Analytics Engine for Supply Demand Matching

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Solution Overview

Problem

Traditional supply chain distribution models in project-based markets, such as Oil and Gas drilling, face inefficiencies due to complex forecasting, high inventory risks, and inflexible contractual agreements, leading to costly stockholding and disruptions in production schedules.

Innovation Solution

An analytics engine platform that predicts demand using early signals from project permits and construction plans, facilitating flexible demand and supply matching through micro-contracts between suppliers and operators, utilizing probabilistic demand events and deterministic purchase orders.

Engineering Contradictions & Design Principles

VSEngineering Contradiction Analysis

1Reliability

If traditional forecasting and inventory planning are used to fulfill demand, then service levels can be maintained, but inventory costs and obsolescence risks increase significantly

Engineering Contradiction:

Improveservice levelVSAvoidinventory quantity

Core Design Contradiction:

ReliabilityVSQuantity of substance

Solution Approach 1:

The system performs preliminary demand detection by monitoring early project signals (permits, plans, budgets) before actual purchase orders are placed. This allows suppliers to prepare and allocate inventory in advance based on predicted demand, reducing the need for large safety stocks while maintaining service levels.

Inventive Principle:

Principle #10Preliminary action

Solution Approach 2:

The system establishes continuous feedback loops between project developments and inventory planning. By tracking project milestones, permit approvals, and budget allocations, the system dynamically adjusts inventory recommendations, allowing firms to reduce inventory holdings while responding promptly to actual demand signals.

Inventive Principle:

Principle #23Feedback

2Reliability

If large amounts of inventory are held to meet demand, then service levels improve, but costs of storage, obsolescence, and deterioration increase

Engineering Contradiction:

Improveservice levelVSAvoidinventory carrying cost

Core Design Contradiction:

ReliabilityVSLoss of energy

Solution Approach 1:

Inventive Principle:

Principle #10Preliminary action

Solution Approach 2:

The system changes the parameters of demand prediction from traditional forecasting methods to early signal-based detection. By monitoring project-specific parameters (permit status, budget approval, construction timeline) rather than historical sales data, the system achieves more accurate demand timing predictions, reducing inventory carrying costs.

Inventive Principle:

Principle #35Parameter changes

3Ease of operation

If traditional reactive demand fulfillment is used, then operational simplicity is maintained, but production disruptions occur due to stockouts

Engineering Contradiction:

Improveoperational simplicityVSAvoidproduction continuity

Core Design Contradiction:

Ease of operationVSProductivity

Solution Approach 1:

Inventive Principle:

Principle #10Preliminary action

Solution Approach 2:

The system introduces an intermediary demand detection layer between project initiation and purchase order placement. This intermediary system analyzes early signals and generates demand predictions, bridging the gap between project planning and procurement execution, thereby preventing stockouts without complicating operations.

Inventive Principle:

Principle #24Intermediary (Mediator)

4Measurement precision

If information sharing between supply chain partners is increased to improve forecasting, then demand accuracy improves, but information security and confidentiality risks increase

Engineering Contradiction:

Improvedemand forecasting accuracyVSAvoidinformation security

Core Design Contradiction:

Measurement precisionVSLoss of information

Solution Approach 1:

The system extracts only the necessary early signals (permit approvals, project plans, budget allocations) from project data without requiring access to confidential commercial information. By focusing on publicly available or non-sensitive project milestones, the system achieves accurate demand prediction while maintaining information security.

Inventive Principle:

Principle #2Taking out (Extraction)

Solution Approach 2:

Inventive Principle:

Principle #24Intermediary (Mediator)

Data Source

PatentUS11521266B2Supply and demand matching within an exchange market for anticipative demand from early signals

Publication Date: 2022.12.06 HITACHI LTD

AI summary

Example implementations involve a mechanism of distribution of products and services, which may have early signals of demand when such products are consumed by project based activities. By offering flexible demand and supply matching, an analytics engine platform predicts such demand, and constructs micro-contracts to match suppliers with project operators, anticipating their demand needs. The mechanisms can be applied to distribution of any kind of products or services in a supply chain which demand arises by planned projects.