Graphical user interface for procurement risk management system

• US 7,590,937 B2
• Filed: 10/03/2002
• Issued: 09/15/2009
• Est. Priority Date: 10/03/2002
• Status: Expired due to Fees

• Current Assignee: Hewlett Packard Enterprise Development LP (Hewlett-Packard Enterprise Company)
• Original Assignee: Hewlett-Packard Development Company, L.P. (HP Inc.)
• Inventors: Nagali, Venu, Olavson, Thomas D., Jacobus, Greg C., Hwang, Jerry
• Primary Examiner(s): RUDY, ANDREW J
• Application Number:
  US10/264,975
• Publication Number:
  US 20040068455A1
• Time in Patent Office: 2,539 Days
• Field of Search: 705/36.R, 705/7, 705/10, 345/418, 345/501, 700/209, 700/700, 706/12, 706/14, 706/45, 706/61, 706/923, 706/925, 709/203, 709/223
• US Class Current: 715/700
• CPC Class Codes: G06Q 10/06315 Needs-based resource requirements planning or analysis
• CPC Class Codes: G06Q 10/0635 Risk analysis of enterprise or organisation activities
• CPC Class Codes: G06Q 10/087 Inventory or stock management, e.g. order filling, procurement or balancing against orders
• CPC Class Codes: G06Q 30/0202 Market predictions or forecasting for commercial activities
• CPC Class Codes: G06Q 40/06 Asset management; Financial planning or analysis

Abstract

Systems and methods for managing procurement risk are described. In accordance with a procurement risk management method, a resource sourcing mix is computed from a sourcing portfolio of one or more forward contracts, spot market purchases, and inventory depletion for each period of a planning horizon based on forecast scenarios for resource demand, resource price, and resource availability and a specified inventory carrying policy for the resource. Based upon the computed resource sourcing mix, one or more metrics for evaluating the sourcing portfolio are computed. A system and a computer program implementing the above-described procurement risk management method also are described.

Claims

1. A procurement risk management system comprising:

a graphical user interface comprising;

at least one demand forecast scenario window for at least one resource;

at least one price forecast scenario window for the at least one resource;

at least one availability scenario window for the at least one resource; and

at least one sourcing option window;

wherein the graphical user interface receives inputs specifying forecast scenarios for demand, price, and availability for the at least one resource in respective forecast scenario windows;

receives inputs specifying one or more forward contracts in a sourcing portfolio for procuring the at least one resource from respective suppliers in the respective sourcing option windows; and

reports one or more metrics for evaluating the sourcing portfolio; and

a calculation engine receiving inputs from the graphical user interface, wherein the calculation engine operates to;

calculate a resource sourcing mix based on the received inputs; and

calculate one or more metrics for evaluating risk in the sourcing portfolio based on the calculated resource sourcing mix;

wherein the calculation engine generates reports comprising the one or more metrics for evaluating risk in the sourcing portfolio;

wherein the at least one resource is procured based on the generated reports and controls an inventory level of product.

2. The system of claim 1, wherein the graphical user interface is operable to display one or more of the forecast scenario windows for resource demand, resource price, and resource availability at a time.

3. The system of claim 1, wherein each forecast scenario window contains for each of multiple scenarios a row for a forecast value in each period of a planning horizon.

4. The system of claim 3, wherein the graphical user interface includes for each row an autofill button selectable by a user to cause the procurement risk management system to fill-in unspecified forecast values in a row by interpolation based on user-specified forecast values in the same row.

5. The system of claim 3, wherein each forecast scenario window includes a graph button selectable by a user to cause the graphical user interface to display a graph of forecast values in the rows of the corresponding forecast scenario window.

6. The system of claim 1, wherein one or more forecast scenario windows each includes a respective drop down menu respectively presenting options selectable by a user to specify how to generate a set of forecast scenarios from a respective base forecast.

7. The system of claim 6, wherein the demand forecast window includes a drop down menu presenting options allowing demand forecast scenarios to be specified by a user in absolute quantity terms, specified by a user in relative quantity terms, or generated based on a user-selected resource demand template,

wherein the demand template is computed according to the formula:

y(m)={b−

(b−

1)*exp[−

3m/k₁] if m≦

t, b−

(b−

1)*exp[−

3m/k₁]+d−

d*exp[−

3(m−

t)/k₂] if m>

t},

wherein;

y is a percentage of base demand;

b is an upper or lower boundary value parameter in a first phase;

k₁ is a time constant parameter indicating a number of months before a value reaches 95% of the boundary value parameter;

t is the time at which a second phase begins;

d is an incremental shift from the first phase to the second phase; and

k₂ is a time constant parameter for the second phase to stabilize.

8. The system of claim 6, wherein the price forcast window includes a drop down menu presenting options allowing price forcast scenarios to be specified by a user in absolute quantity terms, specified by a user in relative quantity terms, or generated based on user-selected resource price template.

9. The system of claim 6, wherein the availability forecast window includes a drop down menu presenting options allowing availability forecasts scenarios to be specified in terms of maximum available unit in each demand scenario, percentage of demand in each demand scenario, or percentage of demand in each price scenario.

