The patent's assignee is International Business Machines Cororation.
News editors obtained the following quote from the background information supplied by the inventors: "This invention generally relates to automated inventory replenishment, and more specifically, to inventory management practices that consider the effects of price protection on inventory stocking decisions.
"Many Original Equipment Manufacturers (OEMs) sell their products through business partners such as distributors, solution integrators, or resellers. Price protection has become a standard element of contracts between an OEM and its business partners to achieve the right balance between inventory and customer service levels in supply chains with short product life-cycles and rapidly changing prices. Purchase price protection is a common feature that is used to entice customers into buying products and/or services. There are several different types of purchase price protection offered by retailers. One common form of purchase price protection includes insuring the purchase price of the product and/or service for a period of time, such as 30 or 60 days. While price protection is intended to provide business partners with an incentive to stock sufficient inventory, it often leads to overstocking resulting in higher inventory-related costs for business partners and increased price protection expenses and sales incentive costs for the OEM.
"The prior art includes methods for inventory management under Vendor-Managed Inventory (VMI) contracts. However, existing
"A vendor-managed inventory system may be based on a network environment which comprises a vendor system, a buyer system and an external network connecting the two systems. The buyer system includes a buyer server, multiple workstations and manufacturing devices, a plurality of storage locations, and a sensor device. These entities of the buyer system are connected or linked through an internal network. Each storage location stores a small quantity of production material to be consumed by one of the manufacturing devices. The sensor device monitors quantities of materials at the storage locations via the internal network. When a quantity of any material falls below a specified threshold, the sensor device triggers an alert signal. The alert signal is then transferred to the buyer server, and material requirements information is generated and transmitted to the vendor system. Afterward, the required material is delivered to the buyer's premises by the vendor. These systems, however, do not take into account the effects of price protection on inventory stocking decisions."
As a supplement to the background information on this patent application, VerticalNews correspondents also obtained the inventors' summary information for this patent application: "Embodiments of the invention provide a method, system and computer program product for implementing an automated inventory replenishment process between a manufacturer and a business partner. In one embodiment of the invention, a method is provided comprising the business partner purchasing and maintaining an inventory of goods from the manufacturer, and the manufacturer providing price protection to the business partner for the purchasing of the goods. This embodiment further comprises managing said inventory by using an automated process that takes into account said price protection for the purchasing of the goods.
"One embodiment of the invention, described in detail below, provides a collaboration system that enables optimized buy recommendations, improving operational efficiency in the OEM-business partner relationship. This embodiment of the invention comprises a web-based visibility dashboard that provides real-time visibility to business partner sales out and inventories, and dynamic forecasting analytics. The embodiment further comprises innovative inventory analytics for optimized replenishment decisions, proactive buy and sell alerts for business partners based on up-to-date inventory and sales information, and demand shaping to mitigate demand and supply imbalances.
"Embodiments of the invention provide a number of significant advantages. For example, embodiments of the invention provide a Single point of standardized reporting for an OEM and its business partners, customized inventory decisions for each part based on statistical forecasting and risk-optimized recommended buy, proactive buy/sell headlights to business partners for each part, and proactive automated alerts on stockouts, aging inventory and price protection risk for demand shaping or demand conditioning. Embodiments of the invention also provide robust product transition planning based on information about predecessor, successor and similar pattern, efficient channel collaboration processes with reduced manual efforts, and optimized manufacturing & channel inventory, and end-to-end supply chain synchronization.
"Further benefits and advantages of this invention will become apparent from a consideration of the following detailed description, given with reference to the accompanying drawings, which specify and show preferred embodiments of the invention.
BRIEF DESCRIPTION OF THE DRAWINGS
"FIG. 1 is a diagram illustrating an architecture used to replenish inventory.
"FIG. 2 shows a solution architecture and data flow in accordance with a preferred embodiment of the invention.
"FIG. 3 illustrates functional aspects of components of the present invention.
"FIG. 4 shows a computer display screen that may be used in the present invention.
"FIG. 5 illustrates another computer display screen that may be used in the present invention.
"FIGS. 6 and 7 illustrate an inventory policy of an embodiment of the invention.
"FIG. 8 shows a computer system that may be used to carry out this invention."
For additional information on this patent application, see: An, Lianjun; Binney, Blair A.; Ettl,
Keywords for this news article include: International Business Machines Cororation.
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