Feedback control theoretic parts inventory management model

A system for managing parts inventory based on feedback control theory for a parts supply chain, said parts supply chain being influenced by supply chain uncertainties, said system comprising:

• an inventory planning model that determines optimal inventory policy parameters for the parts supply chain based on predetermined inputs;
• a performance monitor that monitors the performance of the parts supply chain by measuring predetermined performance metrics;
• a supply chain visibility sub-system that monitors actual supply chain conditions of the parts supply chain;
• and
• a feedback controller responsive to the performance metrics, the actual supply chain conditions and the predetermined inputs, said feedback controller calibrating the inventory planning model based on the predetermined inputs, the performance metrics and the actual supply chain conditions.

A system for managing parts inventory based on feedback control theory for a parts supply chain, said parts supply chain including a supplier network, a parts distribution center, a dealer network and customers, wherein the supplier network supplies parts to the parts distribution center, the parts distribution center supplies part to the dealer network and the dealer network supplies parts to the customers, said system comprising:

• an inventory planning model that determines optimal inventory policy parameters for the parts supply chain based on predetermined inputs, said predetermined inputs including order forecasts for dealers and customers, nominal transit times and processing and handling times;
• a performance monitor that monitors the performance of the parts supply chain by measuring predetermined performance metrics, wherein the performance monitor measures off the shelf parts availability at the parts distribution center and the dealer network, the number of stock that is out, inventory turnover, expedited freight costs and generated revenue;
• a supply chain visibility sub-system that monitors actual supply chain conditions of the parts supply chain, said supply chain visibility sub-system monitoring inventory levels at the parts distribution center and the dealer network, demand from the dealer network and end customers, transit time in the parts distribution center, whether orders have been shipped, whether orders have been received and any delays;
• a feedback filter processor responsive to the performance metrics from the performance monitor and the actual supply chain conditions from the supply chain visibility sub-system, said feedback filter processor filtering the performance metrics and the actual supply chain conditions by putting the information on the performance metrics and the actual supply chain conditions in a predetermined format;
• and
• a feedback controller responsive to the filtered performance metrics, the filtered actual supply chain conditions and the predetermined inputs, said feedback controller calibrating the inventory planning model based on the predetermined inputs, the filtered performance metrics and the actual supply chain conditions and determining how often to calibrate the inventory planning model.