Abstract:
A system that can determine shortage costs in a repeatable and sustainable manner. In certain embodiments, the system takes into account different shortage costs that impact different organizations and weight those shortage costs against the costs to expedite material in to cover those shortages. Additionally, in certain embodiments, the system can continue to be updated based on changing needs of the business and to reflect a true impact of unit shortages so accurate expedite decisions can continue to be made and accounted for that are of the most economic benefit to a manufacturer.

Description:
BACKGROUND OF THE INVENTION 
       [0001]    1. Field of the Invention 
         [0002]    The present invention relates to information handling systems and more particularly to a system for determining shortage costs. 
         [0003]    2. Description of the Related Art 
         [0004]    As the value and use of information continues to increase, individuals and businesses seek additional ways to process and store information. One option available to users is information handling systems. An information handling system generally processes, compiles, stores, and/or communicates information or data for business, personal, or other purposes thereby allowing users to take advantage of the value of the information. Because technology and information handling needs and requirements vary between different users or applications, information handling systems may also vary regarding what information is handled, how the information is handled, how much information is processed, stored, or communicated, and how quickly and efficiently the information may be processed, stored, or communicated. The variations in information handling systems allow for information handling systems to be general or configured for a specific user or specific use such as financial transaction processing, airline reservations, enterprise data storage, or global communications. In addition, information handling systems may include a variety of hardware and software components that may be configured to process, store, and communicate information and may include one or more computer systems, data storage systems, and networking systems. 
         [0005]    Information handling systems are fabricated using multiple components arriving from multiple locations. Additionally, an information handling system manufacturer can make use of multiple manufacturing locations, which can be geographically dispersed. Additionally, with manufacturers, such as information handling system manufacturers, inbound supply chain and product line expansion can result in a growing coordination complexity which can result in increasing expedite spend to satisfy consumer and manufacturing needs. 
         [0006]    For example, an information handling system manufacturer can have over 100 buyers supporting a plurality of different regions reviewing a large number (e.g., hundreds) of supply lines every day. One responsibility of the buyers is to communicate potential shortages and action plans in a timely manner. This responsibility can be especially challenging in an environment that does not provide the buyer with the autonomy to support their commodities without agreement being reached by different organizations where each organization can have differing objectives. 
         [0007]    Accordingly, it would be desirable to provide a system that can determine shortage costs in a repeatable and sustainable manner. It would be further desirable to provide such a system that can take into account different shortage costs that affect different organizations and weight those shortage costs against the costs to expedite material in to cover those shortages. 
       SUMMARY OF THE INVENTION 
       [0008]    In accordance with the present invention a system, which can determine shortage costs in a repeatable and sustainable manner, is set forth. Additionally, in certain embodiments, the system takes into account different shortage costs that influence different organizations and weight those shortage costs against the costs to expedite material in to cover those shortages. Additionally, in certain embodiments, the system can continue to be updated based on changing needs of the business and to reflect a true impact of unit shortages so accurate expedite decisions can continue to be made and accounted for that are of the most economic benefit to a manufacturer. 
         [0009]    Such a system allows buyers to execute a regular (e.g., a daily) model that can review supply lines and recommend expedite moves that are provide an economic benefit to the information handling system manufacturer. Such a system also provides the buyers with an avenue for reporting a total cost for material, including any expediting cost) as well as a total estimated savings based on that shortage cost to their management teams. 
         [0010]    In one embodiment, the invention relates to a method for determining shortage costs relating to delay in component shipments that includes associating a plurality of factors with a component, analyzing the plurality of factors within a shortage cost model to quantify a shortage cost associated with the plurality of factors where the analysis provides a quantified shortage cost associated with the component, and using the quantified shortage cost to determine whether to expedite shipment of the component. 
         [0011]    In another embodiment, the invention relates to an apparatus for determining shortage costs relating to delay in component shipments that includes means for associating a plurality of factors with a component, means for analyzing the plurality of factors within a shortage cost model to quantify a shortage cost associated with the plurality of factors where the analysis provides a quantified shortage cost associated with the component, and means for using the quantified shortage cost to determine whether to expedite shipment of the component. 
