Patent Application
20050071207
1. Field of the Invention
This invention relates to a synchronized supply chain management network.
2. Related Art
OEM's (original equipment manufacturers) typically outsource production of their products, or components thereof. OEM's often rely on multiple such suppliers when sourcing components for their products. Known techniques for sourcing of parts include making arrangements with a first tier of suppliers. This first tier suppliers, and later tier suppliers (as described below), procure parts and materials to support the OEM's requirements. For example, the first tier suppliers might engage a second tier of suppliers to produce the design to the OEM's specification. The OEM would obtain its parts supply from first tier suppliers, who have agreed to price and other supply contract terms with the OEM. The first tier suppliers obtain their own parts for manufacture from a second set of second tier suppliers, whom in turn obtain their own parts for manufacture from third tier suppliers, and the like.
A first problem of these known techniques is that OEM's must rely on their first tier suppliers, and on their later tier suppliers, for the ability to timely purchase materials and manufacture components. If any supplier in the supply chain fails to timely purchase materials and manufacture components that form their part of the ultimate product, delivery of product to the OEM for the OEM to sell can be substantially adversely affected. Thus, the OEM does not have the ability to monitor demand and committed responses through the multiple tiers (that is, between first tier suppliers and later tier suppliers) of an extended supply chain.
A second problem of these known techniques is that OEM's are liable to their suppliers for components the OEM's request, even if demand or other market conditions change for the OEM. This has the effect that OEM's often must account (in their orders, and in their forecasts given to suppliers) for possible changes in demand or other market conditions, and often are unable to react sufficiently quickly to such changes to avoid adverse economic effect.
A third problem of these known techniques is that while OEM's have a contractual relationship with their first tier suppliers, and while that contractual relationship might specify constraints imposed on later tier suppliers, OEM's do not in general have a substantially reliable way to ensure that those constraints are in fact being followed. For example, OEM's do not in general have a substantially reliable way to ensure that prices reported to them by their first tier suppliers are accurate, or that discounts negotiated by the OEM's with later tier suppliers (such as for example if the OEM knows that its first tier suppliers buy in substantial bulk from a designated second tier supplier) are in fact applied, or that other terms or conditions the OEM desires to impose are in fact followed. Thus, the OEM does not have reliable information about pricing, source, or availability actually obtained by first tier or later tier suppliers. For just one example, the OEM does not know if its first tier suppliers accurately quote their own costs, with the effect that the OEM does not know if it can manufacture product at a lower cost.
One known method is to build a synchronized supply chain management network to manage communications between the OEM and its first tier suppliers. In systems using such methods, demand signals and supply signals are exchanged between automated systems at the OEM and at the first tier suppliers respectively, with the effect of providing greater automaton between the OEM and its first tier suppliers, and with the effect of providing the OEM with better data regarding its first tier supplier's operations. However, while this known method generally allows the OEM to review and process data from its first tier suppliers, it substantially fails to achieve several goals that would be advantageous to the OEM. For a first example, not intended to be limiting in any way, the OEM is not able with known methods to obtain relevant information regarding about parts sourcing for parts in the OEM's product that are not directly available from its first tier suppliers. For a second example, not intended to be limiting in any way, the OEM is not able with known methods to obtain visibility of relevant information from second tier and later tier suppliers.
The OEM also does not have reliable information about parts sourcing conditions for its first tier suppliers (or for its second tier suppliers or later tier suppliers). If circumstances change at the OEM, the OEM does not have a substantially reliable method for making the change of circumstances timely known to parts suppliers further down the supply chain. For one example, not intended to be limiting in any way, if the OEM places an order with its first tier suppliers, it will be substantially committed to that order, even in the event that the OEM no longer needs those parts. If the OEM had substantially greater visibility into operations of its second tier suppliers and later tier suppliers, it might be able to send information with sufficient alacrity that those later tier suppliers would not deliver parts (or raw materials) unnecessarily, with the effect that the OEM would obtain substantially greater flexibility with regard to order commitment. Otherwise, the OEM has to account, when placing orders to its first tier suppliers, for the possibility that it is requesting more parts than it will end up actually needing.
