I. Saving money by purchasing third party components
When outfitting a new network or upgrading existing infrastructure, savvy buyers know that they can save them or their companies a great deal of money by purchasing expensive equipment secondhand. Yet when consumers are presented with the opportunity to more significantly reduce cost by incorporating third party hardware in the configuration, they often find themselves perplexed. Despite the original Equipment Manufacturer (OEM) or equivalent "approved" hardware1-a fear prevails that such third party equipment is orphaned, unsupported or generally inferior to the manufacturer certified options, and may even void the warranty for the entire network.
II. The purpose of the Original Equipment Manufacturer designation
To better understand the problem and to put it in its proper perspective it is necessary to explore the circumstances by which a part comes to be approved by the manufacturer and designated as Original Equipment Manufacturer (OEM). As the name suggests, the part in question is either the only specifically constructed part or, much more commonly, one of a specific list of parts which have been selected by the manufacturer for inclusion in a more complex system. The name also assumes that these parts are custom built for the given application or even produced as part of the manufacturing process, but in reality this is very rarely the case. Most, if not all, manufacturers of durable goods for the retail market simply do not have any need or desire to create dedicated facilities for the production of each and every component that they integrate into the finished products. They are only interested in ensuring a uniformity of quality and effectiveness in the goods that they intend to send to market carrying their brand, and to this end they choose the components which serve these needs with a maximum of dependability and cost efficiency. In order to facilitate uniformity in production and consistency for repairs and maintenance, the manufacturer compiles a list designating the parts and the vendors upon which they are quite to supply them. These happy designates are the approved or OEM equipment.
But is OEM necessarily better or more suitable? One must suppose that in a theoretically unlimited and free market vendors will always step forward to produce such valuable and useful goods at lower cost, and possibly even at superior quality. Indeed, the Illinois State Supreme Court seems to have determined that this is the case here. In litigation between a major automobile insurance company and its customers, this court found in 2005 that the insurance company did not act in breach of contract or in a fraudulent manner by arranging for the repair of damaged vehicles with non-OEM parts. Of course, there may be some unscrupulous suppliers who bring counterfeit and defective parts to market, compromising the valuable systems into which they are incorporated. There can be no doubt that consumers' concerns might be allayed by the sight of the well regarded brand and the designated part which is clearly the correct component for the given application.
III. Manipulation of consumers to enrich manufacturers
Manufacturers obviously do not create their approved OEM parts list solely out of altruistic concern for the welfare of their customers. By establishing a set catalog of parts and suppliers, they can leverage their vendors and bring down the costs associated with production. By ensuring that a given part is clearly specified and exclusively offered they also eliminate the guesswork in maintenance, which would very well complicate service issues and divert support resources. Most importantly, manufacturers of durable goods almost always set themselves up as the exclusive distributors of these OEM parts, effectively creating a monopoly2.
In the computer and networking industries, manipulation of the parts markets is more subtle and sophisticated. If only because of the proliferation of information effected by the growth of the internet, it has become difficult for manufacturers to entirely corner the market on components. Some have tried and have enjoyed limited success as a result of the power and reputation of their highly respected brands. In most cases third parties are allowed to distribute parts and are still designated as "approved" or OEM, which should not be surprising if one considers that almost none of the parts are anything other than third party to begin with. In fact, in many cases two identical parts, made by the same manufacturer, will be designated differently depending on whether or not they have been distributed through the agency of the manufacturer. What purpose, then, is served by the OEM appellation, and how does the manufacturer benefit? More importantly, when does a manufacturer of computer equipment or networking hardware cross the line that separates protection of the end user's interests and predatory capitalism?
