Network News Volume 38 Issue 3
Welcome to this fourth on-line edition of the Service Industry Association newsletter. Please let us know what you think of the contents by sending an e-mail to the editor.
"Beyond Service 2000"
by: Claudia J. Betzner
The Greatest Show on Earth for the high-tech service industry -The 2000 SIA Conference - is scheduled for February 27 - 29, 2000 in Las Vegas at Caesar's Palace. The theme Beyond Service 2000 will focus on Service. How to survive the massive industry changes, how to prosper from those changes, what are the changes and how to get beyond " the millennium menopause."
The agenda, which is included with this Newsletter, is the best product we have ever produced with each of the three Service Groups spending hours of Conference Calls to determine what issues you want to discuss, what's hot with you and how to overcome the challenges you the membership, have identified. As you can see by the agenda we have added much more content by Service Group and limited the General Session to specific topics and concerns consistent within all three Groups. The Breakout Sessions are not only working group sessions but have specific content key to your growth in your segment of the service industry. Some of the topics to be discussed for the Computer Service Group include: Profiting from Warranty Service - Y2K fallout from upgrades, How to increase revenue through upgrades, streamlining the reimbursement process and tracking tech time usage. The session will be chaired by The Gartner Group and Eric Rocco. Other major sessions include: Professional Services, Outsourcing Strategies, Alliances and New Programs from Open OEMs, A Buyers & Sellers Forum and a major Roundtable which will discuss things like automated dispatch vs. answering services.
The Medical Service Group will review: Warranty Service, The FDA Initiatives including possible certifications, Tech Support, Vendor & Supplier Forums on Parts Sourcing, Training, etc. It will also include a session which will focus on shared knowledge, how to provide higher quality, lower cost distributed trackable service.
The Business Products Group will have an owners meeting and will include major topics of interest to the group including Software Diagnostics, Tech Support, Parts, Training and Warranty Service.
Major General Sessions include: E-Commerce & the Internet Technologies which will discuss How the Internet can enable your business. This session will include a Forum of Service Companies, Vendors and Customers. The Industry Leaders Forum will bring you up to date on the major landscape changes going on in the Service Industry. The Parts Panel will include Parts Companies, Info Sources, Refurbishers and Remanufacturers. This session will provide new information on this important subject. Another important General Session is The Legal Forum & will include how past cases across the Service Industry have affected ISOs and the Industry. This session will include actual Service Companies who have experience litigation and what effect it had on their company with Ron Katz giving the overview of how the consolidation of these cases have affected you as a Service Company.
The conference will kick off on February 27, Sunday Morning with a Golf Tournament at Paiute Golf Resort just north of Las Vegas. The awards presentations and announcement of the winning trophies will be done at the Welcome Reception at 6:30 P.M. on the 27th.
The Conference Sessions will be on Feb. 28th and 29th. The conference
will conclude with a wrap-up session at 4:00 P.M. on the 29th. The
Grand Finale is scheduled for 6:30 P.M. on the 29th. An expanded Vendor
Showcase will include a major prize which will be given at
the Grand Finale. In order to qualify you must have your card
stamped by all Vendors and attend the Grand Finale.
Contents
SIAThe President's Letter
To all members and friends of SIA
I am pleased to have the opportunity to share an interim update with you re the growth and activities of your trade association.
First, the SIA Board is very busy with plans and preparations for
the Annual Conference. I'm pleased to share with you that this year's
conference will build it's majority of time around issues/topics pertinent
to each of the 3 subgroups?medical, copier/bsn products, and computer.
This is in recognition of the many in-depth matters of interest and
importance for each segment. NEVER has there been a chance for you
to impact the actual content of this very important annual meeting
more than you can this year! To share any idea or urgent topic, please
call the chair of your group who are each leading program planning??
Dave Johnson can be reached at 630 350 8060, Medical Services Group;
Randy Parks can be reached at 727 787 1208, Computer Services Group;
and Lee Carr can be reached at 404 355 6262, Copier/Bsn products Group.
They'll be happy to talk with you and share current conference plans.
So, if you've got a pesky problem or issue that needs airing out,
don't sit on it, give a call!
