The Economist Guide To Supply Chain Management. Profile Books. ISBN 1847652204.
- ↑ “David Jacoby. Guide to Supply Chain Management: How Getting It Right Boosts Corporate Performance (the Economist)”. Transportation Journal. 2013-09-22.
- ↑ Jacoby, David (2009-09-09). Guide to Supply Chain Management: How Getting it Right Boosts Corporate Performance (1st edition ed.). Bloomberg Press. ISBN 9781576603451. CS1 maint: Extra text (link)
- ↑ Noble, Barnes &. “Guide to Supply Chain Management: How Getting It Right Boosts Corporate Performance / Edition 1”. Barnes & Noble. Retrieved 2016-08-16.
- ↑ “The Economist Guide to Supply Chain Management by David Jacoby, Professor David Jacoby | Waterstones”. www.waterstones.com. Retrieved 2016-08-16.
- ↑ “Guide to Supply Chain Management eBook by David Jacoby”. Kobo. Retrieved 2016-08-16.
- ↑ “Guide to Supply Chain Management”. Goodreads. Retrieved 2016-08-16.
- ↑ “The Economist Guide To Supply Chain Management – David Jacoby – 9781846681745 – Allen & Unwin – Australia”. allenandunwin.com. Retrieved 2016-08-16.
- ↑ “Guide to Quantifying the Economic Impact of Federal Investments in Large-Scale Freight Transportation Projects | Freight | Library”. www.edrgroup.com. Retrieved 2016-08-16.
- ↑ “Infrastructure investment: The supply chain connection – Logistics – CSCMP’s Supply Chain Quarterly”. www.supplychainquarterly.com. Retrieved 2016-08-16.
- ↑ Jacoby, David; Figueiredo, Bruna (2008-05-01). “The art of high-cost country sourcing”. Supply Chain Management Review. 12 (5). ISSN 1521-9747.
- ↑ “The Oil Price Bullwhip Problem Cost Response”. www.ogj.com. Retrieved 2016-08-16.
- ↑ Jacoby, David (2008-01-01). Tarantino, Anthony, ed. Shippers Compliance in Freight Transportation and Logistics. John Wiley & Sons, Inc. pp. 457–473. doi:10.1002/9781118269213.ch34/summary. ISBN 9781118269213.
- ↑ Jacoby, David (2008-01-01). Tarantino, Anthony, ed. Carriers Compliance in Freight Transportation and Logistics. John Wiley & Sons, Inc. pp. 537–549. doi:10.1002/9781118269213.ch40/summary. ISBN 9781118269213.