IV. Fear created among consumers that third party parts will void warranty
In order to answer these questions, it is necessary to more closely examine some of the specific tactics that might be employed by an avaricious manufacturer to compel customers to make use of only the parts explicitly approved. This creates an artificial shortage of products in the market, drives up prices, and restrictions the avenues of distribution. In highly complicated and specialized arrays of equipment such as those found in electronic devices, especially network configurations, the manufacturer can exercise significant leakage by means of the conditional warranty. A warranty is a guarantee that a manufacturer makes to the end user that the manufactured product is free of defects, reliable, and serviceable in the event that trouble should arise. For consumers who rely heavily on their array of electronics, such a guarantee is absolutely critical to the operation of their computer networks and to their bottom lines. For a manufacturer to employ a vaguely worded or excessively restrictive warranty in a manner that coerces compliance with its particular interests is a very powerful tool. It is, in fact, so powerful that the United States Congress made it illegal to tie enduring warranty coverage to the ingoing purchase of designated goods or services. (Magnuson-Moss Warranty Act, 1975) The same act prohibited companies from explicitly offering warranty coverage and then failing to provide that coverage by creating conditions on the warranty to effectively nullify it.
After these legal restrictions on the means and expand to which a vendor can mortgage his warranty protection to forced compliance of a consumer, it is all too common for the sales representatives of large manufacturers to suggest that failure to employ an OEM part will invalidate the warranty . Because the law clearly and explicitly forbids such business practices, the representative and the company will almost never put such a threat in writing; even if they do, they will couch it with so much ambiguity that it will never hold up legally. Unfortunately, even the suggestion that warranty service could be forfeited by failure to purchase the manufacturer's chosen goods is enough to influence a great many otherwise savvy consumers to pay greatly inflated prices for OEM parts, further enriching sales representatives and their employers. Whatever their individual merits, it is absolutely fallacious and unlawful to contend that a warranty or service agreement should be contingent upon integration of exclusively OEM parts in the system.
V. The advantages of buying from a reputable source
It is the right and the responsibility of all consumers to understand the products that they purchase and the component parts necessary to maintain or upgrade them. It is a happy byproduct of the free market that educated salespeople exist to help explain the relative merits of various solutions where the information is too complex or voluminous for a layperson to understand. These same salespeople, if they are reputable and honest, will be eager to stand behind the products that they are selling, and should be expected to back that confidence up with a warranty or service agreement. It should go without saying that the vendor for the part should be identifiable and established enough to make good on their guarantees and, accordingly, that they should be a fully incorporated and identifiable entity in a jurisdiction where consumers have recourse to protect their rights. Under such circumstances, it is perfectly reasonable for consumers to fall back upon their vendors' assurances, even where the manufacturer can not (or will not) certify the product, and then save them and their companies significant sums of "monopoly tax. " A good example of this type of reputable company is UsedCisco.com which stocks both third party and approved products and offers a lifetime warranty.
Customers must use their better discretion in making expensive and mission-critical purchases, but they should be careful not to place them at the mercy of manufacturers who are inherently hostile to competition and insensitive to consumers' best interests. Ultimately, the final determining factors in any significant purchase will be cost and reliability, and end users should rest assured that they can make these important determinations without the added complication of potential ramifications for the warranty.
Source by Steven J. Adams
Saturn has recently announced that the new 2007 Aura Green Line hybrid will be available at a starting price of $ 22,695 inclusive of the destination charge, making it as the lowest-priced hybrid on the market. Aside from its value-focused price, the Internal Revenue Service has also certified the Aura Green Line buyers to a tax credit of $ 1,300.
Saturn General Manager, Jill Lajdziak said, "The Aura Green Line is a great value among the hybrids in the mid-size car segment. With starting sticker price over $ 2,000 less than any mid-sized hybrid sedan and a $ 1,300 tax credit, it makes true hybrid fuel savings available to more people than ever before. "
The Saturn Aura Green Line receives an official EPA fuel economy rating of 28 mpg for city driving and 35 mpg for highway driving which represents up to 30 percent improvement in EPA combined fuel economy compared to the non-hybrid Aura XE model depending on the driving conditions .
The Saturn Aura Green Line is assembled at the Fairfax Plant of General Motors in Kansas City, Kan and is now ready to hit various Saturn Retail facilities.
What makes the Saturn Aura Green Line different from the other hybrid out there? The hybrid system used in the Aura combines sophisticated controls with a precise electric motor / generator mated to a 2.4 liter engine. The system offers a fuel economy gains by providing electric power assist during acceleration and an early fuel cut-off during deceleration with torque leveling and shutting the engine off at idle. The hybrid system of Aura also captures electrical energy through regenerative braking.
