Purchasing optimization system

• US 20050119900A1
• Filed: 06/12/2002
• Published: 06/02/2005
• Est. Priority Date: 06/12/2002
• Status: Active Grant

• Current Assignee: Jeffrey Eder
• Original Assignee: Asset Trust, Inc.
• Inventors: Eder, Jeff Scott
• Granted Patent: US 7,970,640 B2
• Time in Patent Office: Days
• US Class Current: 705/10
• CPC Class Codes: G06Q 10/0635 Risk analysis of enterprise or organisation activities
• CPC Class Codes: G06Q 10/10 Office automation; Time management

Abstract

An automated system (100) and method for optimizing purchasing activity from the perspective of the buyer. The purchasing activity features and resources are defined using purchasing system data. The suppliers and deliverables are then mapped to one or more frames within the Market Value Matrix™ System for the Buyer. The system then identifies the mix of features and resources that maximize the expected value from purchasing activity from the different Buyer frames.

Claims

1. A purchasing method, comprising:

obtaining purchasing feature data and context for an organization;

defining a simulation model using said context and data; and

using said model to determine the set of purchasing features that optimize one or more aspects of financial performance for said organization.

2. The method of claim 1 where purchasing features encapsulate all the options the purchasing manager has for acquiring deliverables.

3. The method of claim 2 where resources are a subset of features that comprise the different suppliers that can provide deliverables.

4. The method of claim 1 where the organization is a single product, a group of products, a division, a company, a multi-company corporation, a value chain or a collaboration.

5. The method of claim 1 where context includes information from the group consisting of administrative context, strategic business context and combinations thereof.

6. The method of claim 5 where administrative context is defined by the existing delivery commitments, purchase requirements, inventory and purchases.

7. The method of claim 5 where the strategic business context is defined by the organization segments of value, elements of value, risks and external factors that will be affected by the purchasing feature selection.

8. The method of claim 7 where the organization segments of value are current operations, derivatives, investments, market sentiment, real options and combinations thereof.

9. The method of claim 7 where the organization risks are from the group consisting of element variability risks, external factor variability risks, contingent liabilities, strategic risks, market volatility risks, event risks and combinations thereof.

10. The method of claim 7 where the organization elements of value are from the group consisting of alliances, brands, channels, customers, customer relationships, employees, equipment, knowledge, intellectual property, investors, partnerships, processes, quality, vendors, vendor relationships, visitors and combinations thereof.

11. The method of claim 7 where the external factors are from the group consisting of numerical indicators of conditions external to the organization, numerical indications of prices external to the organization, numerical indications of organization conditions compared to external expectations of organization condition, numerical indications of the organization performance compared to external expectations of organization performance and combinations thereof.

12. The method of claim 7 where identifying the segments of value, elements of value, risks and external factors that will be affected by the purchasing feature selection further comprises:

obtaining an xml schema for the organization market value matrix, and

mapping purchasing features to the market value matrix using said schema.

13. The method of claim 7 further comprising the use of data from a simulation system to define context.

14. The method of claim 1 that optionally displays the impact of the purchasing the optimized feature set on the position of the organization relative to the efficient frontier.

15. The method of claim 1 where the method further comprises displaying the organization value and the optimal set of features using a paper document or electronic display.

16. The method of claim 1 where the simulation model is the organization market value matrix or a separate model.

17. The method of claim 1 where the context data is obtained from a web service, operating system layer or operating system extension.

18. The method of claim 1 where the one or more aspects of organization financial performance are selected from the group consisting of alliance risk, brand risk, channel risk, content risk, contingent liabilities, customer risk, customer relationship risk, current operation risk, derivative risk, employee risk, employee relationship risk, energy risk, enterprise risk, external factor risk, event risk, fraud risk, information technology risk, intellectual property risk, investment risk, knowledge risk, market sentiment risk, market risk, market volatility, organization risk, partnership risk, process risk, production equipment risk, product risk, real option risk, technology risk, total risk, vendor risk, vendor relationship risk, weather risk, alliance return, brand return, channel return, content return, contingent liabilities, customer return, customer relationship return, current operation return, derivative return, employee return, employee relationship return, enterprise return, external factor return, event return, information technology return, intellectual property return, investment return, knowledge return, market sentiment return, market return, market volatility, organization return, partnership return, process return, production equipment return, product return, real option return, technology return, total return, vendor return, vendor relationship return, alliance value, brand value, channel value, content value, contingent liabilities, customer value, customer relationship value, current operation value, derivative value, employee value, employee relationship value, enterprise value, external factor value, event value, information technology value, intellectual property value, investment value, knowledge value, market sentiment value, market value, market volatility, organization value, partnership value, process value, production equipment value, product value, real option value, technology value, vendor value, vendor relationship value and combinations thereof.

