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Shared Complex Configured Hardware Manufacturing Process between supplier and customer Disclosure Number: IPCOM000234010D
Publication Date: 2014-Jan-07
Document File: 3 page(s) / 35K

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A mechanism is created to selectively outsource assembly of an order specific subset of the manufacturing bill of material, particularly for complex configured products. The method further enables receipt and payment for the unlimited number of underlying material contained within the assembly, via a single receipt transaction. Finally, the method synchronizes manufacturing activity of the customer and supplier for each order that is (partially) sourced to the supplier. The method allows the manufacturer (customer) to source a majority of the procurement, materials management, and assembly operation activity to another party, while still maintaining control of elements of the manufacturing process deemed critical to retain.

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Shared Complex Configured Hardware Manufacturing Process between supplier and customer


Companies that offer physical products look to optimize their end-to-end (e2e) supply chains. This typically results in portions of the e2e supply chain being outsourced to suppliers that specialize in some aspect of supply chain management. Specifically, for product manufacture there are two general approaches.

One approach is to keep final assembly or manufacture of a product in-house, while



variations, in this case, the supplier is typically responsible for determining which pieces to make versus which to buy. Regardless, they are responsible for creating the finished goods.

Approach 2 is often not feasible for companies. For example, there may be pieces of the product or the manufacturing process (intellectual property) that the company does not want to expose to a supplier. Other restricting reasons could be limited availability of supplier skills, product complexity, or quality control. Once excluding approach 2 as an option, the company is left with only approach 1. However, when dealing with products that have a highly variable offering, e.g. large Mainframe servers, approach 1 becomes very restrictive. This is because it can be impractical, if not impossible, to release part numbers for all possible configurations that need to be procured. Stated another way, there was no way to efficiently procure, for mass production, subassemblies that are not released as part numbers. Furthermore, there was no way to do so selectively. (In other words, the company cannot decide on a case-by-case basis which Final Product Orders to outsource and which to build in house).

Known solutions

The only known solution is to create a purchase order per unique subassembly. This is simply not a feasible approach for mass production of highly configurable products. Product release and Manufacturing Requirements Planning (MRP) systems cannot practically handle this solution for highly variable complex configured product offerings,

i.e. cannot have a uniquely identified assembly part number for every possible configuration.

Why additional solution is required
In a highly configurable product environment, such as for High-End Mainframe Servers, no solution existed to effectively outsource build-to-order (BTO) entities up to a point where the BTO asset transfer occurs to the main company for additional configuration. If the company had to protect technology (intellectual property) and final configuration test prior to shipping to the field customer, the only solution was to keep manufacturing in its entirety in-house. No solution previously existed that could take highly variable BTO structures, handle complex conversions between sales/ordering nomenclature to manufacturing nomenclature, determine the subset of part content and manufacturing


outsourcing some pieces or subassemblies needed for the end product. Part numbers are released for each of...