The OEM also lacks information transparency in the supply chain. As communications, such as purchase orders and supply commitments, are transferred through the supply chain, there is no substantially convenient repository for translation among these communications. In addition, there is no substantially convenient way of cross-referencing communications as they traverse the supply chain. The information flow for these purchase orders and supply commitments, and any cross-referencing communications, can often be quite complicated. For example, not intended to be limiting in any way, if a first tier supplier receives an order for part P from an OEM, that first tier supplier might need to order that part from a second tier supplier. The first tier supplier might aggregate that order with other orders received for the same part and/or from other OEMs. The first tier supplier might alternatively break that order up into multiple orders to the same or different second tier suppliers. In turn each second tier supplier might perform the same techniques, and the like, where each supplier in the supply chain is motivated to maximize its own profitability, possibly at the OEM's expense. This has the effect of making data collection difficult, and the effect that constructing an aggregated view of the supply chain can be difficult.
The invention includes a method and system that a business entity (such as for example an OEM or a manufacturer, or a similar entity), at the head of a supply chain, can use to review aggregate information about supply conditions for parts procured by multiple tiers of suppliers, on behalf of the head of the supply chain. This method and system are capable of maintaining, on behalf of the head of the supply chain, an order collaboration system for an extended supply chain that incorporates data for multiple tiers of suppliers. In the order collaboration system, the head of the supply chain can view and analyze up-to-date supply chain conditions. Supported supply chain conditions can include, but are not limited to, price, source, availability, delivery schedules, backorders, supply interruptions, and possible exceptional events in the supply chain.
This has the effect that problems arising out of lack of visibility by the head of the supply chain for its suppliers “downstream” (as defined below) in the supply chain (that is, ultimately sources to the business entity collecting and analyzing the information) can be recognized and ameliorated by the head of the supply chain, either by the head of the supply chain taking direct action or by the head of the supply chain instructing its suppliers downstream in the supply chain to take certain actions. These problems, as described above, include (1) mismatches between supply and demand such as inadequate supply, which can have a substantial effect on revenue, (2) excess supply, sometimes caused by order changes, and which can have a substantial liability impact on the head of the supply chain, and (3) compliance by suppliers with contractual obligations, such as for example, where suppliers themselves source their parts from and whether they are truthful about the margins they report to the head of the supply chain.
In an aspect of the invention, a head of the supply chain or an nth tier supplier in the supply chain can (for suppliers downstream in the supply chain) collect and analyze information regarding supply chain performance of multiple tiers of suppliers, including costs, ship dates, and the like. Performance analysis can include an evaluation of how a selected supplier performed with regard to price adjustments, a performance assessment of a selected supplier with regard to promised supply amounts or delivery schedules, whether the selected supplier has had an unusual number of quality defects, or whether there have been an unusual number of supply chain exceptions for that supplier. Supply chain exceptions can include, but are not limited to, approval of price variances and the like and revoking or changing manufacturing forecasts.
In an aspect of the invention, a head of the supply chain or an nth tier supplier in the supply chain can obtain from the system a dictionary of translations of transitive information in the supply chain. For example, this aspect of the invention can produce a translation among part numbers used in each tier of the supply chain per order or per part. These dictionaries are useful for cross-tier communication, exception handling, discussion of adherence to contract terms, as well as other aspects of supply-chain operation.
In an aspect of the invention, the head of the supply chain or an nth tier supplier in the supply chain can (for suppliers downstream in the supply chain) aggregate information concerning multiple products, thus providing the ability to review aggregated supply chain conditions for the extended supply chain for an enterprise. The head of the supply chain is included in or integrated with, for all suppliers downstream in the supply chain. The head of the supply chain can obtain supply chain information from which it can determine, for each part used in any one of a set of multiple products, a set of supply chain information aggregated over the entire enterprise.