10. The system of claim 1, wherein the graphical user interface is further operable to receive one or more inputs specifying correlations between forecast scenarios.

11. The system of claim 10, wherein the graphical user interface comprises a forecast correlation window prompting a user to specify a degree of price-demand correlation or a degree of price-availability correlation, or both.

12. The system of claim 1, wherein the graphical user interface is operable to display one or more of the sourcing option windows at a time.

13. The system of claim 1, wherein each sourcing option window contains for each of multiple contract terms a row for a contract term value in each period of a planning horizon.

14. The system of claim 13, wherein each sourcing option window contains rows for specifying one or more of a quantity cap, a quantity floor, a price, a price cap, and a price floor in each period of a planning horizon.

15. The system of claim 13, wherein the graphical user interface includes for each row an auto fill button selectable by a user to cause the procurement risk management system to fill-in unspecified contract term values in a row by interpolation based on user-specified contract term values in the same row.

16. The system of claim 13, wherein each sourcing option window contains a row for specifying an additional cash payment in each period of the planning horizon.

17. The system of claim 1, wherein the graphical user interface is further operable to receive a user-specified inventory carrying policy.

18. The system of claim 17, wherein the graphical user interface comprises an inventory carrying policy specification window with a row for a maximum inventory target in each period of a planning horizon.

19. The system of claim 18, wherein the inventory carrying policy specification window has a row for a buffer stock level in each period of the planning horizon.

20. The system of claim 18, wherein the inventory carrying policy specification window has input boxes for receiving a risk free discount rate for finance charges value and a storage cost value.

21. A procurement risk management system comprising a graphical user interface operable to:

receive inputs specifying forecast scenarios for demand, price, and availability for a resource in respective forecast scenario windows;

receive inputs specifying one or more forward contracts in a sourcing portfolio for procuring the resource from respective suppliers in respective sourcing option windows; and

report one or more metrics for evaluating the sourcing portfolio;

wherein the graphical user interface is further operable to receive financial inputs;

wherein the graphical user interface comprises a shortage cost window with a row for a shortage cost value in each period of a planning horizon;

wherein the graphical user interface comprises an autofill button selectable by a user to cause the procurement risk management system to fill-in unspecified shortage cost values in a row by interpolation based on user-specified shortage cost values in the same row; and

wherein when one of the unspecified shortage cost values is in a cell in the row at period j and the user-specified shortage cost values are in cells i and k, respectively, in the same row as the cell at period j, and period j is between periods i and k such that i<

j<

k, interpolation is calculated by the following formula;

value(j)=value(i)+[(j−

i)/(k−

i)]*[value(k)−

value(i)];

wherein when one of the unspecified shortage cost values is in a cell in the row at period i preceding a first two user-specified shortage cost values in cells j and k, respectively, interpolation is calculated by the following formula;

value(i)=value(j)+[(j−

i)/(k−

j)]*[value(k)−

value(j)]; and

wherein when one of the unspecified shortage cost values is in a cell in the row at period k following a last two user-specified shortage cost values in cells i and j, interpolation is calculated by the following formula;

value(k)=value(j)+[(k−

j)/(j−

i)]*[value(j)−

value(i)].

22. The system of claim 21, wherein the graphical user interface comprises an input box for receiving an annual discount rate value.

23. The system of claim 21, wherein the graphical user interface comprises a shortage cost window with a drop down menu presenting shortage cost type options selectable by a user.

24. The system of claim 23, wherein the drop down menu presents for selection by a user a lost margin shortage cost type, a fixed cost/unit adder shortage cost type, and a price multiplier shortage cost type.

25. The system of claim 21, wherein the graphical user interface comprises a window containing for each of multiple scenarios a row for a margin value in each period of a planning horizon.

26. The system of claim 25, wherein the graphical user interface comprises an autofill button selectable by a user to cause the procurement risk management system to fill-in unspecified margin values in a row by interpolation based on user-specified margin values in the same row.

27. The system of claim 21, wherein the graphical user interface comprises a window containing a row for a margin sensitivity value in each period of a planning horizon.

28. The system of claim 27, wherein margin sensitivity is specified as percent of price volatility absorbed by product margin.

29. The system of claim 21, wherein the graphical user interface comprises a window containing for each of multiple scenarios a row for an inventory salvage value in each period of a planning horizon.

30. The system of claim 29, wherein the inventory salvage values are specified as excess inventory salvage value as a percentage of scenario price.

