New Solution Providers – POD Procurement looks to save £s and peas (bad pun alert…)

Continuing our series of new solutions providers this week, with a very new business.

I was convinced that the Mars Ice Cream Bar wouldn't sell. And when the legendary Achi Racov, visionary CTO at NatWest, showed me this thing called "the Internet" in 1997, I couldn't quite see the point. So I am very cautious about my own ability to spot what will work and what won't in terms of new products and innovations.

Hence my caution here; we have a new solution provider and a new product for the procurement world that ... I'm really not sure about. It's certainly interesting, different, even innovative. Yet I would hate to predict whether it will become a big success, or fade away quietly.

POD Procurement is a new idea and a new business. I met with Mike Robertson, ex Emptoris and someone who has sales skills but also a strong understanding of procurement, to find out more about POD. He's joined the firm as the MD, and as a shareholder, with a handful of other founder shareholders who don't want to be identified as yet (we might assume they're still holding down the 'day job' at the moment!)

Let's start with the problem POD seeks to address. How do organisations handle a situation where a contract has been let for a certain volume of product, but it then becomes clear that the 'agreed' volume won't be needed? Do you buy the full amount anyway and stick it into stock somewhere; or get into a painful re-negotiation with the supplier? What if they refuse to play ball in that process?

So the end result in many cases is organisations over-buying stock that they don't really need. That's true whether we're talking manufacturing firms with components or spare parts, or National Health Service hospitals and medical supplies and devices.

POD addresses those issues. It is essentially an innovative contracting approach - a set of contract clauses really - that defines how these situations will be handled. The trick is to construct contractual mechanisms that provide a win-win for buyers and sellers in such situations, and embed that into the contract at the time that it is first negotiated.

It's a good idea, and you can see the potential benefit, in certain situations and for certain products at least. But will it gain market traction? I can't think of another "solution" type product that is basically a procurement “good idea” translated into some contractual terms. But there's a first time for everything of course.

POD are looking to sell the product on an enterprise licence basis. But how do you stop anyone from taking the basic idea and copying it? Well, POD have copyrighted the concept which gives them some ability to protect the intellectual property. So if someone ‘steals’ he idea, then they run the risk of being taken to court. But it's a tricky one, and again, I can't think of much precedent in terms of selling something built around a commercial idea and supporting contractual clauses. On the other hand, if the firm can make it attractive commercially for firms to say "yes, that a good idea, we want to use it and are happy to pay a (reasonable) licence fee" then maybe it could take off.

There are some potential product extensions, and Robertson is looking at how training, for instance, might be part of the offering. So we're still at early stages really for the firm, but if you recognise the problem in your organisation, then take a look at the website here. And we'd love to know what you think about the idea as well.

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