In an aspect of the invention, a design engineer (working at or with the head of the supply chain) can obtain feedback information for its design process in response to supply chain performance. Design process feedback information can pertain to selected preferred parts, selected preferred suppliers (at one or more of the multiple tiers), and the like. The design process feedback info can include, but is not limited to, price for potentially used or planned parts and part availability. For example, the head of the supply chain, in response to aggregated information, can determine those parts with the best price, have a high assurance of availability, or those that do not require new approval for use, (and not just a technical fit), thus eliminating a source of otherwise additional cost and delay.
In an aspect of the invention, the head of the supply chain can review and ensure compliance with contract terms between the head of the supply chain and its suppliers. For example, where the head of the supply chain has required its first tier suppliers to obtain parts under selected contract conditions the head of the supply chain can determine from examination of information maintained by the order collaboration system whether second tier (or later tier) suppliers are complying with those conditions, or whether those conditions are in fact being observed. Supported contract term compliance can include delivery price, delivery quantity (and price-quantity breakpoints), terms for parts returns, delivery methods, and the like.
In an aspect of the invention, a head of the supply chain can direct its first tier and later tier suppliers in the supply chain to allocate parts that are in relatively short supply, or otherwise resource-limited, to particular projects among all of the projects in which the head of the supply chain is engaged with the suppliers. For example, the head of the supply chain can direct downstream parts suppliers (as defined below) to allocate scarce or expensive parts for those elements (such as for example, a particular component) that the head of the supply chain deems to be relatively high priority, rather than those elements the head of the supply chain deems to be relatively low priority.
Inventions described herein can be used in conjunction with technology described in the following documents:
These documents are hereby incorporated by reference as if fully set forth herein, and are sometimes referred to herein as the “Incorporated Disclosures”.
The description herein includes a preferred embodiment of the invention, including preferred data structures and process steps. Those skilled in the art would realize after perusal of this application, that embodiments of the invention might be implemented using a variety of other techniques not necessarily specifically described herein, without undue experimentation or further invention, and that such other techniques would be within the concept, scope, and spirit of the invention.
Lexicography
The following terms relate or refer to aspects of the invention or its embodiments. The general meaning of each of these terms is intended to be illustrative and in no way limiting.
The scope and spirit of the invention is not limited by any of these definitions, or by any specific examples mentioned therein, but is intended to include the most general concepts embodied by these and other terms.
System Elements
A system 100 includes a hub 110, a set of first tier supplier facilities 130.1, a set of second tier supplier facilities 130.2, a set of Nth tier supplier facilities 130.N, where N is an integer greater than zero and 130.N represents that Nth tier supplier, and at least one OEM or other manufacturing facility 150. Communication between the hub 110 and the set of first tier supplier facilities 130.1, later tier supplier facilities 130.N, and OEM or other manufacturing facility 150 is conducted by way of a communications network 160 (not shown).
Hub and Spoke Model
The hub can be either a single entity or a multi-hub system acting as a single hub as described in the Incorporated Disclosures. An aspect of the hub 110 is a web site dedicated to supply chain management, collaborative design and managing product lifecycle business processes. The hub 110 also includes a database 116 and an order collaboration system 118. These latter elements are further described in
In one embodiment, the OEM 150 includes a computer or electronics manufacturer. The first tier suppliers 130.1 produce parts and components used by the OEM 150 and can include one or more contract manufacturers or EMS (external manufacturing service) that manufactures goods on behalf of the OEM 150. The later tier suppliers 130.N include suppliers of parts or components used by the first tier supplier 130.1 or by a later tier supplier 130.N that is closer in the supply chain to the OEM 150. In other embodiments, the OEM 150, first tier supplier 130.1 and later tier suppliers 130.N may represent a different manufacturing industry such as automobile or aircraft manufacturers.
Every tier of suppliers 130.N include at least one workstation 132 and a database 134. The workstation 132 is used to initiate and receive communications from the hub 110. These communications include messages to the hub 110 or messages to a later tier supplier 130.N, an earlier tier supplier 130.N, or to the OEM 150 that are directed to the intended recipient by way of the hub 110. The database 134 includes information that is used to update information in database 116. This information is described in detail below.
