Data processing: financial – business practice – management – or co – Automated electrical financial or business practice or... – Finance
Reexamination Certificate
1999-08-26
2002-05-28
Nguyen, Cuong H. (Department: 2165)
Data processing: financial, business practice, management, or co
Automated electrical financial or business practice or...
Finance
C705S035000
Reexamination Certificate
active
06397197
ABSTRACT:
FIELD OF THE INVENTION
The present invention generally relates to an apparatus and method for creating a database representing print and other information product vendor pools for one or more subscribing buyers, and for selecting the lowest bidder from the database's represented vendor pool on a per-job basis and, more particularly, for creating and maintaining a database representing a vendor pool for each subscribing buyer of printing and other customized print information product goods and services, the database further representing capabilities of said vendors, receiving invitations-for-bid from buyers, extracting vendor qualification criteria data from said invitations-for-bid, transmitting invitations to bid on said invitations-for-bid to qualified ones of said vendors, based on said vendor qualification criteria data, and selecting from among the responding vendors based on the response price and other factors.
BACKGROUND OF THE INVENTION
Purchase of print and other customized information product goods and services, such as business cards and forms, envelopes, other packaging, labels, pamphlets, CD ROMS, notepads, transparencies, brochures, and bound books differs from non-custom manufactured goods or services in that print and other information product goods and services are generally not pre-stocked as “off-the-shelf” items but, instead, must be specifically manufactured or provided to meet the buyer's particular requirements. Consequently, print and other information product goods and services frequently cannot be purchased “off-the-shelf” at fixed prices appearing on standard price lists. Instead, most print and other information product goods and services are customized to some extent and, accordingly, their prices are established when the specific goods or services are themselves identified, either by an actual order, invitation-for-bid (“IFB”), request-for-quote (“RFQ”), or request-for-proposal (“RFP”); only then can the manufacturer or service provider assess the precise quality and manufacturing or service specifications required to perform the job.
The general procedure used in the prior art of procurement of print and other customized information product goods and services is that the buyer provides the actual order, or the IFB, RFQ, or RFP to one or more printers with whom, in general, the buyer has had sufficient previous experience to know what type of product or level of service can be provided. For purposes of this description, the terms “printer” and “print vendor” are interchangeable and are defined as an entity which manufactures or sells traditional forms of printing or other non-traditional types of information product goods or services, which are or which consist of any tangible medium for communicating or displaying text, images, or other graphical or pictorial information, including, but not limited to, business forms, labels, pamphlets, books, flyers, brochures, transparencies, CD ROMs, stickers, business cards, envelopes, other packaging, and note pads. For purposes of this description the terms “print information product” and “print information goods” are interchangeable and defined to include all of the above-identified goods and services. The printer then reviews the buyer's product manufacturing and delivery specifications or requirements contained in the order, IFB, RFQ, or RFP including physical specifications, characteristics of style, quantities, mode of shipment, delivery schedule, and quality level required to perform individual jobs or estimated job requirements over a given period of time and, based on or extrapolating from previous experiences, provides an estimated price or bid to the buyer. Generally the buyer will provide the order, invitation-for-bid, request-for-quote, or request-for-proposal to a single or very limited number of print vendors, and award the contract co the single or lowest bidder.
In following this general procedure in the prior art, however, buyers of printing and other customized information product goods or services confront the so-called “iron triangle” of quality, timeliness, and cost. Buyers want a product or service that is good, fast, and cheap, but what they discover is that traditional procurements methods will, at best, only achieve two of these three ideals on any given job. Thus, a buyer might demand and receive top quality on a “rush” order, but only at a high cost. Conversely, negotiating a lower price may achieve cost savings, but also compromise quality and timeliness.
This problem is heightened by great elasticity in the so-called “market” price of printing or other customized information product goods or services, which can vary widely from vendor to vendor and from week to week. This elasticity results from the fact that pricing of such customized goods or services greatly depends on (1) the level of service and quality desired, (2) the labor and equipment required to produce the job or provide the service; (3) the amount of time involved in producing the job or providing the service; (4) whether the job or service can be engineered or designed in a cost-effective way; and (5) whether the customer order can be included in the print vendor's production schedule to comply with the required delivery date.
This last factor is particularly crucial. Most print vendors are “hard-iron” manufacturers with high overhead and labor costs. As a result, idle equipment and labor can be devastating to a print vendor's profit margin. At the same time, print vendors must be ready to service their regular customers on short notice, which means planning for downtime in the production schedule to ensure that their machinery is available for “rush” orders. Managing customer job orders in a way that minimizes these “holes” in the production schedule is frequently what distinguishes the profitable print vendor from the insolvent one.
As a result of this tension between the cost of idle equipment and labor and the need to preserve downtime for regular customers, print vendors are constantly seeking short-turnaround jobs to fill their production “holes” when their regular orders do not materialize. To obtain these short-turnaround jobs, many print vendors will resort to extremely low pricing, provided that they can do so without undermining their regular customer relations. This pricing strategy is called “contribution pricing”. “Contribution” pricing is the practice of bidding out work at below normal profit margins because any income above out-of-pocket costs “contributes”, 100%, to the print vendor's bottom line in comparison to the cost of letting its labor and machinery remain idle. In current printing markets, “contribution” pricing on a regular basis is found only in federal and state government procurements of print information products.
In both public and private sector print information product markets, however, traditional procurement methods and prior art devices have failed to solve this “iron triangle” because of their inability to take advantage of “contribution” pricing without incurring prohibitive administrative costs or sacrificing quality or timeliness. There are many reasons for this failure. First, the purchase or procurement of printing and other customized information product goods and services frequently requires specialized knowledge and expertise in finding the right print vendor for each job. Most businesses, however, hire purchasing officials with general procurement knowledge who are then given responsibility for a wide range of purchases. As a result, the purchasing official is forced to rely on the print vendor's expertise in designing or engineering a print job, which too often results in the most expensive (and most profitable for the print vendor) design, engineering, or production process.
Second, in order to find the manufacturer or service provider who is willing to offer the lowest “contribution” pricing on any given job, the buyer must often request price quotations from dozens or even hundreds of vendors. In the actual business environment
e-Lynxx Corporation
Nguyen Cuong H.
Patton & Boggs LLP
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