And The US Government is Letting the Patent Pirates Plunder Away …

With the exception of Nova Scotian Pirates, Sourcing Innovation is quite negative where pirates are concerned. But not all pirates are created equal – some are much more pernicious than others. And the most pernicious of all the pirates are the Patent Pirates who should be made to walk the plank as soon as possible.

But thanks to the slow movement of the Senate Judiciary Committee, which broke for April Recess before finishing what would have been a historic deal to curb the scurrilous practices of patent trolls, as per this recent VentureBeat article on how Waiting for Patent Reform is Costing Us Billions, they are taking bigger hauls than ever. If the pirates of old had known how profitable it would be to plunder patents, they would have used their black magic to put themselves into a Rumplestiltskin sleep for 300 years so that they could wake up to the richest haul in history. (Even the haul of the richest Columbian drug lords pale in comparison to the haul of the patent pirates.)

To put the problem into perspective, the U.S. Economy loses approximately $1.1 Billion to the patent pirates for every two week delay! Imagine what it could do with $1.1 Billion. Not only do we need a “loser pays” bill for patent lawsuits, but we need a bill that prevents patent trolling in the first place! Patent plundering kills innovation – not something the US economy can afford right now.

One Week … to Uncovering Savings You Never Knew Existed!


It’ll be one week ’till you’ll look at me
Cock your head to the side and say “I’m listening”
Five days and you’ll look for me saying
“Get that together come here and teach me”
Three days and the lecture room
You’ll realize you’re too early, but yet not too soon
Next day I’ll have swayed you
but it’ll still be two days till you say I’m spot on!

That’s right, one week until the doctor gives the keynote at Vinimaya’s User Group Workshop on The New Archaeology of Spend Management: Uncovering Savings That You Never Knew Existed. So, if you’re part of the Vinimaya community, you might want to answer that invite.

Cost Savings – It IS The Whole Package!

As per yesterday’s post and a recent article on Inbound Logistics, when Finding Cost Savings: It’s the Whole Package! Sometimes the only way you can save money is to first spend money.

The article, which says this is counter-intuitive (although it really isn’t), gives the example of an electronics manufacturing company that had a relatively low 2% damage rate, but needed to reduce shipping damage even further due to the high value of it’s products. They decided to work with their pallet provider to reduce the strength of, and add strength to, their pallets and boxes. The new packaging cost more to produce, but the smaller footprint reduced their LTL shipping costs and their reduced damage rate of a mere 0.1%, which was 20 times better than their previous damage rate, saved them considerably more than what they spent on improved packaging.

This goes back to yesterday’s post where true, sustainable, savings only come from the perfect order. If anything screws up, any cost savings you identified earlier in the process are more than negated by any screw-up that comes later. But even getting the order perfect from the supplier isn’t enough if you’re buying products for resale and then they get damaged when you ship the product from your facility to the customer’s location. The perfect order isn’t just from the supplier to you, it’s from the supplier to the end customer. The perfect order crosses the entire supply chain from the initial obtainment of the raw materials for the product three tiers down until the final product arrives in the hand of the end customer.

The other issue, as pointed out by the article, is sustainability. Your brand reputation might depend upon your commitment to sustainability and Corporate Social Responsibility – ignoring it to cut a few cost corners could result in a consumer backlash that will take significantly more off of your bottom line than the few pennies you save buying non-fair trade coffee or conflict diamonds.

Moreover, true sustainability always delivers cost reductions, especially where the consumption of natural resources is concerned. While there will be an upfront cost to install new technologies that reduce water and energy consumption, or to build new solar arrays and wind turbines to produce more sustainable power, which will be stored in a battery array for dark and calm times, this is a one-time up-front cost. Ongoing costs will be significantly reduce as the sun and the wind is free – unlike coal and oil which gets more expensive by the year. As the article says “any wasted money is wasted over and over again” and even if it takes three to five years to recover the investment made to prevent money being wasted, a company in it for the long haul will make it up four times over in the following twenty years.

So always look at the big picture – then true cost savings opportunities will emerge!

Now That You’ve Taken Responsibility, Get Sustainable Results

In our recent (re)post last week, we told you that if you do not get sustainable results, blame yourself. By now, you’ve owned up to your shortcomings and are ready to do something about it. Today we are going to overview steps you can take to make sure you maximize the chance of a perfect order, which, by definition, is acquired at just the right cost (which means there are no savings to be had).

As per this post, for savings to materialize, the following necessary (but not sufficient) conditions have to be met:

  • the order has to be placed with the contracted supplier
  • with sufficient lead time
  • and then shipped by the supplier on-time
  • using the approved carrier and shipping arrangement
  • with the required third party and government fees promptly paid
  • and paperwork promptly filed
  • so there are no delays and the product arrives at the warehouse on time
  • where it is properly received, inventoried, and shelved
  • and then the invoice is verified against the good received and the PO
  • and paid at the right time when everything is okay.

This is a tall task, taller than accepting the tall tale of Jonah and the whale, but not an impossible one, and no miracles are required to make it so. Just the acquisition of the right technology, implemented in the right framework, supporting the right processes, and tailored to support your organizational talent. It will take some terrific transition management to get the right organizational alignment, but such alignment is possible (and we’ll be discussing this in more detail next quarter), and the leaders will get there over the next seven to ten years.

So where do you start? Acquire the core technologies you need to streamline your supply management practices.

  • an e-Procurement solution that only allows orders for products on contracts from approved suppliers
  • a demand planning solution (which may be part of a next-generation ERP solution) that integrates with your e-Procurement solution and notifies you when order deadlines are approaching and automatically submits auto-fill orders
  • a 3PL solution that tracks shipments in real-time
  • a Trade Management solution that automatically generates the required paperwork, computes the required fees, and manages, tracks, and confirms their submission
  • an Inventory and Warehouse Management System that integrates with the e-Procurement Solution that manages receipt, shelving, and distribution
  • an e-Procurement solution that also does invoice management and m-way matching
  • an e-Payment solution that integrates with the e-Procurement solution and includes Supply Chain Finance Capabilities (including dynamic discounting, supplier financing, and pre-shipment finance, for example) to help the company determine the best payment time

It’s just the beginnings, but it’s a good start.