Supply chain and inventory risk management system

Abstract

A system and method for supply chain and inventory risk management that supplies inventory from a manufacturer to a plurality of customers. An owner entity of the system is transferred a plurality of customer agreements which describe requirements for the distribution of the inventory to the customers in agreed-upon amounts in exchange for agreed-upon payments. Transfer of the customer agreements allows an electronic system of the owner entity to forecast and place orders purchasing from the manufacturer the amount of inventory that will be needed by the customers. Further, the transfer of the agreements increases the certainty that inventory purchased by the owner will be sold to the customer. The electronic owner system may also commission the services of a logistics agent that is capable of providing shipping and handling services customized to high-risk inventory, such as electronic components, increasing the owner's profit on the sale of the inventory.

Description

CROSS-REFERENCE TO RELATED APPLICATIONS[0001]This application is a divisional of U.S. application Ser. No. 10 / 256,652, filed Sep. 27, 2002, which is hereby incorporated herein in its entirety by reference.BACKGROUND OF THE INVENTION[0002]1. Field of the Invention[0003]The present invention is directed to the use of supply chain management system, and in particular, supply chain management systems for high-risk inventory goods that are prone to damage, depreciation in value and obsolescence.[0004]2. Description of Related Art[0005]Manufacturing companies often must carry considerable inventory when goods go unsold due to insufficient demand, or when goods are stockpiled in anticipation of future demand. Such excess inventory tends to tie up valuable capital and is expensive to store and manage. Excess inventory can also have a negative effect on the manufacturing company's balance sheet which depresses its stock price and increases its borrowing costs. Further, the inventory itself m...

AI Technical Summary

Benefits of technology

[0012]The present invention addresses the above needs and achieves other advantages by providing a system and method for supply chain and inventory risk management that supplies inventory manufactured by a manufacturing entity to a plurality of customers. The system includes an owner entity that is transferred a plurality of customer agreements which describe requirements for the distribution of the inventory to the customers in agreed-upon amounts in exchange for agreed-upon payments. Transfer of the customer agreements allows the owner entity to forecast the amount of inventory that will be needed by the customers and increases the certainty that inventory purchased by the owner will be sold to the customers. The owner entity may also include a logistics agent that is capable of providing customized shipping and handling services. The combination of customer agreements and customized logistics services maximizes the value of the inventory, and particularly high-risk inventory such as electronic components, that are non-fungible, fragile, environmentally sensitive and prone to obsolescence, to both the owner entity and the manufacturer.

[0016]In still another aspect, the owner entity may partner with, or create, a logistics agent as part of the management system. For instance, the logistics agent may be a commercial package carrier capable of managing distribution of the inventory to the customers. Other services may also be provided by the logistics agent beyond delivery, including freight forwarding, or import and export brokerage services. The shipping logistics agent may also facilitate visibility of the supply chain by providing reporting or tracking services.

[0020]For the manufacturer, the inventory risks, the risks of non-performance of the agreements and non-payment by the customer, and the risks of short-term market price fluctuation of the inventory are shifted to the owner. For the owner, certainty is added to the demand for inventory goods, and the prices paid for those goods, through the transfer of customer agreements to the owner. In this manner, the owner is able to manage the inventory and maximize its return on the inventory, thereby allowing the owner to pay higher prices for the inventory purchased from the manufacturer. This is especially true for high-risk inventory which may be non-fungible, such as by being custom manufactured, and therefore not easily sold on open exchanges if not purchased by the customer. Instead, the customer is bound by the agreements to purchase the inventory goods, increasing the likelihood of purchase of the inventory and providing recourse to the owner if the goods are not purchased. The use of a proximity hub, and the logistics agent to manage the hub, ensures that the particular handling needs of the high-risk inventory are met to minimize breakage or obsolescence, further maximizing the amount and value of the inventory sold by the owner.

Problems solved by technology

The combination of customer agreements and customized logistics services maximizes the value of the inventory, and particularly high-risk inventory such as electronic components, that are non-fungible, fragile, environmentally sensitive and prone to obsolescence, to both the owner entity and the manufacturer.

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