Inventory Management System with Unit Code Tracking for Supply Chain Transactions
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Solution Overview
Problem
In supply chain management, retailers face challenges in balancing inventory costs with customer demand, leading to cash flow issues and financial risks due to upfront payments for product procurement, and there is a need for efficient inventory tracking and transaction management between suppliers and merchants.
Innovation Solution
An inventory management system that generates unique machine-readable unit codes for products, allowing automatic transactions between suppliers and merchants based on scanning these codes at various stages of the supply chain, facilitating procurement and sales processes while reducing financial burdens on retailers.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Quantity of substance
If the merchant purchases units of goods from the supplier at wholesale prices with upfront payments, then the merchant secures inventory for sale, but the merchant's cash flow is negatively impacted and financial risk increases
Solution Approach 1:
The system performs preliminary actions by automatically executing transactions at defined supply chain events (stocking, shipping, selling) rather than requiring upfront merchant payment. The supplier is compensated progressively as goods move through the chain, with the merchant's financial obligation tied to actual inventory movement and sales performance.
Solution Approach 2:
The inventory management system acts as an intermediary that automates and manages the financial transactions between merchant and supplier. It mediates the payment process by automatically deducting and transferring funds based on scanned unit codes and predefined transaction rules, removing the need for traditional upfront merchant payments.
2Loss of energy
If the merchant purchases units of goods from the supplier with extension of credit, then the merchant's cash flow is preserved, but the supplier's credit risk increases
Solution Approach 1:
The system implements continuous feedback through automatic scanning and tracking of unit codes throughout the supply chain. This real-time visibility allows the system to monitor inventory movement, verify sales, and automatically trigger payments to the supplier, ensuring the merchant fulfills financial obligations without requiring traditional credit extensions.
Solution Approach 2:
The automated transaction system performs self-service by automatically calculating, deducting, and transferring payments based on predefined rules and actual inventory events. This eliminates the need for credit agreements and manual payment tracking, with the system autonomously ensuring the supplier receives compensation for goods that have been stock ed, shipped, or sold.
3Loss of energy
If the merchant manages inventory with consignment arrangement, then the upfront financial burden is reduced, but the supplier needs to trust the merchant to sell goods efficiently and handle them properly
Solution Approach 1:
The system replaces the trust-based mechanical relationship between supplier and merchant with an automated digital system. Unit codes provide unique identification and tracking for each product unit, enabling automatic verification of inventory status, movement, and sales without requiring interpersonal trust. The automated transaction execution ensures fair compensation for the supplier regardless of merchant performance.
Solution Approach 2:
The inventory management system serves as an impartial intermediary that objectively tracks and verifies inventory events through scanning and data collection. It mediates the relationship by providing transparent, tamper-evident records of inventory status and automatically executing transactions based on verified events, removing the need for subjective trust between parties.
4Productivity
If the merchant stocks more inventory to meet customer demand, then customer service level improves, but the stocking costs increase
Solution Approach 1:
The system enables dynamic inventory management where the merchant's financial obligation adjusts automatically based on actual inventory events. As goods are stocked, shipped, or sold (tracked via unit code scanning), transactions are automatically triggered, allowing the merchant to maintain higher inventory levels without proportionally increasing upfront financial commitment. The cost structure dynamically adapts to actual inventory movement and sales performance.
Data Source
AI summary
Examples provide methods for managing inventory exchanges between suppliers and merchants. The method includes transmitting a unit code associated with a unit of product to a supplier, where the unit code is a machine-readable image that embeds a unit identifier (ID) allocated to individual units of product; receiving a message that includes the unit ID having been extracted from the unit code by a first scanning device; automatically performing a procurement transaction from the merchant to the supplier for a stocking price, being a first portion of a wholesale price associated with the unit of product; receiving, from the merchant upon detection of a retail sale of the unit of product, a sale message that includes the unit ID; and automatically performing a supplier share transaction from the merchant to the supplier for a remainder price, the remainder price being a second portion of the wholesale price.