19. The method of claim 1 where non-linear mixed integer optimization algorithms, multi criteria optimizations or genetic algorithms are used for determining the optimal set of features.

20. The method of claim 1 where the volume purchase discounts are considered in the determination of the optimal set of features.

21. The method of claim 20 where volume purchase discounts considered are item discounts, committed business volume discounts, as ordered business volume discounts and combinations thereof.

22. A facet optimization method, comprising:

obtaining context and feature data for a facet of organization performance;

defining a simulation model using said context and data; and

using said model to determine the set of features that optimize one or more aspects of financial performance for said organization.

23. The method of claim 22 where features encapsulate all the different options the organization management has for managing the facet of organization performance.

24. The method of claim 23 where features include any options for implementing a feature at a future date.

25. The method of claim 22 where the organization is a single product, a group of products, a division, a company, a multi-company corporation, a value chain or a collaboration.

26. The method of claim 22 where context includes information from the group consisting of administrative context, strategic business context and combinations thereof.

27. The method of claim 26 where administrative context is defined by the commitments, requirements and status of the facet being optimized.

28. The method of claim 26 where the strategic business context is defined by the organization segments of value, elements of value, risks and external factors that will be affected by the feature selection.

29. The method of claim 28 where the organization segments of value are current operations, real options, derivatives, investments, market sentiment and combinations thereof.

30. The method of claim 28 where the organization risks are selected from the group consisting of element variability risks, external factor variability risks, contingent liabilities, strategic risks, market volatility risks, event risks and combinations thereof.

31. The method of claim 28 where the organization elements of value are selected from the group consisting of alliances, brands, channels, customers, customer relationships, employees, equipment, knowledge, intellectual property, investors, partnerships, processes, quality, vendors, vendor relationships, visitors and combinations thereof.

32. The method of claim 28 where the external factors are selected from the group consisting of numerical indicators of conditions external to the organization, numerical indications of prices external to the organization, numerical indications of organization conditions compared to external expectations of organization condition, numerical indications of the organization performance compared to external expectations of organization performance and combinations thereof.

33. The method of claim 28 where identifying the segments of value, elements of value, risks and external factors that will be affected by the purchasing feature selection further comprises:

obtaining an xml schema for the organization market value matrix, and

mapping facet features to the market value matrix using said schema.

34. The method of claim 22 that optionally displays the impact of the optimized feature set on moving the organization closer to or further from the efficient frontier.

35. The method of claim 22 where the method further comprises displaying the organization value and the optimal set of features using a paper document or electronic display.

36. The method of claim 22 where the facet of organization performance is selected from the group consisting of alliance management, brand management, channel management, content management, contingent liability management, customer management, customer relationship management, current operation management, derivative management, employee management, employee relationship management, energy management, enterprise risk management, external factor risk management, event risk management, fraud risk management, information technology management, intellectual property management, investment management, knowledge management, market sentiment management, market risk management, market volatility management, organization management, partnership management, process management, production equipment management, product management, project management, purchasing management, real option management, technology management, total risk management, vendor management, vendor relationship management, weather risk management and combinations thereof.

37. The method of claim 22 where the context data is obtained from a web service, operating system layer or operating system extension.

