Supply Chain Financial Orchestration System
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Solution Overview
Problem
Current ERP systems are inadequate in accurately tracking and accounting for internal trades within multinational companies, as they often fail to separate trade events from physical inventory transactions and struggle to establish a true cost structure for trade events, leading to inaccurate reporting and increased complexity in managing internal transactions across different tax regimes.
Innovation Solution
A supply chain financial orchestration system that processes trade events independently of physical inventory transactions, generating trade accounting events and sending them to a cost accounting system for separate accounting, while also enabling the configuration of transfer pricing rules and accounting templates to accurately track costs and mark-ups across the supply chain.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Device complexity
If ERP systems integrate trade events with physical inventory transactions, then system complexity is reduced, but measurement precision of trade events deteriorates
Solution Approach 1:
The patent segments trade events from physical inventory transactions by creating separate event types and processing flows. Trade events are handled through dedicated trade event queues and processed by specialized trade event handlers, while physical inventory transactions follow separate workflows. This segmentation enables independent tracking and accounting of trade events, improving measurement precision without requiring complete system integration.
2Ease of operation
If ERP systems use unified accounting for all transactions, then ease of operation is improved, but manufacturing precision of cost accounting deteriorates
Solution Approach 1:
The patent implements local quality by applying different accounting treatments to different event types within the same system. Trade events receive specialized cost accounting with transfer pricing rules, mark-up configurations, and inter-company accounting treatments, while physical inventory transactions use standard costing methods. This localized specialization enables precise cost accounting for trade events without compromising overall system ease of operation.
3Productivity
If ERP systems process internal trades without separation, then productivity is maintained, but reliability of tax compliance deteriorates
Solution Approach 1:
The patent introduces an intermediary trade event processing layer that sits between transaction initiation and final accounting. This intermediary layer captures trade-specific information, applies transfer pricing rules, and generates separate accounting entries for inter-company and intra-company trades. By inserting this intermediary processing step, the system maintains high productivity through automated workflows while improving tax compliance reliability through accurate, separated trade accounting.
Data Source
AI summary
A system is provided that processes supply chain events. The system defines a supply chain event type. The system further configures a supply chain event of the supply chain event type as a task generating event, where the task generating event indicates that one or more tasks that are defined for a supply chain financial orchestration flow are to be executed, and where the supply chain financial orchestration flow defines a trade relationship between a first entity and a second entity. The system further receives a supply chain event associated with the supply chain financial orchestration flow. The system further determines whether the supply chain event is a task generating event. The system further executes the one or more tasks that are defined for the supply chain financial orchestration flow where the supply chain event is a task generating event.