         [0012]    In another embodiment, the invention relates to a computer-readable storage medium storing computer program code for determining shortage costs relating to a delay in component shipments. The computer program code includes computer executable instructions configured for associating a plurality of factors with a component, analyzing the plurality of factors within a shortage cost model to quantify a shortage cost associated with the plurality of factors where the analysis provides a quantified shortage cost associated with the component, and using the quantified shortage cost to determine whether to expedite shipment of the component. 
     
    
     
       BRIEF DESCRIPTION OF THE DRAWINGS 
         [0013]    The present invention may be better understood, and its numerous objects, features, and advantages made apparent to those skilled in the art by referencing the accompanying drawings. The use of the same reference number throughout the several figures designates a like or similar element. 
           [0014]      FIG. 1  shows a block diagram of an environment for managing shortages. 
           [0015]      FIG. 2  shows a block diagram of a part attach rate analysis from component to factory. 
           [0016]      FIG. 3  shows a time line of a part shortage analysis for a part from receipt of an order to completion of the order. 
           [0017]      FIG. 4  shows a block diagram of an information handling system having components managed via the environment for managing shortages. 
       
    
    
     DETAILED DESCRIPTION 
       [0018]    Referring to  FIG. 1 , a block diagram of an environment  100  for managing shortages is shown. More specifically, the environment  100  includes a data source portion  110 , an analysis portion  112 , an input portion  114 , a model application portion  116 , and an output portion  118 . The data source portion  110  includes a plurality of data sources including a part attach rate module  120 , a geographic build module  122 , a financial analysis module  124 , a profit watch portion  126 , a customer loyalty portion  128 , data queries from data warehouse module  130  and an operational expense module  132 . 
         [0019]    The part attach rate module  120  delineates what percentage of the time a particular product (e.g., 15″ Flat Panel Monitor) is used on a particular information handling system. The geographic build module  122  tracks manufacturing locations and provides data regarding what types of systems are being built at which geographic location. The financial analysis module  124  provides data relating to labor costs, Units per Labor Hour (ULH) and Units per Hour (UPH). The profit watch module  126  generates data relating to revenue and margin for each system implicated by potential shortages. The customer loyalty module  128  generates data relating to customer loyalty for each system implicated by potential shortages. The data module  130  provides data related to customer experience, including but not limited to, customer cancellations, inbound and outbound telephone calls, times and frequencies, customer concessions, and the likelihood to repurchase analysis. The operational expense module  132  generates operational data for each system implicated by potential shortages. 
         [0020]    The analysis portion  112  includes a statistical analysis module  140 . The statistical analysis module  140  receives information from the profit watch financials module  128 , the customer loyalty module  128  and the data warehouse module  130  and performs a statistical analysis on this data to determine how customer behavior relationships relate to increased lead time. 
         [0021]    The input portion  114  includes a part breakdown module  150 , a cost of factory module  152 , a cost of cancellations module  154 , a cost of lost sales module  156 , a cost of inbound calls module  158 , a cost of outbound calls  160  and a cost of concessions module  162 . The part breakdown module  150  uses the part attach rate data provided by the part attach rate module  120  and the geographic build data provided by the geographic build module  122  and generates a parts breakdown (i.e., an attach rate) by line of business (LOB) and by manufacturing facility. The cost of factory module  152  uses the geographic build module  122  and the financial analysis module  124  to compute the cost a factory experiences by not being able to build systems in the most cost effective geographic location. The cost of cancellations module  154  uses date provided by the profit watch financial module  126  to determine how many cancellations have occurred and to assign a cost to the cancellations. The cost of lost sales module  156  uses data provided by the profit watch financials module  126  and the customer loyalty module  128  to generate a cost of lost sales (current and future). The cost of inbound calls module  158  uses data provided by the profit watch financials module  126  and the operational expenses module  132  as well as the information generated by the statistical analysis module  140  to generate information relating to a cost of inbound calls (i.e., a cost relating to frustrated customers contacting a manufacturer for status updates on their delayed systems). The cost of outbound calls  160  uses data provided by the operational expenses module  132  as well as the information generated by the statistical analysis module  140  to generate information relating to a cost of outbound calls (i.e., a cost relating to automated calls from a manufacturer to customers alerting them there will be a delay in the originally communicated estimated time of delivery (ETA) for their system). The cost of concessions module  162  uses data provided by the operational expenses module  132  as well as the information generated by the statistical analysis module  140  to generate information relating to a cost of concessions (i.e., a cost relating to upgrades and/or free products that a customer service representative is authorized to provide to the customer in an effort to retain the customer&#39;s business and loyalty. 