Second, I'm able to share that efforts have begun to grow our association
thru cooperative/affiliative discussions with other similar associations
in the Medical and Computer groups. These talks are initial but far?
reaching and I hope to have more detail for you at the Annual Conference.
I'm sure the SIA will be a true leader in this important area. Just
as much thrust into leadership has been the Copier/Business Products
Group with recent and still unfolding events re OEM business practice
in the area of diagnostic
software. This topic and panel discussion at the Annual Conference
is worth your airline ticket there by itself!!
Third, the Board officers and management have been hard at work striving to really thoroughly examine what each of you in your businesses probably call "basic blocking and tackling". By this I mean we have reviewed and examined our business practices/reporting in order to provide more accountability; we have reviewed relationships with outside resources (legal, accounting, Exec Director) to keep them in line with planned growth; we have stressed focus on growth and benefitted from every Board member's personal resolve and effort in this area which has resulted in six new Sponsors plus nineteen new members or a total of twenty-five new companies in SIA; and we have embarked to develop a conference agenda driven by what matters most to each of you? issues specific to your company's challenges right now.
In closing please let me ask you to remember to thank Board members you know for serving voluntarily on behalf of this very competitive service industry that puts food on all our tables. They have my thanks and deserve yours.
As always, please let me know at any time(phone 606?491?6279) how SIA can benefit your company even more in the new millennium. And please, tell other business associates about this hard?working trade assoc. !!!
SEE YOU AT THE ANNUAL CONFERENCE IN VEGAS THIS FEBRUARY!!
Respectfully,
Mark Streety,
SIA Board President
Contents
Got Choice? Why Aftermarket Competitors
Should Unite Against The State Farm Verdict
by Ronald S. Katz*
Aftermarket competitors in many industries have been fighting for years to show that their products and services are as good as, if not better than, those of the original equipment manufacturers (OEMs). Aftermarket competitors have therefore provided the essential component to a capitalistic economy - competitive choice.
OEMs have not made this struggle easy, whether in the field of refilled printer cartridges, automotive parts, computer service, medical device service, telephone service, Internet browsers, or any of the numerous other aftermarkets in our economy. Indeed, some OEMs have resorted to the spreading of FUD (fear, uncertainty and doubt) in their campaigns against legitimate aftermarket competitors.
The latest result in the battle between OEMs and aftermarket competitors is a $1.2 billion verdict against State Farm Mutual Automobile Insurance Co. rendered in early October. Although the verdict applies to generic auto parts, it affects all aftermarket competitors with an unjustified blanket condemnation of inferiority. As reported in the October 9, 1999 New York Times, the judge in the State Farm case said "...that generic parts were inferior to factory-authorized parts." The Wall Street Journal report of October 11, 1999 quoted one of the plaintiffs' lawyers as saying that "it's a demonstrable lie" that aftermarket parts are as good as OEM parts.
The case was brought on behalf of State Farm policyholders who alleged that their insurance contracts with State Farm provided that their cars would be restored to pre-accident condition and that could not be done with aftermarket parts. These consumer allegations appear to be in the minority, however. The Times reported in its October 9 article that "Consumer groups have tended to side with State Farm, contending that automakers overcharge for factory-authorized parts and that generic parts are just as safe and have just as high quality."
Aftermarket competitors know that the main beneficiaries of this verdict will be the automobile manufacturers, who have a long history of trying to squelch aftermarket competitors. For example, for many years the automakers lobbied for legislation that would give them an unprecedented design patent on their parts. Such legislation would have completely eliminated competitive choice in this important aftermarket. The existence of such choice has dramatically lowered prices for consumers with no sacrifice in quality on parts from reputable aftermarket competitors, some of which are very large companies themselves. Indeed, quality should not even have been an issue in the State Farm case because State Farm warrantied the quality of the parts used in its repairs.
The situation for aftermarket competitors in general could get worse as a result of the State Farm case. The New York Times article reports that "...yet another case might be filed accusing big insurers nationwide of conspiring to make generic parts seem as good as factory-authorized parts." Such an absurd case would be the most brazen FUD yet, staining the reputation of thousands of legitimate aftermarket competitors.
