Managing and evaluating procurement risk

• US 20060095362A1
• Filed: 11/01/2004
• Published: 05/04/2006
• Est. Priority Date: 11/01/2004
• Status: Active Grant

• Current Assignee: Hewlett Packard Enterprise Development LP (Hewlett-Packard Enterprise Company)
• Original Assignee: Hewlett-Packard Development Company, L.P. (HP Inc.)
• Inventors: Nagali, Venu, Hwang, Jerry
• Granted Patent: US 7,747,500 B2
• Time in Patent Office: Days
• US Class Current: 705/37
• CPC Class Codes: G06Q 40/04 Trading; Exchange, e.g. stocks, commodities, derivatives or currency exchange
• CPC Class Codes: G06Q 40/06 Asset management; Financial planning or analysis
• CPC Class Codes: G06Q 40/08 Insurance

Abstract

Methods, systems, and computer programs that enable procurement risk to be efficiently and effectively managed and evaluated are described. In one aspect, inputs specifying one or more forward contracts in a sourcing portfolio for procuring a resource from one or more suppliers are received. Inputs specifying one or more aspects of a target sourcing strategy for procuring the resource also are received. A procurement risk evaluation report comparing the sourcing portfolio and the target sourcing strategy is presented.

Claims

1. A machine-implemented procurement risk management method, comprising:

receiving inputs specifying one or more forward contracts in a sourcing portfolio for procuring a resource from one or more suppliers;

receiving inputs specifying one or more aspects of a target sourcing strategy for procuring the resource; and

presenting a procurement risk evaluation report comparing the sourcing portfolio and the target sourcing strategy.

2. The method of claim 1, wherein the receiving of inputs specifying one or more forward contracts comprises receiving inputs specifying terms of each forward contract.

3. The method of claim 2, wherein the receiving of inputs specifying forward contract terms comprises receiving for each forward contract inputs specifying one or more of a quantity cap, a quantity floor, a price, a price cap, and a price floor in one or more periods of a planning horizon.

4. The method of claim 3, further comprising computing unspecified forward contract term inputs by interpolating between received forward contract term inputs.

5. The method of claim 2, wherein the receiving of inputs specifying forward contract terms comprises receiving for each forward contract an input labeling the quantity terms of the corresponding forward contract and an input labeling the price terms of the corresponding forward contract.

6. The method of claim 1, wherein the receiving of inputs specifying the one or more aspects of the target sourcing strategy comprises receiving inputs specifying quantities of the resource to be supplied by the sourcing portfolio in respective periods of a planning horizon.

7. The method of claim 6, wherein the quantity-specifying inputs are received for a price protection aspect of the target sourcing strategy.

8. The method of claim 7, wherein the price protection aspect of the target sourcing strategy corresponds to a specification of quantities of the resource covered by at least one of price cap terms and fixed price terms of the forward contracts in the sourcing portfolio.

9. The method of claim 6, wherein the quantity-specifying inputs are received for a quantity protection aspect of the target sourcing strategy.

10. The method of claim 9, wherein the quantity protection aspect of the target sourcing strategy corresponds to a specification of quantities of the resource covered by at least one of quantity floor terms and quantity cap terms of the forward contracts in the sourcing portfolio.

11. The method of claim 6, wherein the input quantities of the resource are specified as absolute quantities values.

12. The method of claim 6, wherein the input quantities of the resource are specified relative to a demand forecast scenario for the resource.

13. The method of claim 6, further comprising computing unspecified resource quantity inputs by interpolating between the received resource quantity inputs.

14. The method of claim 1, wherein presenting the procurement risk evaluation report comprises displaying a plot of quantities of the resource provided under terms of the forward contracts in the sourcing portfolio and a plot of quantities of the resource specified by a corresponding aspect of the target sourcing strategy over a planning horizon.

15. The method of claim 14, wherein the plotted aspect of the target sourcing strategy corresponds to a commitment target profile specifying minimum quantities of the resource committed to being supplied under the sourcing portfolio over the planning horizon.

16. The method of claim 15, wherein the plotted sourcing portfolio quantities correspond to total quantities of the resource covered by quantity floor terms of the forward contracts in the sourcing portfolio over the planning horizon, wherein the commitment target profile and the total sourcing portfolio quantities are displayed concurrently in the procurement risk evaluation report.

17. The method of claim 14, wherein the plotted aspect of the target sourcing strategy corresponds to a price protection target profile specifying quantities of the resource covered by fixed price and price cap terms of the forward contracts in the sourcing portfolio over the planning horizon.

18. The method of claim 17, the plotted sourcing portfolio quantities correspond to total quantities of the resource covered by fixed price and price cap terms of the forward contracts in the sourcing portfolio over the planning horizon, wherein the price protection target profile and the total sourcing portfolio quantities are displayed concurrently in the procurement risk evaluation report.

19. The method of claim 14, wherein the plotted aspect of the target sourcing strategy corresponds to a total volume protection target profile specifying quantities of the resource covered by quantity floor and quantity cap terms of the forward contracts in the sourcing portfolio over the planning horizon.

20. The method of claim 19, the plotted sourcing portfolio quantities correspond to total quantities of the resource covered by quantity floor and quantity cap terms of the forward contracts in the sourcing portfolio over the planning horizon, wherein the total volume protection target profile and the total sourcing portfolio quantities are displayed concurrently in the procurement risk evaluation report.

21. The method of claim 1, wherein the presenting of the procurement risk evaluation report comprises displaying a plot of demand forecast scenarios for the resource and a plot of quantities of the resource provided under terms of the forward contracts in the sourcing portfolio over a planning horizon.