         [0022]    The model application portion  116  includes a financial impact analysis module  170 . The financial impact analysis module  170  receives inputs from the part breakdown module  150 , the cost of factory module  152 , the cost of cancellations module  154 , the cost of lost sales module  156 , the cost of inbound calls module  158 , the cost of outbound calls  160  and the cost of concessions module  162 . The financial impact analysis module  170  generates data relating to an expected financial impact relating to inbound supply shortages to a manufacturer. The data is broken down by part and by facility. 
         [0023]    The financial impact analysis module  170  takes into account a plurality of factors when generating data relating to an expected financial impact. More specifically, in certain embodiments, the financial impact analysis module  170  generates the data using a financial impact model. 
         [0024]    More specifically, for a Factory F, for j days late: 
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         [0025]    Where,
       L is a line of business,   F is a facility,   A L  is the attach rate of a part to a line of business,   C Lj  is a customer cost for a line of business L that is j days late,   Xj is the number of arts that are j days late,   ULH is a units per labor hour,   CLH(OT) is a cost per labor hour for overtime,   CLH is a cost per labor hour, and   G FL  is a geographic build percent of a line of business L in a facility F       
 
         [0035]    The output portion  118  includes a dynamic replenishment module  180 . The dynamic replenishment module  180  receives the data relating to expected financial impact relating to inbound supply shortages and generates a dynamic replenishment plan. The dynamic replenishment plan determines when a supply shortage is of such a cost that rerouting of supplies at a cost of X will be less of an economic impact than the impending shortage situation. 
         [0036]    Referring to  FIG. 2 , a block diagram of a part attach rate analysis from individual part (also referred to as a component) extrapolated down to a factory at which a system using the component as fabricated is shown. More specifically, a particular part  210  (e.g., part XYZ) can be used for manufacturing systems at a plurality of factories  220   a ,  220   b ,  220   c ,  220   d  (generally referred to as factory  220 ) which can be located at geographically disperse locations. Additionally, each factory may include one or a plurality of manufacturing lines. The part  210  can be used in one or more lines of business  230   a ,  230   b , and  230   c . Each line of business  230  can include consumer type customers  240  as well as relationship type customers  250 . 
         [0037]    The environment for managing shortages  100  takes a plurality of factors into account based upon how the part is used by a line of business, whether the customer is a consumer type customer or a relationship type customer and a factory in which the component is to be used. For example, a particular part might have a certain attach rate percentage for the line of business  230   a  while the same part might have different attach rate percentages for the lines of business  230   b  and  230   c . Additionally, each line of business might have a certain attach rate percentage for consumer type customers  240  for that line of business and a different attach rate percentage for relationship type customers  250 . Additionally, each factory  250  might have certain part requirements based upon a number of systems to be manufactured at that factory. An attach rate relates to an amount of time a product is used in a certain area (i.e., attach rate to a system, a line of business, and a factory). 
         [0038]      FIG. 3  shows a time line of a part shortage analysis for a part from receipt of an order to completion of the order. More specifically, there are a plurality of types of customers that are taken into account when performing a part shortage analysis. For example, certain types of customers, characterized as unsure customers  310 , do not place an order due to a stated lead-time. Other types of customers, characterized as anxious customers  312 , might cancel an order when they receive notification of a delay in production of their order. Other types of customer, characterized as frustrated customers  314 , might cancel their order when a committed ship date passes without receipt of their order. The system for managing shortages recognizes that the impact of a parts shortage can vary across the order timeline. For example, an unsure customer  310  might not purchase a system due to a lead-time that is indicated when the system is configured during an order entry stage  320 . 
         [0039]    After an order is entered at the order entry stage  320 , the order is held by the system pending release at stage  322 . The time difference between when an order is entered at stage  320  and an order enters production at stage  324  is the time during which the order is pending release  322 . One example of a reason why an order is held is due to a parts shortage. The time that an order is held pending release can cause an anxious customer  312  to cancel their order. 