31. A procurement risk management system comprising:

a graphical user interface comprising;

at least one demand forecast scenario window comprising information relating to high, base, and low demand forecast scenarios over time for at least one resource;

at least one price forecast scenario window comprising information relating to high, base, and low price forecast scenarios over time for the at least one resource;

at least one availability scenario window comprising information relating to high, base, and low availability forecast scenarios over time for the at least one resource;

at least one sourcing option window; and

at least one sourcing cost window for displaying one or more sourcing cost metrics;

wherein the graphical user interface receives inputs specifying forecast scenarios for demand, price, and availability for the at least one resource in respective forecast scenario windows;

receives inputs specifying one or more forward contracts in a sourcing portfolio for procuring the at least one resource from respective suppliers in respective sourcing option windows; and

reports one or more metrics for evaluating the sourcing portfolio; and

a calculation engine receiving inputs from the graphical user interface, wherein the calculation engine operates to;

receive the inputs from the graphical user interface;

calculate an optimal resource sourcing mix based on the received inputs and the sourcing portfolio;

calculate one or more metrics for evaluating risk in the sourcing portfolio based on the calculated optimal resource sourcing mix; and

calculate the one or more sourcing cost metrics based on the optimal resource sourcing mix;

wherein the calculation engine generates reports comprising the one or more metrics for evaluating risk in the sourcing portfolio; and

wherein the at least one resource is procured based on the generated reports and controls an inventory level of components or finished products.

32. The system of claim 31, wherein the sourcing cost window contains for each of multiple scenarios a row for displaying net present value of material cost for the optimal resource souring mix and for a buy-at-market sourcing strategy.

33. The system of claim 32, wherein the sourcing cost window comprises a details button selectable by a user to cause the graphical user interface to display a set of material cost report buttons selectable by the user to cause the graphical user interface to display corresponding material cost reports.

34. The system of claim 33, wherein the set of material cost report buttons includes buttons to display reports for a graph of net present value of material cost over time for each scenario, a distribution of net present value of material cost, a distribution of material cost improvement of the optimal resource souring mix relative to the buy-at-market sourcing strategy, and a graph of unit costs over time for the optimal resource sourcing strategy and the buy-at-market sourcing strategy.

35. The system of claim 31, wherein the sourcing cost window contains for each of multiple scenarios a row for displaying net present value of shortage cost for the optimal resource souring mix and for a buy-at-market sourcing strategy.

36. The system of claim 32, wherein the sourcing cost window comprises a details button selectable by a user to cause the graphical user interface to display a set of shortage cost report buttons selectable by the user to cause the graphical user interface to display corresponding shortage cost reports.

37. The system of claim 33, wherein the set of shortage cost report buttons includes buttons to display reports for a graph of net present value of shortage cost over time for each scenario, a distribution of net present value of shortage cost, a distribution of shortage cost improvement of the optimal resource souring mix relative to the buy-at-market sourcing strategy, and a graph of shortage units over time for the optimal resource sourcing strategy and the buy-at-market sourcing strategy.

38. The system of claim 31, wherein the sourcing cost window contains for each of multiple scenarios a row for displaying net present value of inventory cost for the optimal resource souring mix and for a buy-at-market sourcing strategy.

39. The system of claim 32, wherein the sourcing cost window comprises a details button selectable by a user to cause the graphical user interface to display a set of inventory cost report buttons selectable by the user to cause the graphical user interface to display corresponding inventory cost reports.

40. The system of claim 33, wherein the set of inventory cost report buttons includes buttons to display reports for a graph of net present value of inventory cost over time for each scenario, a distribution of net present value of inventory cost, an inventory cost breakdown for the optimal resource souring mix, inventory stock levels for each of multiple scenarios, inventory stock value, and proceeds from sale of excess inventory.

41. The system of claim 31, wherein the sourcing cost window has a location for displaying net present value of other cash flows for the optimal resource sourcing mix.

42. The system of claim 31, wherein the sourcing cost window contains for each of multiple scenarios a row for displaying net present value of total cost for the optimal resource souring mix and for a buy-at-market sourcing strategy.

43. The system of claim 32, wherein the sourcing cost window comprises a details button selectable by a user to cause the graphical user interface to display a set of total cost report buttons selectable by the user to cause the graphical user interface to display corresponding total cost reports.

44. The system of claim 33, wherein the set of total cost report buttons includes buttons to display reports for a graph of net present value of total cost over time for each scenario, a distribution of net present value of total cost, a distribution of total cost improvement of the optimal resource souring mix relative to the buy-at-market sourcing strategy, and a graph of total unit costs over time for the optimal resource sourcing strategy and the buy-at-market sourcing strategy.

45. The system of claim 31, wherein the sourcing cost window contains for each of multiple scenarios a row for displaying margin values for the optimal resource souring mix and for a buy-at-market sourcing strategy.

46. The system of claim 31, wherein the sourcing cost window has a location for displaying a probability of lower margin for the optimal resource sourcing mix relative to a buy-at-market sourcing strategy.

47. The system of claim 31, wherein the sourcing cost window contains for each of multiple scenarios a row displaying purchase quantity for each contract specified in the sourcing portfolio and for a buy-at-market sourcing strategy.

48. The system of claim 31, wherein the sourcing cost window contains for each of multiple scenarios a row displaying inventory units used to meet demand in each period of a planning horizon.

49. The system of claim 31, wherein the sourcing cost window contains for each of multiple scenarios a row displaying in each period of a planning horizon residual demand after a first of the contracts specified in the sourcing portfolio.