Regenerative braking according to Wikipedia is a system that reduces the vehicle's speed by converting its kinetic energy into electrical energy. This electrical energy is stored for future use or fed back into a power system for use by other vehicles.
Aura Green's hybrid powertrain deliveries 164 horsepower or 122 kW at 6400 rpm and 159 lb-ft or 215 Nm of peak torque at 5000 rpm. The concept for the Saturn's new hybrid sedan is based on the all-new Aura midsize sedan which won the 2007 North American Car of the Year award. The Green Line features the same list of comprehensive package that earned Aura full five stars in government side-impact and frontal crash tests making it as one of the safest vehicles available. Some of the standard features included in the Aura Green are as follows: dual-stage front, side head-curtain and front seat thorax protection air bags, four-wheel disc brakes with ABS, StabiliTrak electronic stability control, and GM's OnStar safety and security system. The Aura Green will also be equipped with original GM parts that are recognized for quality and durability like GM shock absorbers which disperse or absorb energy and in the process prevails the uncontrollable movements of the vehicle especially when driving on uneven road surfaces.
The Aura Green is just one of the four hybrids that Saturn has previously announced together with the 2007 Vue Green Line which was launched last summer. The Vue Green Line employs the same hybrid technology used on the Aura Green and provides an EPA highway fuel economy rating of 32 mpg.
Saturn for 2008 will offer the Vue Green Line with the first front-wheel-drive application of GM's new, 2-mode hybrid system and plug-in technology. Its Lithium-ion battery pack, which hopefully will be ready soon, along with some powerful electric motors plus highly efficient electronics, will help the Vue to obtain a much higher fuel economy.
Source by Noah Scott
The economy can be analyzed using both market-driven and production-driven approaches to industry classification. The North American Industry Classification System (NAICS) uses a market-driven approach; the older Standard Industrial Classification (SIC) uses a production-driven approach.
Under a market-driven approach, the economy comprises goods-producing and service-providing industries. Goods-producing industries include: natural resources and mining, construction, and manufacturing; service-providing industries include: wholesale and retail trade, transportation (and warehousing), utilities, information, financial activities, professional and business services, education and health services, leisure and hospitality, and public administration.
Under a production-driven approach, the economy comprises product-driven and service-driven industries. Product-driven industries comprise enterprises that manage inventories available for sale as primary activities (regardless of whether they transform them or not). Under this approach, the retail, wholesale, and food service industries are product-driven. (The kitchens of food service providers are equivalent to factories.) Product-driven enterprises may have extensive cost accounting and operations practices for inventory management.
Industry classifications can be applied to an enterprise as a whole (the primary industry), and to the establishments within it, which may be in differing secondary industries. Establishments are facilities that include plants (factories and warehouses) and branches (retail and wholesale outlets).
For example, the hospitality industry is service-driven; under the production-driven approach, the bar and restaurant establishments within a hotel are product-driven. The entertainment industry is service-driven; under the production-driven approach, the retail and bar establishments within a theater are product-driven. The health care industry is service-driven; under the production-driven approach, the retail pharmacy establishment within a hospital is product-driven. Under the market-driven approach, all of these establishments are service-providing.
For example, a manufacturing enterprise is goods-producing under a market-driven approach, and product-driven under a production-driven approach. If it also operates a retail delivery system, the stores are service-providers under a market-driven approach, and are product-driven under a production-driven approach. If all sales revenue is sourced from its own products, the enterprise is in two primary industries. However, if forced to decide, its selection should be based upon core competencies – activities that it performs well. The enterprise can be divided into two separate business units: manufacturing and merchandising. The merchandising unit is an internal customer of the manufacturing unit. However, depending on strategy and policy, the manufacturing unit could sell products to wholesalers and other retailers, and the merchandising unit could buy products from other manufacturers and wholesalers. Under a market-driven approach, the manufacturing unit is goods-producing and the merchandising unit is service-providing, whereas under the production-driven approach, the merchandising unit is product-driven.
The make-up of the economy changes overtime as newer industries emerge and grow and older industries mature and decline. For example, the manufacturing industry is shifting from vertically integrated to strategically outsourced. Strategic outsourcers may manufacture specialized components and assemble finished products. However, by outsourcing the manufacturing of utility components to specialty scale manufacturers, strategic outsourcers can lower their production costs.
