Large inventory-service optimization in configure-to-order systems

• US 8,600,841 B2
• Filed: 04/03/2008
• Issued: 12/03/2013
• Est. Priority Date: 04/17/2000
• Status: Expired due to Fees

• Current Assignee: International Business Machines Corporation
• Original Assignee: International Business Machines Corporation
• Inventors: Cheng, Feng, Ettl, Markus, Lin, Grace Yuh-Jiun, Yao, David Da-Wei
• Primary Examiner(s): Zeender, F.
• Assistant Examiner(s): BUCHANAN, CHRISTOPHER R
• Application Number:
  US12/062,187
• Publication Number:
  US 20080215410A1
• Time in Patent Office: 2,070 Days
• Field of Search: None
• US Class Current: 705/28
• CPC Class Codes: G05B 19/4097 characterised by using design data to control NC machines, e.g. CAD/CAM G05B19/4093 takes precedence
• CPC Class Codes: G06Q 10/0631 Resource planning, allocation, distributing or scheduling for enterprises or organisations
• CPC Class Codes: G06Q 10/087 Inventory or stock management, e.g. order filling, procurement or balancing against orders
• CPC Class Codes: G06Q 10/0875 Itemisation or classification of parts, supplies or services, e.g. bill of materials
• CPC Class Codes: G06Q 20/203 Inventory monitoring

Abstract

A manufacturing process is migrated from an existing operation to a configure-to-order (CTO) system. As the CTO operation will eliminate the “machine-type model” (MTM) inventory of the existing operation, the emphasis is shifted to the components, or “building blocks”, which will still follow the build-to-stock scheme, due to their long leadtimes, and hence still require inventory. The solution involves an inventory-service trade-off of the new CTO system, resulting in performance gains, in terms of reduced inventory cost and increased service level. Other benefits include better forecast accuracy through parts commonality and risk-pooling, and increased customer demand, as orders will no longer be confined within a restricted set of pre-configured MTMs.

Claims

1. A method of managing manufacturing logistics of multiple end products for which no finished goods inventory is kept and wherein the end products have a demand forecast that changes weekly, and while a manufacturing process migrates from an existing operation to a configure-to-order (CTO) operation, wherein a CTO operation is a hybrid of make-to-stock and make-to-order operations;

comprising the following steps which are performed without keeping finished goods inventory for any end product; and

each of which method step is performed while the manufacturing process migrates from the existing operation to the CTO operation;

maintaining an inventory of components, which components, termed “

building blocks”

, are built to stock, each said component having a cost wherein the cost is stored in a database;

according to the CTO operation which is the hybrid of make-to-stock and make-to-order operations, configuring-to-order multiple different end products using said components as defined by a bill of materials (BOM) structure wherein the BOM structure is stored in a database, wherein each end product involves at least one unique component;

wherein the multiple different end products comprise six different end products;

establishing a base-stock level for each of said components;

computing the base-stock levels from a greedy algorithm which iteratively reduces inventory budget until a budget constraint is satisfied;

performing an optimization run at a week'"'"'s beginning and then updating base-stock levels weekly based on outcome of the optimization; and

replenishing said components from suppliers in accordance with said base-stock levels and using optimization processing so as to reduce a total cost of inventory of said components, with the optimization processing performed by a computer processor after having received input from the databases,

wherein said cost of at least one component differs from said cost of at least one other component, and wherein said difference determines the result of said replenishing step;

meanwhile taking customer orders from the Internet as the manufacturing process migrates from the existing operation to the CTO operation, wherein the CTO operation is a Web-based configure-to-order (CTO) operation where customer orders are being taken from the Internet.

2. The method of claim 1, including the processor receiving input from a database that contains optimization control parameters comprising budget limit on expected overall inventory cost and step size for a greedy algorithm, and also from a database that contains manufacturing system parameters.

3. The method of claim 2, in which the processor accesses the databases and first performs preprocessing steps, after which the processor performs optimization processing, after which the processor enters a postprocessing phase and performs a step of computing reorder points.

4. The method of claim 3, including after the computing of reorder points, translating the reorder points into days-of-supply and outputting to an output device or database days-of-supply for each component.

5. The method of claim 1, in which the steps are performed where the end products are a family comprising six different end products configured from a set comprising 17 different components which are obtained from external suppliers with different supply leadtimes.

6. A method of managing manufacturing logistics of multiple different end products for which no finished goods inventory is kept, wherein the multiple different end products are multiple different personal computers (PCs);

and while a manufacturing process migrates from an existing operation to a configure-to-order (CTO) operation, wherein a CTO operation is a hybrid of make-to-stock and make-to-order operations;

comprising the following steps which are performed without keeping finished goods inventory for any end product; and

each of which method step is performed while the manufacturing process migrates from the existing operation to the CTO operation;

maintaining an inventory of computers, wherein the components are stock computer component, which components, termed “

building blocks”

, are built to stock, each said component having a cost wherein the cost is stored in a database;

according to the CTO operation which is the hybrid of make-to-stock and make-to-order operations, configuring-to-order multiple different end products using said components as defined by a bill of materials (BOM) structure wherein the BOM structure is stored in a database, wherein each end product involves at least one unique component;

wherein the multiple different end products comprise six different end products;

establishing a base-stock level for each of said components; and

replenishing said components from suppliers in accordance with said base-stock levels and using optimization processing so as to reduce a total cost of inventory of said components, with the optimization processing performed by a computer processor after having received input from the databases,

wherein said cost of at least one component differs from said cost of at least one other component, and wherein said difference determines the result of said replenishing step;

meanwhile taking customer orders from the Internet as the manufacturing process migrates from the existing operation to the CTO operation, wherein the CTO operation is a Web-based configure-to-order (CTO) operation where customer orders are being taken from the Internet.

7. The method of managing manufacturing logistics of end products recited in claim 6, including deriving the base-stock levels from a greedy algorithm which iteratively reduces inventory budget until a budget constraint is satisfied.

8. The method of claim 6, in which the end products have a demand forecast that changes weekly, and the method comprises optimization run at a week'"'"'s beginning and then updating base-stock levels weekly based on outcome of the optimization.