Each OEM 150 includes at least one workstation 152 and a database 154. The functionality of workstation 152 and database 154 is similar to the functionality of workstation 132 and database 134. However, communications from the workstation 152 include messages to the hub 110 or messages to a first tier supplier 130.1 or a later tier supplier 130.N that are directed to the intended recipient by way of the hub 110 or directly to the recipient with a copy sent to the hub. The database 154 includes information that is used to update information in the database 116.
The elements of a system 100 may be viewed as a hub and spoke model, in which the hub 110 is at the center of the model and the first tier supplier facilities (including the EMS facility) 130.1 and later tier supplier facilities 130.N and at least one OEM or other manufacturing facility 150 form the spokes of the model. Other spokes included in the hub and spoke model are distributors, fulfillment centers and other entities involved with servicing the supply chain. Other embodiments of the system 100 may be configured differently, however. For example, the services provided by the hub 110 may be implemented on the client side. In such embodiments, communication flows directly between from the OEM 150, first tier suppliers 130 and later tier suppliers 140 and is not mediated by the hub 110. In such an embodiment, in order to take advantage of the ability of the hub 110 to aggregate the shared state of the supply chain, a copy of the communication would be sent to the hub 110. Additionally, the hub may be implemented as a multi-hub system with the multiple hubs acting as a single hub. This is described in more detail in the Incorporated Disclosures.
The hub 110, the OEM(s) 150, the first tier supplier(s) 130.1 and later tier supplier(s) 130.N are coupled using a communication network 160. In a preferred embodiment, the communication network 160 includes a computer communication network, such as the Internet. However, in alternative embodiments, the communication network 160 might include an intranet, extranet, VPN (virtual private network), ATM system, a portion of a private or public PSTN (public switched telephone network), a frame relay system, or any other communication technique capable of performing the functions described herein.
Hub Architecture
The hub 110 includes one or more servers 112, a set of portals 114, a database 116 and an order collaboration system 118.
Each of the one or more servers 112 includes a processor, program and data memory, and operates under control of software to perform the tasks described herein. The server 112 is capable of using a message transfer protocol, such as HTTP, FTP, or a variant thereof, to send and receive information to and from the set of first tier supplier facilities (including the EMS facility) 130.1 and later tier supplier facilities 130.N and at least one OEM or other manufacturing facility 150 and transmit responses and various notifications thereto. In a preferred embodiment, the server 112 uses a version of HTTP, SHTTP or at least some features thereof.
The set of portals 114 include at least one portal 114 for each first tier supplier facility 130.1, later tier supplier facility 130.N, and OEM or other manufacturing facility 150. In some embodiments, each entity has a single portal 114. In other embodiments, different divisions of a single entity may each have their own associated portal 114. These portals 114 include a software element for receiving, parsing, translating, sending and generating information received by the entity associated with the portal 114 into a form such that the information can be aggregated or manipulated by the order collaboration system 118. The reverse process also occurs: the portals 114 can also convert information from a standardized format such as used by the order collaboration system 118 into a format that is easily apprehensible by the recipient of the information. While these portals are logically distinct, multiple or all of the portals could be the same portal. In such an embodiment, the portal would determine the identity of each sender. Therefore, a single portal could be used for multiple by one or more OEM(s) 150, first and later tier supplier(s) 130.N.
The database 116 is coupled to the server 112, either in the main memory of the server 112 or in a logically remote location. In one embodiment, the database 116 may be a relational or object oriented database. The database 116 includes data from the first tier supplier facilities (including the EMS facility) 130.1, later tier supplier facilities 130.N and at least one OEM or other manufacturing facility 150. This data includes at least some of the following:
Portions of this information may be private or public, depending upon preferences set by the party that “owns” the information. In many instances, the owner of the information is the party most closely linked to the OEM (or the OEM itself); however in other instances, the owner of the information is the party to whom the information pertains (for example, credit information). Furthermore, some of the information owned by a particular entity may be public to certain defined parties, whereas the balance of the information may be public to everyone or completely private (for example, information is public to an OEM is not necessarily public to other entities in the supply chain). Regardless whether particular information in the database 116 is designated public or private, the information is visible to the order collaboration system 118.
