Electronic Supply Chain Finance Platform for Early Supplier Funding

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Solution Overview

Problem

Current supply chain finance systems are cumbersome and costly for suppliers, as they often require lengthy paperwork, high interest rates, and limited funding due to lack of direct access to buyers' accounts payable data, leading to inefficient cash flow management.

Innovation Solution

An electronic supply chain finance system that allows buyers, suppliers, and financial institutions to collaborate remotely, creating a negotiable instrument based on the buyer's payment obligation, enabling suppliers to receive funds early at discounted rates without incurring debt, by utilizing a computer-readable medium and processor to execute program instructions for receiving and processing payment information and creating electronic records.

Engineering Contradictions & Design Principles

VSEngineering Contradiction Analysis

1Ease of manufacture

If traditional supply chain finance systems are used, then suppliers can access funding, but the process is cumbersome and costly with lengthy paperwork and high interest rates

Engineering Contradiction:

Improveease of accessing fundingVSAvoidcomplexity of funding process

Core Design Contradiction:

Ease of manufactureVSDevice complexity

Solution Approach 1:

The patent replaces traditional mechanical paperwork-based supply chain finance systems with an electronic platform that automates document generation, submission, and processing. The system electronically creates negotiable instruments, manages correspondence, and coordinates between buyers, suppliers, and financial institutions, eliminating manual paperwork while maintaining the essential funding function.

Inventive Principle:

Principle #28Mechanics substitution (Replace mechanical system)

Solution Approach 2:

The patent introduces an electronic supply chain finance platform as an intermediary system that connects buyers, suppliers, and financial institutions. This platform mediates the entire funding process by receiving payment obligation information, generating negotiable instruments, managing correspondence, and coordinating fund disbursement, thereby simplifying access for suppliers while reducing overall process complexity through centralization.

Inventive Principle:

Principle #24Intermediary (Mediator)

2Quantity of substance

If suppliers use traditional financing methods, then they can obtain funds, but they face high interest rates and limited funding due to lack of direct access to buyers' accounts payable data

Engineering Contradiction:

Improveamount of funding availableVSAvoidaccess to buyer payment data

Core Design Contradiction:

Quantity of substanceVSLoss of information

Solution Approach 1:

The patent implements a feedback mechanism where the electronic platform receives payment obligation information directly from buyers' accounts payable systems. This feedback loop provides suppliers and financial institutions with real-time access to accurate payment data, enabling better funding decisions and increasing the quantity of available funding based on actual buyer payment capacity rather than supplier credit alone.

Inventive Principle:

Principle #23Feedback

Solution Approach 2:

The electronic platform serves multiple functions: it acts as an information repository for buyer payment obligations, a generation system for negotiable instruments, a correspondence management system, and a coordination hub for fund disbursement. This multi-functionality consolidates previously separate processes, giving all parties direct access to necessary information and increasing overall funding availability.

Inventive Principle:

Principle #6Universality (Multi-functionality)

3Reliability

If suppliers negotiate instruments based on buyer credit strength, then funding is more secure, but the process takes longer and increases order-to-cash cycle costs

Engineering Contradiction:

Improvesecurity of fundingVSAvoidtime for negotiation and processing

Core Design Contradiction:

ReliabilityVSLoss of time

Solution Approach 1:

The patent implements preliminary action by having buyers pre-establish payment obligations in the electronic platform before suppliers need funding. The system pre-generates negotiable instruments based on these pre-recorded obligations, so when suppliers need funding, the negotiation process is already prepared and can proceed quickly. This preliminary setup maintains funding security through pre-validated buyer credit while dramatically reducing negotiation time.

Inventive Principle:

Principle #10Preliminary action

Solution Approach 2:

The patent replaces manual negotiation and processing mechanics with automated electronic systems that instantly generate and transfer negotiable instruments. The electronic platform automatically processes funding requests, generates appropriate instruments based on pre-validated buyer obligations, and coordinates disbursement, maintaining security through system-enforced validation while eliminating time-consuming manual procedures.

Inventive Principle:

Principle #28Mechanics substitution (Replace mechanical system)

Data Source

PatentUS12100042B2Supply chain finance system

Publication Date: 2024.09.24 PRIMEREVENUE INC

AI summary

In an electronic supply chain finance system, a method of enabling a supplier to obtain funds includes receiving information from a buyer defining a payment obligation, receiving an offer to sell the payment obligation, and providing electronic instructions to print a negotiable instrument issued by the buyer, to the supplier as payee, having a payable date based on a maturity date of the payment obligation and a payment value based on a payment amount of the payment obligation.