         [0040]    When an order enters production at stage  324 , the next checkpoint is a traveler pull (TP) stage  330 . The traveler pull stage  330  is where all of the components to fabricate a system are available and so the components are kitted and fabrication of the system begins. Supply constraints can affect the traveler pull stage resulting in an extended lead-time traveler pull stage  332 . The supply constraints can be characterized as in production (IP) minus traveler pull (TP). 
         [0041]    When a system completes fabrication, the completion is characterized as a ship to commit stage  340 . Supply constraints can affect the ship to commit stage resulting in an extended lead-time ship to commit stage  342 . Extending the lead-time of the ship to commit stage  342  can cause a frustrated customer  314  to cancel their order. Such a cancellation can be especially costly to a manufacturer, as the system has essentially been completed at this point. 
         [0042]    The final stage of the order timeline is the ship-completed stage  350 . The ship-completed stage  350  is the point at which the system is finished being fabricated and ships to the customer. How the supply constraints affect work in process (WIP) can be characterized as traveler pull (TP) stage minus the ship completed (SC) stage. Extending the time of the work in process can also result in a frustrated customer  314 . 
         [0043]    Referring briefly to  FIG. 4 , a system block diagram of an information handling system  400  having components managed via the environment for managing shortages is shown. The information handling system  400  includes a processor  402 , input/output (I/O) devices  404 , such as a display, a keyboard, a mouse, and associated controllers, a memory  406  including volatile memory such as random access memory (RAM) and non-volatile memory such as a hard disk and drive, and other storage devices  408 , such as an optical disk and drive and other memory devices, and various other subsystems  410 , all interconnected via one or more buses  412 . One example of another storage device  408  is a virtual appliance USB key  420 . 
         [0044]    For purposes of this disclosure, an information handling system may include any instrumentality or aggregate of instrumentalities operable to compute, classify, process, transmit, receive, retrieve, originate, switch, store, display, manifest, detect, record, reproduce, handle, or utilize any form of information, intelligence, or data for business, scientific, control, or other purposes. For example, an information handling system may be a personal computer, a network storage device, or any other suitable device and may vary in size, shape, performance, functionality, and price. The information handling system may include random access memory (RAM), one or more processing resources such as a central processing unit (CPU) or hardware or software control logic, ROM, and/or other types of nonvolatile memory. Additional components of the information handling system may include one or more disk drives, one or more network ports for communicating with external devices as well as various input and output (I/O) devices, such as a keyboard, a mouse, and a video display. The information handling system may also include one or more buses operable to transmit communications between the various hardware components. 
         [0045]    The present invention is well adapted to attain the advantages mentioned as well as others inherent therein. While the present invention has been depicted, described, and is defined by reference to particular embodiments of the invention, such references do not imply a limitation on the invention, and no such limitation is to be inferred. The invention is capable of considerable modification, alteration, and equivalents in form and function, as will occur to those ordinarily skilled in the pertinent arts. The depicted and described embodiments are examples only, and are not exhaustive of the scope of the invention. 
         [0046]    For example, the above-discussed embodiments include software modules that perform certain tasks. The software modules discussed herein may include script, batch, or other executable files. The software modules may be stored on a machine-readable or computer-readable storage medium such as a disk drive. Storage devices used for storing software modules in accordance with an embodiment of the invention may be magnetic floppy disks, hard disks, or optical discs such as CD-ROMs or CD-Rs, for example. A storage device used for storing firmware or hardware modules in accordance with an embodiment of the invention may also include a semiconductor-based memory, which may be permanently, removably, or remotely coupled to a microprocessor/memory system. Thus, the modules may be stored within a computer system memory to configure the computer system to perform the functions of the module. Other new and various types of computer-readable storage media may be used to store the modules discussed herein. Additionally, those skilled in the art will recognize that the separation of functionality into modules is for illustrative purposes. Alternative embodiments may merge the functionality of multiple modules into a single module or may impose an alternate decomposition of functionality of modules. For example, a software module for calling sub-modules may be decomposed so that each sub-module performs its function and passes control directly to another sub-module. 
         [0047]    Consequently, the invention is intended to be limited only by the spirit and scope of the appended claims, giving full cognizance to equivalents in all respects.