The order collaboration system 118 includes software modules that manipulate information stored in the database 116 to perform various functions involving determination of costs, allocation of parts, evaluations of entities in a supply chain and similar tasks on behalf of an OEM or other manufacturing entity 150. These software modules include elements for generating and receiving messages 120, (including demand messages and supply signal messages), an aggregating module 122, and a reporting module 124 for generating reports.
The elements for generating and receiving messages 120 include at least one software element for processing demand messages (such as demands for a particular product or requests for information), supply messages (such as an indication that a product is available) and special messages requesting that data be aggregated or summarized.
The aggregating module 122 compares and aggregates different types of information relating to at least some of the following:
In a preferred embodiment, the aggregating module 122 aggregates and manipulates information based upon different preferences set by the OEM or other manufacturing facility 150, by first tier suppliers 130.1, or later tier suppliers 130.N.
In a preferred embodiment, the brokering module 126 determines from the aggregating module 122 where there is a dearth or a surplus of a certain part or product. The brokering module 126 then looks for matching pairs of death and surplus within brokering groups and attempts to broker a deal. Entities can choose whether to participate in the brokered deal. A fee may be charged for brokering the deal. If the brokered deal is not accepted by the entities, the brokering module will look for other deals to broker on that part and other parts.
In a preferred embodiment, the brokering module 126 can adopt any strategy to match dearth and surplus. These strategies can include, but are not limited to:
In a preferred embodiment, brokering groups are lists of suppliers, manufacturers, other brokering groups, and other entities that wish to speculate on trade within that group. They are stored within the memory of the brokering module 126 or in the memory of any entity or module within the hub 110 or outside the hub 110 to which the brokering module 126 has access. Brokering groups contain zero or more entities. A single entity can participate in zero or more brokering groups. A brokering group will typically be opt-in. That is, entities will choose to participate in the brokering group. It is also possible that entities will be assigned to brokering groups. For example, all entities in an extended supply-chain may be assigned to a single brokering group if legal and appropriate. In any case, an entity can always choose to opt-out of a brokering group in which it is participating. The members of a brokering group can be within a single extended supply chain or can be between extended supply chains.
The aggregating module 122 generates statistical values corresponding to aggregates such as price, volume and other aspects of the information so as to comply with a particular request from an OEM 150 for a particular report. The reporting module 124 receives data from the aggregating module and uses this data to generate reports for an OEM 150. The aggregated information is submitted to a reporting module 124 that generates a report on behalf of the OEM 150 or Nth tier supplier 130.N. These reports involve at least some of the following:
These reports provide the OEM or other manufacturing facility 150 with reliable information about pricing and profits margins actually obtained by the EMS. This information can be used assist the OEM in better evaluating the feasibility of manufacturing the product at a lower cost, a different volume or for a different shipping time.
In other embodiments, reports can be provided to a first tier supplier 130.1 or a later tier supplier 130.N. In such embodiments, data from multiple first tier suppliers 130.1, later tier suppliers 130.N and an OEM 150 is aggregated and summarized. However, the reports generated on behalf of a first tier supplier 130.1 or later tier supplier 130.N are different in substance from the ones generated on behalf of an OEM 150. For example, reports generated on behalf of a first tier supplier 130.1 or a later tier supplier 130.N involve any of the following:
The reports described above can be used by first tier suppliers 130.1 and later tier suppliers 130.N to aid in dealing with sourcing issues related design collaboration.
Hub Communication
A hub 110 is used to process communication between an OEM or other manufacturer 150 to multiple first tier suppliers 130.1, between the first tier suppliers 130.1 and second tier suppliers 130.2, and between second tier suppliers 130.2 and third tier suppliers 130.3. The diagram and system described are intended to be in no way limiting, but instead represent an uncomplicated system with enough detail to describe the communication and data collection process. Alternative embodiments could include more or fewer tiers of suppliers, more or fewer suppliers per tier, more manufacturers 150.