38. The method of claim 22 where the one or more aspects of organization financial performance are selected from the group consisting of alliance risk, brand risk, channel risk, content risk, contingent liabilities, customer risk, customer relationship risk, current operation risk, derivative risk, employee risk, employee relationship risk, energy risk, enterprise risk, external factor risk, event risk, fraud risk, information technology risk, intellectual property risk, investment risk, knowledge risk, market sentiment risk, market risk, market volatility, organization risk, partnership risk, process risk, production equipment risk, product risk, project risk, real option risk, technology risk, total risk, vendor risk, vendor relationship risk, weather risk, alliance return, brand return, channel return, content return, contingent liabilities, customer return, customer relationship return, current operation return, derivative return, employee return, employee relationship return, enterprise return, external factor return, event return, information technology return, intellectual property return, investment return, knowledge return, market sentiment return, market return, market volatility, organization return, partnership return, process return, production equipment return, product return, real option return, technology return, total return, vendor return, vendor relationship return, alliance value, brand value, channel value, content value, contingent liabilities, customer value, customer relationship value, current operation value, derivative value, employee value, employee relationship value, enterprise value, external factor value, event value, information technology value, intellectual property value, investment value, knowledge value, market sentiment value, market value, market volatility, organization value, partnership value, process value, production equipment value, product value, project value, real option value, technology value, vendor value, vendor relationship value and combinations thereof.

39. The method of claim 22 where non-linear mixed integer optimization algorithms, multi-criteria optimizations or genetic algorithms are used for determining the optimal mix of features.

40. The method of claim 22 further comprising the use of simulation system data in defining context.

41. A computer readable medium having sequences of instructions stored therein, which when executed cause the processors in a plurality of computers that have been connected via a network to perform a facet optimization method, comprising:

obtaining context and feature data for a facet of organization performance;

defining a simulation model using said context and data; and

using said model to determine the set of features that optimize one or more aspects of financial performance for said organization.

42. The computer readable medium of claim 41 where features encapsulate all the different options the organization management has for managing the facet of organization performance.

43. The computer readable medium of claim 42 where features include any options for implementing a feature at a future date.

44. The computer readable medium of claim 41 where the organization is a single product, a group of products, a division, a company, a multi-company corporation, a value chain or a collaboration.

45. The computer readable medium of claim 41 where context includes information from the group consisting of administrative context, strategic business context and combinations thereof.

46. The computer readable medium of claim 45 where administrative context is defined by the commitments, requirements and status of the facet being optimized.

47. The computer readable medium of claim 45 where the strategic business context is defined by the organization segments of value, elements of value, risks and external factors that will be affected by the feature selection.

48. The computer readable medium of claim 47 where the organization segments of value are selected from the group consisting of current operations, real options, derivatives, investments, market sentiment and combinations thereof.

49. The computer readable medium of claim 47 where the risks are selected from the group consisting of element variability risks, external factor variability risks, contingent liabilities, strategic risks, market volatility risks, event risks and combinations thereof.

50. The computer readable medium of claim 47 where the elements of value are selected from the group consisting of alliances, brands, channels, customers, customer relationships, employees, equipment, knowledge, intellectual property, investors, partnerships, processes, quality, vendors, vendor relationships, visitors and combinations thereof.

51. The computer readable medium of claim 47 where the external factors are selected from the group consisting of numerical indicators of conditions external to the organization, numerical indications of prices external to the organization, numerical indications of organization conditions compared to external expectations of organization condition, numerical indications of the organization performance compared to external expectations of organization performance and combinations thereof.

52. The computer readable medium of claim 47 where identifying the segments of value, elements of value, risks and external factors that will be affected by the purchasing feature selection further comprises:

obtaining an xml schema for the organization market value matrix, and

mapping facet features to the market value matrix using said schema.

53. The computer readable medium of claim 41 that optionally displays the impact of the optimized feature set on moving the organization closer to or further from the efficient frontier.

54. The computer readable medium of claim 41 where the method further comprises displaying the organization value and the optimal set of features using a paper document or electronic display.

55. The computer readable medium of claim 41 where the facet of organization performance is selected from the group consisting, of alliance management, brand management, channel management, content management, contingent liability management, customer management, customer relationship management, current operation management, derivative management, employee management, employee relationship management, energy management, enterprise risk management, external factor risk management, event risk management, fraud risk management, information technology management, intellectual property management, investment management, knowledge management, market sentiment management, market risk management, market volatility management, organization management, partnership management, process management, production equipment management, product management, project management, purchasing management, real option management, technology management, total risk management, vendor management, vendor relationship management, weather risk management and combinations thereof.

56. The computer readable medium of claim 41 where the context data is obtained from a web service, operating system layer or operating system extension.

