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

The present invention is a system and method for managing supply chain and inventory risks for a manufacturer that sells inventory to multiple customers. The system includes an owner entity that takes title to the inventory from the manufacturer and uses customer agreements to determine the amount and timing of inventory purchases. The owner entity also has a logistics agent to manage the distribution of the inventory to customers. The system helps to increase the certainty of inventory sales and maximize the value of the inventory, especially for high-risk inventory that is non-fungible and prone to damage or obsolescence. The use of a hub in geographical proximity to the customer makes the supply chain more efficient and helps to manage visibility of the supply chain. Overall, the system helps to manage inventory risks and provide better sales and profitability for the manufacturer.

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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