Personalized Inventory Transition Planning

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Solution Overview

Problem

Current inventory management systems fail to effectively balance inventory during product transitions due to unpredictable adoption rates and lack of personalized strategies, leading to unusable legacy inventory or excessive procurement costs, as they do not account for customer preferences and cannot integrate demand-side actions with supply planning.

Innovation Solution

A system and method that uses historical data to predict customer purchase preferences and adoption speeds, incorporating stochastic models to generate transition plans that optimize supply-side inventory levels and control new product adoption rates, incorporating personalized demand-shaping actions to balance inventory levels across customers.

Engineering Contradictions & Design Principles

VSEngineering Contradiction Analysis

1Quantity of substance

If managers underestimate the transition speed, then legacy inventory remains available longer, but unusable inventory accumulates

Engineering Contradiction:

Improvelegacy inventory availabilityVSAvoidunusable inventory

Core Design Contradiction:

Quantity of substanceVSLoss of substance

Solution Approach 1:

The system dynamically adjusts transition plans for different customer segments based on their adoption rates. Fast adopters receive accelerated transition recommendations while slow adopters receive extended legacy product availability, allowing the inventory management approach to adapt to varying customer behaviors rather than applying a static transition schedule to all customers

Inventive Principle:

Principle #15Dynamics

Solution Approach 2:

The system segments customers into different adoption rate categories (fast, medium, slow adopters) and applies customized transition strategies to each segment. This segmentation enables differentiated inventory allocation where legacy inventory is reserved for slow adopters while fast adopters are guided toward new products, preventing both inventory waste and stockouts

Inventive Principle:

Principle #1Segmentation

2Quantity of substance

If managers scale down product too quickly, then procurement costs decrease, but demand cannot be met and excessive procurement costs occur

Engineering Contradiction:

Improveinventory levelVSAvoidprocurement costs

Core Design Contradiction:

Quantity of substanceVSLoss of energy

Solution Approach 1:

The system performs preliminary actions by proactively guiding customers through transition plans before legacy inventory is depleted. By recommending new product adoption in advance and providing substitution options, the system ensures demand is met smoothly during the transition, avoiding last-minute procurement emergencies and excessive costs

Inventive Principle:

Principle #10Preliminary action

Solution Approach 2:

The system incorporates feedback loops that continuously monitor customer transition progress, adoption rates, and inventory levels. This feedback enables real-time adjustments to transition plans and procurement strategies, ensuring inventory levels are optimized to meet actual demand patterns while minimizing procurement costs

Inventive Principle:

Principle #23Feedback

3Device complexity

If traditional supply-side planning is used, then inventory decisions are simplified, but customer preferences and adoption patterns are not accounted for

Engineering Contradiction:

Improveplanning complexityVSAvoidcustomer preference information

Core Design Contradiction:

Device complexityVSLoss of information

Solution Approach 1:

The system changes key parameters by incorporating customer-specific adoption rates, preference scores, and transition timing into the planning process. Rather than using generic supply-side parameters alone, the system integrates customer behavioral parameters to generate personalized transition plans that account for individual customer preferences while maintaining manageable complexity through automated modeling

Inventive Principle:

Principle #35Parameter changes

4Speed

If demand-side actions are implemented, then customer transition is accelerated, but integration with supply planning is difficult

Engineering Contradiction:

Improveadoption speedVSAvoidsystem integration complexity

Core Design Contradiction:

SpeedVSDevice complexity

Solution Approach 1:

The system merges demand-side customer transition actions with supply-side inventory planning into a unified framework. By integrating customer adoption models, transition recommendations, and inventory optimization algorithms into a single system, the approach accelerates customer transition while simultaneously optimizing supply chain decisions, eliminating the need for separate complex integration interfaces

Inventive Principle:

Principle #5Merging (Combining)

Data Source

PatentUS10572890B2Balancing inventory by personalized transition planning

Publication Date: 2020.02.25 INTERNATIONAL BUSINESS MACHINE CORPORATION

AI summary

System, method and computer program product for effective supply-side planning of inventories during product transitions. The system for a supply-side entity that generates recommendations that include personalized shaping actions to control each customer's rate of adoption of a new product to replace an older legacy product during a transition period, and optimize overall use of available supply. The method optimizes personalized shaping actions so that a customer is transitioned at a speed that suits their personal profile as well as the seller's production/inventory constraints for each product. Shaping actions are determined based on the trajectory of each product's lifecycle. Further, customer-level adoption patterns for transitioning products are predicted from past behavior.