So, what is to be done? For one thing, aftermarket competitors and their trade associations should be filing friend-of-the-court briefs supporting State Farm's position as the case goes through the appellate process. It should be noted that State Farm once filed such a brief in the landmark U.S. Supreme Court Kodak antitrust case in support of aftermarket servicers of Kodak copiers.
Second, legislative efforts should be made like those opposing Lexmark's so-called rebate program. Insurers should absolutely not be prohibited from using aftermarket parts of at least equal quality to OEM parts. As with the Lexmark legislation in various states around the country, state purchasing agents should be required to use generic parts of equal quality and lower price.
Finally, aftermarket competitor trade associations should join together in a massive public relations/advertising campaign to communicate to the public the benefits of aftermarket competition. Just as the famous "Got milk?" slogan has been a very effective promotion, a similar promotion by aftermarket competitors ("Got choice?" would be one possibility) could be equally effective. The "Got milk?" promotion is sponsored by something called the National Fluid Milk Processor Promotion Board, which is probably nothing more than a collective of milk producers and their trade associations. Aftermarket competitors and their associations could also get together to communicate their message to the world: aftermarket competition means lower prices, higher quality and more choice.
In conclusion, the State Farm verdict is not just an isolated incident with no effect on aftermarket competitors in other markets. The verdict costs a shadow over all aftermarket competitors, a shadow that is not based on fact. Aftermarket competitors must all hang together or else they will hang separately. It is important to reverse this verdict in the courts of law as well as in the legislatures and in the court of public opinion.
Other Legal News
Remember Kodak? A recent positive decision has been rendered by Judge David Levi in the 9th Circuit surrounding a case - Red Lion Medical Safety, et al vs. Ohmeda, which involved a manufacturer of Anesthesia equipment who refused to sell parts or provide training to ISOs for competitive advantage in order to monopolize the service industry. The motion for Summary Judgement requested by Ohmeda was denied by Judge Levi, who quoted very eloquently "the Landmark Kodak case" which set the standard for how a manufacturer is to treat this issue.
In an interview today with Ted Millstein of Berger and Montague,
attorneys for the Red Lion group of ISOs he said, "this
decision will benefit all ISOs who provide service and must obtain
parts and training from the manufacturer," he went on to say,
"Judge Levi went to great lengths to explain and conclude his
opinion based on the law and that this is the first case where a Judge
applied Kodak to the letter of the law." According to Millstein,
the case is currently in the damage discovery stage and then moves
onto trial which is expected to take one-year to eighteen months for
the final outcome to be completed.
A Two-Step Program for Reducing Exposure to Patent Infringement
Lawsuits (excerpt from a recent Katz article)
The first step of the program is to conduct an intellectual property
audit. An intellectual property audit is performed by a law firm specializing
in this area of the law. The object of the exercise is to examine
the products and packaging of a company in order to ferret out problems
and potential problems. Such problems can exist even in the most law-abiding
companies. Attorneys experienced in this complex area of law can spot
potential trouble spots that a non-lawyer would probably never think
about. If the audit reveals a problem it can then be addressed. If
an issue falls into the grey area the lawyers can provide information
so the company can weigh the costs and benefits of fixing the problem
against the potential increased risk of litigation. In some cases
the lawyers can give an opinion that a device is not infringing on
any existing patents. Such advice can provide a defense to a suit
for patent infringement.The mere fact that the opinion was obtained
from counsel greatly lessens the chance that there will be a finding
by a judge or jury of so-called "willful infringement."
Such a defense is not trivial because finding of willful infringement
can generate triple damages.
Second, procure patent infringement insurance. Obviously, insurance companies are not going to issue such insurance unless counsel have reviewed the company's product portfolio and given the company a clean bill of health. Upon the successful completion of such an examination insurance can be issued.
