Financial flow business model for virtual vertically integrated network-based business

#The present invention relates to a financial flow business model for a virtually integrated business on the world wide web, or other network.

#Recently, a shift has occurred to outsource the main functions of a vertically integrated company. First, outsourcing occurred of the basic components that required little skill such as sheet metal and plastics. Then, more of the complex technical work was outsourced, such as the making and assembly of printed circuit boards in the electronics industry. Eventually, companies began to see that they could leverage outsourcing for the entire product, from sourcing the raw materials to the end product itself. However, as this outsourcing of the main functions took place, little attention was paid to how all of these functions would be connected and integrated together.

#As this outsourcing activity has occurred, one of the main flows, financial, has largely been neglected and has not been considered to be an active, or an integrated, component of any given supply chain. Costs are determined and modeled; however, the active participation of financial institutions and their integration into supply chain have, typically, not existed. The focus has been on the two other flows: information, and the movement of material and product. As a result, funding of the various components of a supply chain is independently accomplished with each element not integrated with the other. Delays in movement of financial transactions are nodes of inefficiency and add to the cost of the overall supply chain. In addition, determining the True Economic Cost (TEC) of any given supply chain and determining exactly where nodes of inefficiency exist are complicated and slow process.

#The accompanying drawings are incorporated in and constitute a part of this specification and, together with the description, explain the advantages and principles of the invention. In the drawings,

#FIG. 1 is a diagram of entities integrated within a virtual business;

#FIG. 2 is a diagram of a material and product flows within the virtual business;

#Three main virtual flows connect the various functions of a vertically integrated company together: material/product, information, and financial. All of the functions, for example, of a vertically integrated company can be outsourced including the connectivity functions, allowing businesses to focus on their core competencies and allowing other companies to purchase materials and services from sources that are more efficient than they are. Thus, the connectivity portion to be outsourced links all of the various global suppliers of manufacturing and delivery into one virtually integrated company.

#A fully integrated virtual enterprise system, consistent with the present invention, allows for these various global raw material sources and manufacturing entities to be combined into one as if they were one globally integrated company, with the main company entity, or contracting business, controlling and monitoring strategic main flows. The contracting business can have a fair measure of control and yet still take advantage of core competencies of other global operations. Core competencies of the contracting business, such as branding, development, product generation and development, alliance selection and qualification, and marketing are its main focus. Suppliers of operations and products can be selected from any source in the world, connected together virtually with the business model system, and function as a vertically integrated company.

#The virtual connections can occur, for example, over the Internet and world wide web using standard Internet communications protocols for connecting the various entities. Users can interact with the virtual business using, for example, conventional web browsers or other software platforms on computers or any processor-based machine. The interaction can occur over any wireline or wireless network using conventional network communication techniques.