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The Jury Is In

By Philip E. Quigley, CFPIM, PMP | September/October 2012 | 22 | 5

The Jury Is In What the smartphone patent battle means for today’s supply chain leaders

At the time of this writing, a decision in the Apple v. Samsung patent case has been announced, and most see it as a decisive victory for Apple. There is now a lot of debate on what the consequences will be for companies and consumers alike. People are wondering how this will affect consumer choices, prices, and the future of certain product lines. Some even say that US patent law needs to be completely revised.

But what about the professionals involved in production and materials? This group faces a chaotic future in the short term, and the fallout from the decision will affect these people for many years. 

Samsung, as well as every one of its suppliers and customers, faces the potential worst-case scenario of being forbidden from importing or selling phones in the United States. The company’s planners must be scrambling to figure out their options. Can they still ship phones to other countries despite a US ban? What about future products? 

Meanwhile, Apple likely will up its sales forecasts and production plans. Its supply chain will be tasked to make more product quickly. Leaders also need to push the next iPhone to market and expand its production volume.

The remaining players in the consumer electronics industry also must consider what the decision will do to their supply chains, particularly the makers of phones. One immediate result is that every company will perform point-by-point reviews of their product lines in light of the court case, and they will have to be able to answer tough questions: Will they still be able to sell their products? Do they need to rework existing designs? Will some product designs have to be scrapped? Managers will have to prepare and evaluate multiple scenarios. Everyone at these companies must be flexible and ready to change—fast. 

Far-reaching consequences
Even as supply chain and operations management professionals try to deal with the current chaotic situation, questions remain about the future. Careful thought must go into developing and evaluating alternate planning scenarios. Product pipelines have to be examined for compliance and impacts on future products considered. It may not be immediately clear which approach is better: designing radically new looks and technology, leading to big changes to supply chains; or making minor tweaks to meet minimum requirements. 

This is an interesting time because there is so much danger involved. Cross-functional teams will work around the clock to develop, test, and begin production on new technologies. Perhaps even more importantly, legal representatives will have to be part of the design process, and designers must be made aware of patent laws and figure out how to work through them. And, because the legal landscape is only likely to change further in the next few years, lawyers will become a constant fixture in design meetings. Supply chain and operations managers will have to find ways to get along with them and adapt to their presence. 

Get ready for a wild ride. During this time, it may be vital to go on the offense and not sit back. People at winning companies will examine product lines and develop and patent new technologies, forcing competitors to play the same game. It’ll be important to think meticulously about your designs, but stay positive: New challenges bring out nothing but the best in members of our profession. 

Philip E. Quigley, CFPIM, PMP, is a senior application portfolio manager for Computer Sciences Corporation. He teaches at Chapman University’s Argyros School of Business and Economics and California State University at Fullerton. He may be contacted at pquigley2@csc.com

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