57. The computer readable medium of claim 41 where the one or more aspects of organization financial performance are selected from the group consisting of alliance risk, brand risk, channel risk, content risk, contingent liabilities, customer risk, customer relationship risk, current operation risk, derivative risk, employee risk, employee relationship risk, energy risk, enterprise risk, external factor risk, event risk, fraud risk, information technology risk, intellectual property risk, investment risk, knowledge risk, market sentiment risk, market risk, market volatility, organization risk, partnership risk, process risk, production equipment risk, product risk, project risk, real option risk, technology risk, total risk, vendor risk, vendor relationship risk, weather risk, alliance return, brand return, channel return, content return, contingent liabilities, customer return, customer relationship return, current operation return, derivative return, employee return, employee relationship return, enterprise return, external factor return, event return, information technology return, intellectual property return, investment return, knowledge return, market sentiment return, market return, market volatility, organization return, partnership return, process return, production equipment return, product return, real option return, technology return, total return, vendor return, vendor relationship return, alliance value, brand value, channel value, content value, contingent liabilities, customer value, customer relationship value, current operation value, derivative value, employee value, employee relationship value, enterprise value, external factor value, event value, information technology value, intellectual property value, investment value, knowledge value, market sentiment value, market value, market volatility, organization value, partnership value, process value, production equipment value, product value, project value, real option value, technology value, vendor value, vendor relationship value and combinations thereof.

58. The computer readable medium of claim 41 where non-linear mixed integer optimization algorithms, multi-criteria optimizations or genetic algorithms are used for determining the optimal mix of features.

59. A facet optimization system, comprising:

computers connected by a network each with a processor having circuitry to execute instructions;

a storage device available to each processor with sequences of instructions stored therein, which when executed cause the processors to;

obtain context and feature data for a facet of organization performance;

define a simulation model using said context and data; and

use said model to determine the set of features that optimize one or more aspects of financial performance for said organization.

60. The system of claim 59 where features encapsulate all the different options the organization management has for managing the facet of organization performance.

61. The system of claim 59 where the organization is a single product, a group of products, a division, a company, a multi-company corporation, a value chain or a collaboration.

62. The system of claim 59 where context includes information from the group consisting of administrative context, strategic business context and combinations thereof.

63. The system of claim 59 that optionally displays the impact of the optimized feature set on moving the organization closer to or further from the efficient frontier.

64. The system of claim 59 where the method further comprises displaying the organization value and the optimal set of features using a paper document or electronic display.

65. The system of claim 59 where the context data is obtained from a web service, operating system layer or operating system extension.

66. The system of claim 59 where the one or more aspects of organization financial performance are selected from the group consisting of alliance risk, brand risk, channel risk, content risk, contingent liabilities, customer risk, customer relationship risk, current operation risk, derivative risk, employee risk, employee relationship risk, energy risk, enterprise risk, external factor risk, event risk, fraud risk, information technology risk, intellectual property risk, investment risk, knowledge risk, market sentiment risk, market risk, market volatility, organization risk, partnership risk, process risk, production equipment risk, product risk, project risk, real option risk, technology risk, total risk, vendor risk, vendor relationship risk, weather risk, alliance return, brand return, channel return, content return, contingent liabilities, customer return, customer relationship return, current operation return, derivative return, employee return, employee relationship return, enterprise return, external factor return, event return, information technology return, intellectual property return, investment return, knowledge return, market sentiment return, market return, market volatility, organization return, partnership return, process return, production equipment return, product return, real option return, technology return, total return, vendor return, vendor relationship return, alliance value, brand value, channel value, content value, contingent liabilities, customer value, customer relationship value, current operation value, derivative value, employee value, employee relationship value, enterprise value, external factor value, event value, information technology value, intellectual property value, investment value, knowledge value, market sentiment value, market value, market volatility, organization value, partnership value, process value, production equipment value, product value, project value, real option value, technology value, vendor value, vendor relationship value and combinations thereof.

67. The system of claim 59 where the facet of organization performance is selected from the group consisting of alliance management, brand management, channel management, content management, contingent liability management, customer management, customer relationship management, current operation management, derivative management, employee management, employee relationship management, energy management, enterprise risk management, external factor risk management, event risk management, fraud risk management, information technology management, intellectual property management, investment management, knowledge management, market sentiment management, market risk management, market volatility management, organization management, partnership management, process management, production equipment management, product management, project management, purchasing management, real option management, technology management, total risk management, vendor management, vendor relationship management, weather risk management and combinations thereof.