System and method for ensuring order fulfillment

• US 7,668,761 B2
• Filed: 10/29/2001
• Issued: 02/23/2010
• Est. Priority Date: 10/27/2000
• Status: Active Grant

• Current Assignee: Blue Yonder Group, Inc. (Panasonic Holdings Corporation)
• Original Assignee: JDA Software Group Incorporated (RedPrairie Holding Incorporated)
• Inventors: Kanth, Boina, Hsiang, Phoebe, Jenkins, Joseph A., Seaman, Rosalie, Bestland, Grace
• Primary Examiner(s): Kazimi; Hani
• Assistant Examiner(s): Shrestha; Bijendra K
• Application Number:
  US09/984,349
• Publication Number:
  US 20020188499A1
• Time in Patent Office: 3,039 Days
• Field of Search: 705/8, 705/26, 705/28
• US Class Current: 705/28
• CPC Class Codes: G06Q 10/087 Inventory or stock management, e.g. order filling, procurement or balancing against orders

Abstract

The present invention provides a system and method whereby companies can optimally resolve the conflicts with respect to product availability. Embodiments of the invention allow users to search for product availability throughout its entire supply chain network to address conflicts as they arise. In particular, the present invention creates time-phased inventory plans that meet customer requirements while minimizing inventory and maximizing profit by ensuring that a company is carrying the right inventory at the right locations. Using the present invention, companies can orchestrate the time-phased storage and flow of a given product'"'"'s supply to match demand by creating an optimal inventory strategy that includes deployment plans, master production schedules, and procurement requirements.

Claims

1. A computer implemented method utilizing code stored in a computer storage medium for fulfilling an order that requests items by a requested date, comprising:

storing supply chain data including information identifying the items by stock-keeping unit (SKU), a physical location for each SKU, a quantity of each SKU at each location, replenishment data for each SKU, a minimum inventory level for each SKU at each location, a storage cost for each SKU at each location, and distribution data for each SKU in a database comprising a computer storage medium provided by a database server;

tracking changes in the supply chain and determining actions to meet requirements of the order given the changes to the supply chain by a computer implemented distribution module provided by a fulfillment server for calculating replenishment requirements by applying leveling logic based on sourcing requirements, generating planned replenishments, adjusting coverage durations, and making adjustments to avoid waste, and for flagging potential issues with planning to replenish inventory;

generating shipments of SKUs and managing distribution and transportation requirements based on the shipments by a computer implemented deployment module provided by the fulfillment server;

managing a production schedule of the SKUs in view of the orders by a computer implemented production module provided by the fulfillment server;

adjusting the distribution module to replenish SKUs in line with material availability by a computer implemented material allocation module provided by the fulfillment server; and

producing an output by the fulfillment server comprising a date sensitive replenishment requirement using an expiration date, shelf life duration, coverage cycle, maximum waste factor, and projected unusable on-hand inventory information in generating planned replenishment of inventory,

wherein the date sensitive replenishment requirement applies a first effective shelf life for an item of inventory that is one of;

a) produced in the winter;

or b) being shipped to a geographic location having a cold climate, and a second effective shelf life for an item of inventory that is one of;

a) produced in the summer;

or b) being shipped to a geographic location having a warm climate,

wherein the replenishment requirement determines an inventory level for a physical location that considers for an arrival date an amount of usable inventory at that physical location, wherein the usable inventory is equal to the on-hand inventory less the unusable inventory, wherein the unusable inventory includes SKUs that have exceeded their effective shelf life, wherein the effective shelf life of an SKU is the difference between the shelf life of the SKU and the minimum shelf life of that SKU, and wherein the minimum shelf life of an SKU is the amount of shelf life the SKU must have remaining to be acceptable to a consumer.

2. The computer implemented method of claim 1, further comprising resolving shortages from a source selected from the group consisting of surplus inventory, lowest cost alternative source, and alternative source with lowest restocking cost.

3. The computer implemented method of claim 1, further comprising calculating shortage quantities for a location using the minimum level of inventory of each SKU that needs to be maintained at each location.

4. The computer implemented method of claim 1, further comprising scheduling shipments based on an allocation calendar, shipment calendar, and arrival calendar.

5. The computer implemented method of claim 1, further comprising sorting the order of shipments by location priority, demand priority, ship date, or arrival date.

6. The computer implemented method of claim 1, further comprising using an allocation scheme to distribute available inventory based on demand percentage if insufficient inventory of SKUs exists to meet demand.

7. The computer implemented method of claim 1, further comprising building a load by determining which shipments are placed in the load, establishing when the load is full, limiting how early the shipments can arrive at a destination, and setting priority for adding shipments to a partially filled load.

8. The computer implemented method of claim 7, further comprising calculating the priority for adding shipments to the partially filled load by imposing a penalty for each day that a shipment is pulled forward if added to the load, providing a reward representing benefits from each SKU that is already on the load, imposing a penalty on a shipment that must be split in order to add the shipment to the load, imposing a penalty on a shipment that when added to the load does not fill the load completely, and providing a reward for a shipment which must be shipped.

9. The computer implemented method of claim 1, further comprising managing production loads on resources in the production plan by moving production load to another time period, altering production process, moving production load to another location, and deleting the excess production load.