Biotechnology and nanotechnology are emerging industries. The information industries are growing as technology becomes more ubiquitous, and as knowledge is packaged in digital products. Knowledge is information that has been learned and retained. In the future, knowledge will be retained extensively in electronic form.
Products and services…
The term “product” is associated with something that is tangible – the resulting inventory from agricultural, mining and drilling, construction, and manufacturing activities. Outputs are either end-products, or components that are assembled into end-products in downstream processes within the enterprise or in its customers.
The term “service” is associated with something that is intangible – capabilities either delivered at the point or time of sale, or shortly thereafter, or as a supporting service. Supporting services can be purchased at the time of sale for downstream use, or later, and consist of such items as warranties beyond those bundled with the product, preventive maintenance, and routine cleaning and repairs.
Functions and features of products are easier to discern than those of services, which are event or activity driven, and may occur in the future.
The term “time of sale” means when a contractual or non-contractual agreement between a buyer and a seller is made, and does not necessarily mean when revenue is recognized and earned. Revenue is recognized and earned according to the accounting principles that fit the service offering, which may be over a period of time.
A commodity is a product or service that is indistinguishable and interchangeable with another of the same type because there is little to no value added. Many commodities are natural, such as produce, minerals, oil, and gas. Services can be commoditized too. The distinguishing factors of a commodity provider include convenience, quality of service, and price.
Product-driven enterprises also offer delivery and supporting services. Delivery services include arranging for transportation, dealer preparation, training, and gift wrapping. Supporting services include cleaning, repairs, and maintenance. To remain competitive over time, enterprises have to add services with their product offerings that exceed customer expectations. However, if customers require such services, then they must become part of the basic offerings. For example, bathroom facilities and color TV are included in modern hotel rooms, even though the primary purpose is providing a place to sleep.
Although services are intangible, their effects are not. Transportation services move people, cleaning services remove dirt and stains, and repair services restore items to working order. Services require facilities, equipment, and supplies that are bundled in. When products are bundled in, the enterprise pays sales or use tax, if applicable; when products are sold with services, the customer usually pays sales or use tax, if applicable.
Service-driven enterprises can produce tangible deliverables. For example, dry cleaners produce clean and pressed clothes; professional service firms, such as architects, accountants, attorneys, and consultants produce reports; and engineers produce design drawings that can be transformed into facilities, equipment, or other tangible products.
The recording and movie industries employ technologies that can capture sound and pictures. Starting in laboratories, these industries transform science into art. Hence, live entertainment performances (services) can be transformed into recorded products. As a consequence, an event or activity can be reproduced, duplicated, distributed, and repeated to the public-at-large indefinitely. Digital products are impacting traditional manufacturing, distribution, and consumer buying behaviors, and placing intermediaries at risk.
Process control and information technologies have enabled seamless integration between designers and manufacturers. The “design-to-construction” process becomes ubiquitous as computer-aided design and manufacturing technologies (CAD/CAM) enable a designer in one location to transmit specifications to manufacturers in others. The designs are virtual, and result in instructions that control manufacturing equipment in both local and remote locations. As a consequence, manufacturing can be outsourced strategically to any manufacturer that can accept electronic designs anywhere at any time. Because the process is seamless, the precision is higher.
As more enterprises adopt the design-to-construction model, dramatic changes will occur in the structure of industries. For example, in the publishing industry, books can be printed on demand from electronic files upon receipt of orders placed over the internet, eliminating the need for physical inventory available for sale at printers, publishers, and bookstores. The electronic files represent a virtual finished goods inventory from which physical products can be made when necessary. As a consequence, inventory carrying costs are lower.
Both product-driven and service-driven industries render service from centers that receive inbound and place outbound service and telemarketing calls. Call center activities can be outsourced in a similar fashion to manufacturing.
The notion of strategic outsourcing can be applied to almost every function in an enterprise provided intellectual property is protected. However, although management consultants may be used in the development of strategy, the ultimate responsibility for planning, deployment, execution, and performance remains in-house with the governance function.