All communications among the OEM 150 and suppliers 130.N are routed through the hub 110. The hub maintains a copy of all communication among entities in its database 116. The copy of the communication can be of the full message sent or can be a subset of the information based on the legal arrangement among the OEM 150 and the suppliers 130.N. At minimum, the copy of the communication must maintain data related to the fields for which people will build or will want to build dictionaries of cross-tier translation. Some common examples of information for which it will be useful to build such dictionaries are: part number mapping, purchase order number mapping, advanced ship notice number mapping, and invoice number mapping.
The dictionary of cross tier translation is created by building tables of cross-referenced data from corresponding messages between the OEM 150 and a first tier supplier 130.1 or between and two Nth tier suppliers 130.N. The cross-reference is identified in the hub 110 by identifying a token placed in each message so that the hub can identify which previous message is the causal antecedent of a given one. This token can be, but is not limited to, a number generated by the hub 110 and then included by the OEM 150 or Nth tier supplier 130.N, the incoming purchase order number, part number, invoice number, advanced ship notice number, or any other number that can uniquely identify the causal antecedent of the message.
Once the causal antecedent for the message is identified, the hub 110 can determine the cross-tier information from the two messages. From multiple of these relationships, the aggregating module 122 can determine the transitive relationship, across the supply chain, of any information passed and translated among the entities in the supply chain.
The reporting module 124 can report these dictionaries when interested entities access the order collaboration system 118.
Method of Operation
A method 300 includes a set of flow points and process steps as described herein using a system 100, including the hub 110, the first tier suppliers 130.1, the later tier suppliers 130.N, the OEM 150 and the communications network 160.
Although by the nature of textual description, the flow points and process steps are described sequentially, there is no particular requirement that the flow points or process steps must be sequential. Rather, in various embodiments of the invention, the described flow points and process steps can be performed in a parallel or pipelined manner, either by one device performing multitasking or multithreading, or by a plurality of devices operating in a cooperative manner. Parallel and pipelined operations are known in the art of computer science.
In a flow point 305, the system 100 is ready to begin. The first tier suppliers 130.1 and later tier suppliers 130.N have stored inventory and pricing information in the database 116.
In a step 310, an OEM 150 makes an inquiry. The inquiry may involve any of the following:
The inquiry is made by contacting the hub 110 using the communications network 160. The OEM 150 interacts with the element for generating and receiving messages 120. The inquiry is parsed and passed on to the aggregating module 122.
In a step 315, the aggregating module 122 determines what data is necessary to answer the inquiry and how that data should be aggregated to provide an answer. The data in question involves price, inventory, and shipping information pertaining to one or more past designs or one or more prospective designs or some combination of past and prospective designs. This data may include (1) current data from multiple suppliers across multiple supply chains and (2) data from past or ongoing transactions.
In a step 320, the aggregating module 122 aggregates the data and presents it to the reporting module 124.
In a step 325, the reporting module 124 generates a report that is responsive to the original inquiry and presents the report to the OEM 150 by way of the portals 114. As noted earlier, these reports concern at least some of the following:
These reports provides the OEM or other manufacturing facility 150 with reliable information about pricing and profits margins actually obtained by Nth tier suppliers 130.N such as an EMS. The OEM 150 can better evaluate the feasibility of manufacturing the product at a lower cost, a different volume or for different shipping times.
In a step 330, a copy of the report is stored in the database 116 where the OEM 150 can access it. If necessary inventory levels in the database 116 are adjusted at this time to reflect changing conditions.
In other embodiments, a variant of the method 300 can also be performed on behalf of a first tier supplier 130.1 or a later tier supplier 130.N. In such embodiments, the first tier supplier 130.1 or the later tier supplier 130.N makes the original inquiry. Reports are generated and transmitted to the first tier supplier 130.1 or later tier supplier 130.N. Such reports can be particular useful when preparing bids, determining the most economically feasible way to manufacture a particular component and other comparable activities.
Although preferred embodiments are disclosed herein, many variations are possible which remain within the concept, scope, and spirit of the invention. These variations would become clear to those skilled in the art after perusal of this application.
Those skilled in the art will recognize, after perusal of this application, that these alternative embodiments are illustrative and in no way limiting.