10. A computer readable storage medium containing computer readable program code usable with a programmable computer processor, comprising:

computer readable program code which provides for a database containing supply chain data including the items by stock-keeping units (SKU);

computer readable program code which provides a distribution module for tracking changes in the supply chain in the database and determining actions to meet a date sensitive replenishment requirement of the order given the changes to the supply chain, the distribution module including,

(a) a planning component for replenishing inventory of SKUs based on orders, arrivals, and forecasts, wherein the planning component uses an expiration date, shelf life duration, coverage cycle, maximum waste factor, and projected unusable on hand inventory information in generating a planned replenishment of inventory,

wherein the date sensitive replenishment requirement applies a first effective shelf life for an SKU that is one of;

a) produced in the winter;

or b) being shipped to a geographic location having a cold climate, and a second effective shelf life for an SKU that is one of;

a) produced in the summer;

or b) being shipped to geographic location having a warm climate,

(b) a dynamic deployment component for resolving shortages by moving SKUs from a source with a surplus to a destination with a shortage, and

(c) a scheduling component for releasing the orders of SKUs;

computer readable program code which provides a deployment module for generating shipments of SKUs and managing distribution and transportation requirements based on the shipments;

computer readable program code which provides a production module for managing and generating a production schedule of the SKUs in view of the orders and forecasts; and

computer readable program code which provides a material allocation module for adjusting the distribution module to replenish SKUs in line with material availability, wherein SKUs available for shipment do not include SKUs determined to be unusable, wherein SKUs determined to be unusable include those SKUs that have exceeded their effective shelf life, wherein the effective shelf life of an SKU is equal to the difference between the shelf life of the SKU and the minimum shelf life for the SKU.

11. The computer readable storage medium of claim 10, wherein the production module includes:

a load leveler component for managing production loads on resources in a production plan; and

a constrained production planning component for determining a production load offset duration as a time between when the production load is placed on a critical resource and when the order is ready to ship.

12. The computer readable storage medium of claim 10, wherein the production module includes:

computer readable program code that prorates the forecast;

computer readable program code that adjusts the forecast;

computer readable program code that calculates replenishment requirements by applying leveling logic based on sourcing requirements, generating planned replenishments, adjusting coverage durations, and making adjustments to avoid waste; and

computer readable program code that flags potential issues with planning for replenishing inventory.

13. The computer readable storage medium of claim 10, wherein the deployment module includes:

a load builder component for placing a plurality of shipments of SKUs into a vehicle load;

a load manager component for reviewing and revising the vehicle load; and

a distribution planning component for tracking excess, obsolete, and expiring inventory of SKUs.

14. A computer system for fulfilling orders, comprising:

means for providing a database containing supply chain data including the items by stock-keeping units (SKU);

means for providing a distribution module for tracking changes in the supply chain in the database and determining actions to meet requirements of the order given the changes to the supply chain, the distribution module including,

(a) a planning component for replenishing inventory of SKUs based on orders, arrivals, and forecasts, wherein the planning component calculates replenishment requirements by applying leveling logic based on sourcing requirements, generating planned replenishments, adjusting coverage durations, and making adjustments to avoid waste, and flagging potential issues with planning to replenish inventory,

(b) a dynamic deployment component for resolving shortages by moving SKUs from sources with a surplus to destinations with shortages, and

(c) a scheduling component for releasing the orders of SKUs;

means for providing a deployment module for generating shipments of SKUs and managing distribution and transportation requirements based on the shipments;

means for providing a production module for managing a production schedule of the SKUs in view of the orders and forecasts; and

means for providing a material allocation module for adjusting the distribution module to replenish SKUs in line with material availability, wherein a date sensitive replenishment requirement is determined using an expiration date, shelf life duration, coverage cycle, maximum waste factor, and projected unusable on hand inventory information,

wherein the date sensitive replenishment requirement applies a first effective shelf life for an item of inventory that is one of;

a) produced in the winter;

or b) being shipped to a geographic location having a cold climate, and a second effective shelf life for an item of inventory that is one of;

a) produced in the summer;

or b) being shipped to a geographic location having a warm climate,

wherein the date sensitive replenishment requirement determines an inventory level for a physical location that considers for an arrival date an amount of usable inventory at that physical location, wherein the usable inventory is equal to the on hand inventory less the unusable inventory, wherein the unusable inventory includes SKUs that have exceeded their effective shelf life, wherein SKUs available for shipment do not include SKUs determined to be unusable, wherein SKUs determined to be unusable include those SKUs that have exceeded their effective shelf life, wherein the effective shelf life of an SKU is equal to the difference between the shelf life of the SKU and the minimum shelf life for the SKU, and wherein the minimum shelf life for an SKU is the amount of shelf life the SKU must have remaining to be acceptable to a consumer.

15. The computer system of claim 14, wherein the planning component includes:

means for prorating the forecast;

means for adjusting the forecast;

means for calculating replenishment requirements by applying leveling logic based on sourcing requirements, generating planned replenishments, adjusting coverage durations, and making adjustments to avoid waste; and

means for flagging potential issues with planning for replenishing inventory.

16. The computer system of claim 14, wherein the planning component uses expiration date, shelf life duration, coverage cycle, maximum waste factor, and projected unusable on-hand inventory information and applies demand reduction logic in generating planned replenishment of inventory.

17. The computer system of claim 14, wherein the load builder builds a load by determining which shipments are placed in the load, establishing when the load is full, limiting how early the shipments can arrive at a destination, and setting priority for adding shipments to a partially filled load.

18. The computer system of claim 17, wherein the load builder calculates the priority for adding shipments to the partially filled load by imposing a penalty for each day that a shipment is pulled forward if added to the load, providing a reward representing benefits from each SKU that is already on the load, imposing a penalty on a shipment that must be split in order to add the shipment to the load, imposing a penalty on a shipment that when added to the load does not fill the load completely, and providing a reward for a shipment which must be shipped.