Software Diagnostics Steering Committee Update
Over the course of the last several months the group has been exploring
options to solve the Software Diagnostics issue and the predatory
pricing policies of some manufacturers who would like to see competitors
just go away so they can monopolize the industry peacefully. We, as
a group, will not just go quietly into the night and are in the final
stages of mounting a campaign designed to solve this issue which I
will be happy to discuss with you individually but for strategic reasons
will not list here the groups decision but will tell you it will be
the most aggressive action taken thus far by Service Industry Association,
your association which looks after your interest and the interest
of our Customers with a goal of Openness and providing Customers with
Choices.
Contents
SIA announces new members
| Biomagnetice, Ltd. Donald Kercher Jr., V P 610 594 9573 Exton, PA Spec: MSG MRI Service |
CSI/Computer Specialists, Inc. Thomas J. Roseberry, Contact 800 505 4366 Gaithersburg, MD Spec: CSG ISO |
Clover Medical Eqpt. Srvs., Inc. Ronald Luich, PE 860 437 4609 Buffalo, NY Spec: MSG Depot Repair Anesthesia |
| Davis Instrument Co. Inc. Lisa Kruesel, President 920 478 3579 Marshall, WI Spec: MSG Sterilizers/Lab eqpt Service |
Omnitek, Inc. Algerd D. Baldauski, President 908 852 8500 Hackettstown, NJ Spec: BPG Xerox Parts |
Streety & Associates Mark Streety, President 606 491 6279 Covington, KY Spec: MSG Consulting Srvs. |
| Biomedical Concepts Karl Foster, President 504 647 1746 Manderville, LA Spec: MSG Biomedical Service |
Safety Anesthesia Robert Burke, President 516 358 2348 Flora Park, NY Spec: MSG Anesthesia Service |
SIA's new Sponsor: Omnitek, Inc.
Omnitek, Inc. Was founded in 1978, dedicated to supplying photo receptors to the after-market service organizations involved in the copier and printer industries. We have developed selenium, selenium alloy, and arsenic triselenide coatings for virtually every application in the printing/copying industry. While our initial focus was on desk-top copiers, we have shifted our efforts into more specialized areas in recent years. High speed copier belts and large format copier and printer drums are now our mainstay.
The Selenium market is "winding down" so Omnitek is "winding up" its efforts to address the changes in the marketplace. The new millennium will be ushered in with new product lines - Organic photo receptors - in doth drum and belt formats. Omnitek remains committed to supplying superior products to the replacement market at a fair price. Contents
Our Sponsors
| Beckman Coulter Vic Hasbrouck, Manager 714 773-6675 |
CSU Richard L Watkins, Pres. & CEO 913 541 0960 |
DecisionOne Corporation Tom Fitzpatrick, President & CEO 610 725-2500 |
| D. F. Blumberg Associates, Inc. Don Blumberg, President 215 643-9060 |
EAD Systems Corp. Dave DeGiorgi, Principal 781 767-5422 |
Healthtech Publications Jack Spears, Publisher 401 434-1050 |
| IBE Digital Ron Varing, President 562 921 0202 |
Maintech Frank D’Alessio, C.O.O. Carole Greene, V.P. Marketing & Sales 973 614-1700 |
MasterPlan Malcolm Ridgway, Sr. V. P. 818 734-8376 |
| Northrop Grumman Joe Mulderig, Pres. GSS Div 516 563-6907 |
Novare Services, Inc. Rory Scheving,Vice President 810 735 6335 |
Omnitek, Inc. Al Baldauski, President 908 852 8500 |
| Omnitech Gencorp, Inc. Hollye Davidson, CEO 305 599 9898 |
TFE Technology Holding LLC John Walker, President 801 298 8000 |
Service GroupReports
MSG - You can see by the Conference content this group has
been active with conference calls to identify content. Other news
- SIA and IAMERS Board of Directors will meet at the RSNA show
in Chicago to discuss alliances and how we can work together.
CSG - This group has had many conference calls to discuss value
adds
and conference content. Other discussions include working out an arrangement
with AFSM for a joint fall event and hosting their spring Medical
Meeting.
BPG - This group had a very successful meeting in Las Vegas
in September and SIA held their Board meeting in conjunction with
the Owners Meeting. At the meeting specific time was given to solving
the Software Diagnostics issue which is a part of the SIA Steering
Committee discussed earlier in the Newsletter, this remains the key
issue.
Contents