Products and/or services…
The term “products and/or services” describes collectively all types of products and services.
Service-driven industries are evolving into providers of both “product-oriented” and “service-oriented” services. In order to differentiate product-oriented services from the delivery and supporting services, the term “service-oriented” products provides more clarity. Service-oriented products must be definable, duplicable, and repeatable. They are intangible outputs of processes that are represented by tangible items, packaged in a definable form. Technology plays a major role in the delivery through hardware, software, and both voice and data telecommunications. “Hard” products are tangible and “soft” products are intangible.
For example, traditional land phone line services were offerings with few differentiating features, primarily in the style of equipment. As the telephone system migrated from electro-mechanical to electronic, the offerings were transformed into service-oriented products with features such as call forwarding, caller identification, call waiting, and voice mail. Cell phone offerings are service-oriented products with more extensive functions and features than land lines. Cell phone service-oriented products have cameras built-in, and have delivery and supporting services bundled in such as account information, internet access, and application software for calculators, calendars, contact information, notes, games, music, pictures and movies. Cell phone and computer technologies are converging.
In the financial and business and professional services industries, service-oriented products are packaged with such items as accounts, agreements, brochures, contracts, databases, documents, equipment, facilities, policies, procedures, and statements.
In the leisure and hospitality industries, service-oriented products such as flights, hotel rooms, car rentals, and limousine services are packaged with facilities, equipment, and supplies. The types of facilities and equipment define specific offerings. For example, an Airbus A380 renders a different experience from a Douglas DC3 even though the principal service is the same: providing air transportation. A hotel room with a view of the ocean renders a different experience from one with no windows at all, even though the principal service is the same: providing accommodation. The quality of the accoutrements such as blankets, pillows, towels, newspapers, cable TV, internet access, and fruit baskets can affect the overall experience. A Cadillac renders a different experience from a Chevrolet, even through the principal service is the same: providing a rental car to drive, or a limousine.
Travel-related service-providers bundle air, hotel, car rental, and limousine services into packages to make the buying decisions easier for consumers. Event planners bundle travel-related services with conference and convention services for enterprises.
Consumables, durables, and facilities…
Manufactured products consist consumables and durables.
Consumables are products change or wear out as they are used and comprise food, clothing, personal care, health care, household supply, and office supply items. Media such as books, records, audio and video CDs, and DVDs are classed as consumables – the intellectual property is worth far more than the media.
Durables are long lasting equipment items such as appliances, furniture, and vehicles.
Digital products may involve no media if they delivered electronically other than the server of the publisher and the electronic device of the user.
Facilities are the outputs of construction activities and are made of durable materials.
Contractual or non-contractual products and/or services…
Agreements are contractual or non-contractual based depending upon the type of offering, and the nature of the relationship between buyers and sellers.
Consumable products can be sold with the right to return for exchange or refund within a certain period of time. Durable products can be sold with agreements that define warranties and maintenance.
Service-oriented products and services can be sold with agreements that specify exactly what is to be delivered and when, with procedures for reporting problems or complaints.
In negotiations, discussions should embrace the specific functions and features of hard and soft products, and the delivery and supporting services. Experienced negotiators pay attention to both the tangibles and intangibles because the total cost of ownership comprises both.
Digital-construction and digital-manufacturing…
As technology continues to develop, service-oriented products will become more common because it makes intangible items definable. New knowledge-based industries will emerge.
The reproduction of software on physical media is classified as goods-producing, and all other development and publishing activities are classified as service-providing under NAICS. However, software and other digital products are durable because they can last indefinitely, even if they have to be transferred among storage media. Software products are developed by service-providers such as business and professional services firms, publishers, and “in-house” developers. Nevertheless, software development activities require the project management disciplines of goods-producing industries, such as construction and manufacturing, to be successful.
The “digital-construction” and “digital-manufacturing” industries are evolving: digital construction delivers software; digital manufacturing delivers soft service-oriented, information, and knowledge-based products. However, through CAD/CAM processes, software delivers hard products too. In the future, almost all hard and soft products will result from digital-construction and digital-manufacturing processes.
Defining product and/or services is an enterpriship (entrepreneurship, leadership, and management) competency.
Source by Nigel Brooks