Larry Solow: Just a couple of follow-ups, Vivek, maybe just on Smiths. The quality control issues, putting those aside because some of those I realize are somewhat out of your control and hard to probably guesstimate in terms of time. But just in terms of service, order fulfillment and all that other stuff that obviously had some issues and you’ve been sort of chasing the ball for several quarters now. Where do you — I’m certainly seeing a lot of improvement in the last couple of quarters. Where do you think you stand there? Like are you — if we use a baseball analogy, are we in the middle of the inning. So where are we there before you, just on fulfillment and stuff that I feel like is probably in your control, it just may take a little longer than you originally thought.
Vivek Jain: I think we’re — and I know what team you like, I think we are halfway, I think we’re halfway there. So middle innings because it is running better. You don’t hear us talking about the physical logistics very much. Inventory is up $200 million. That means we’re unable to produce. Now it’s a different issue, how do we get the inventory down to the right level. But the other judgment is, is it all running at the right cost. So we sort of invested like crazy to buffer the supply chain and to overserve the customer to not lose more market share. That’s the truth of what happened last year. But we did that at any expense and that’s what pressured the P&L so much in a broad-based inflationary environment. So part of that doesn’t go away, right?
There’s labor embedded in logistics costs. There’s labor embedded in production costs. But the things that are addressable, we need to get those back before we say it’s running, right. It’s not just the service levels, are we running ourselves efficiently. Our operating margin sticks, right, relative to the categories we purchased.
Larry Solow: So there is extra dollars that eventually will — you probably can’t quantify today but forgetting the freight and all the other — the impediments to your earnings. But just there are excess expense — like you said, you’re spending at all costs. It sounds like not only a capital operating .
Vivek Jain: I mean that’s why we wait — we try to go through all that minutia in the script there because that’s exactly the point we were trying to…
Larry Solow: And is that — in that big range of earnings, you basically said it to our guidance a little bit, like you said, wider than normal. Is that just — is that strictly — I mean it sounds like you said basically Smiths, right about that?
Vivek Jain: It is basically Smiths’ results and then inflation on the solutions portion of legacy ICU to get that back under control. We don’t want to go through what we went through last year, Larry, right? And the world has not settled yet. A lot of these currencies still move in international, they are still moving. We don’t want to do that.
Larry Solow: Okay. I know on price, for competitive reasons, you can’t talk too much about it. But — and it sounds like you said, your business, there’s a disproportionate business that’s being impacted the most. And like you said, you’re not even solutions business, you said a couple of times on today’s call, essentially not even profitable, right which is not sustainable, right? So I’m curious like — I don’t know what you could say to that but you mentioned you’re the third or fourth largest provider. Are the other guys — or is there anything movement from the other — everyone else just sitting there and waiting? I feel like even across all these other health care industries, contracts are being renegotiated? Or in its case, it just seems dramatic, like that you can’t get in there for another 1.5 years. But is there any movement…