22. The method of claim 21, wherein the plotted sourcing portfolio quantities of the resource correspond to minimum quantities of the resource committed to being supplied under the sourcing portfolio over the planning horizon.

23. The method of claim 21, wherein the plotted sourcing portfolio quantities of the resource correspond to quantities of the resource covered by fixed price and price cap terms of the forward contracts in the sourcing portfolio over the planning horizon.

24. The method of claim 21, wherein the plotted sourcing portfolio quantities of the resource correspond to quantities of the resource covered by quantity floor and quantity cap terms of the forward contracts in the sourcing portfolio over the planning horizon.

25. The method of claim 1, further comprising receiving inputs specifying a forecast scenario for an economic attribute of the resource over the planning horizon.

26. The method of claim 25, wherein the receiving of inputs specifying the forecast scenario comprise receiving demand attribute inputs corresponding to a demand forecast scenario for the resource specified in absolute quantity terms, specified in relative quantity terms, or generated based on a demand template for the resource.

27. The method of claim 25, wherein the receiving of inputs specifying the forecast scenario comprise receiving price attribute inputs corresponding to a price forecast scenario for the resource specified in absolute quantity terms, specified in relative quantity terms, or generated based on a price template for the resource.

28. The method of claim 25, wherein the receiving of inputs specifying the forecast scenario comprise receiving availability attribute inputs corresponding to an availability forecast scenario for the resource specified in absolute quantity terms, specified in relative quantity terms, or generated based on an availability template for the resource.

29. A machine-implemented procurement risk management system comprising a graphical user interface operable to:

receive inputs specifying one or more forward contracts in a sourcing portfolio for procuring a resource from one or more suppliers;

receive inputs specifying one or more aspects of a target sourcing strategy for procuring the resource; and

present a procurement risk evaluation report comparing the sourcing portfolio and the target sourcing strategy.

30. The system of claim 29, wherein the graphical user interface is operable to receive inputs specifying quantities of the resource to be supplied by the sourcing portfolio in respective periods of a planning horizon.

31. The system of claim 30, wherein the graphical user interface is operable to receive quantity-specifying inputs for a price protection aspect of the target sourcing strategy.

32. The system of claim 31, wherein the price protection aspect of the target sourcing strategy corresponds to a specification of quantities of the resource covered by at least one of price cap terms and fixed price terms of the forward contracts in the sourcing portfolio.

33. The system of claim 30, wherein the graphical user interface is operable to receive quantity-specifying inputs for a quantity protection aspect of the target sourcing strategy.

34. The system of claim 33, wherein the quantity protection aspect of the target sourcing strategy corresponds to a specification of quantities of the resource covered by at least one of quantity floor terms and quantity cap terms of the forward contracts in the sourcing portfolio.

35. The system of claim 30, wherein the input quantities of the resource are specified as absolute quantities values.

36. The system of claim 30, wherein the input quantities of the resource are specified relative to a demand forecast scenario for the resource.

37. The system of claim 29, wherein the graphical user interface is operable to display a plot of quantities of the resource provided under terms of the forward contracts in the sourcing portfolio and a plot of quantities of the resource specified by a corresponding aspect of the target sourcing strategy over a planning horizon.

38. The system of claim 29, wherein the graphical user interface is operable to display a plot of a demand profile for the resource and a plot of quantities of the resource provided under terms of the forward contracts in the sourcing portfolio over a planning horizon.

39. A computer program for managing procurement risk, the computer program residing on a computer-readable medium and comprising computer-readable instructions for causing a computer to:

receive inputs specifying one or more forward contracts in a sourcing portfolio for procuring a resource from one or more suppliers;

receive inputs specifying one or more aspects of a target sourcing strategy for procuring the resource; and

present a procurement risk evaluation report comparing the sourcing portfolio and the target sourcing strategy.

40. The computer program of claim 39, wherein the computer-readable instructions cause the computer to receive inputs specifying quantities of the resource to be supplied by the sourcing portfolio in respective periods of a planning horizon.

41. The computer program of claim 40, wherein the computer-readable instructions cause the computer to receive quantity-specifying inputs for a price protection aspect of the target sourcing strategy.

42. The computer program of claim 41, wherein the price protection aspect of the target sourcing strategy corresponds to a specification of quantities of the resource covered by at least one of price cap terms and fixed price terms of the forward contracts in the sourcing portfolio.

43. The computer program of claim 40, wherein the computer-readable instructions cause the computer to receive quantity-specifying inputs for a quantity protection aspect of the target sourcing strategy.

44. The computer program of claim 43, wherein the quantity protection aspect of the target sourcing strategy corresponds to a specification of quantities of the resource covered by at least one of quantity floor terms and quantity cap terms of the forward contracts in the sourcing portfolio.

45. The computer program of claim 40, wherein the input quantities of the resource are specified as absolute quantities values.

46. The computer program of claim 40, wherein the input quantities of the resource are specified relative to a demand forecast scenario for the resource.

47. The computer program of claim 39, wherein the computer-readable instructions cause the computer to display a plot of quantities of the resource provided under terms of the forward contracts in the sourcing portfolio and a plot of quantities of the resource specified by a corresponding aspect of the target sourcing strategy over a planning horizon.

48. The computer program of claim 39, wherein the computer-readable instructions cause the computer to display a plot of a demand profile for the resource and a plot of quantities of the resource provided under terms of the forward contracts in the sourcing portfolio over a planning horizon.