GB2372852A

GB2372852A - Product ordering system

Info

Publication number: GB2372852A
Application number: GB0124135A
Authority: GB
Inventors: Behnam Mehmanpazir
Original assignee: Hewlett Packard Co
Current assignee: HP Inc
Priority date: 2000-10-12
Filing date: 2001-10-08
Publication date: 2002-09-04
Also published as: GB0124135D0; JP2002133222A

Abstract

A request for a product is first received by the vendor. If the first product is available (208), an order form specifying the first product is presented to the customer for authorization. If the first product is unavailable, then an order form specifying a substitute product in lieu of the first product is automatically presented to the customer for authorization. The order form is then processed in response to authorization by the customer.

Description

SYSTEM AND METHOD FOR SUBSTITUTING PRODUCTS AND SERVICES FOR

INCREASING PURCHASING EFFICIENCY

10 FIELD OF THE INVENTION

The present invention generally relates to vendors suppting products and services to customers and, more particularly, to a computer implemented method and system for ordering products and services.

15 BACKGROUND OF THE INVENTION

Vendors and service providers have been supplying products and services to their customers via storefronts, remote warehouse locations or via catalogs for many years. Most ofthe communications for placing orders or requesting services had been traditionally conducted by telephone, by facsimile transmissions, by courier or by mail. Due to capacity 20 constraints, high demand cycles, transportation problems, lack of qualified personnel or equipment (for service providers) or the like, certain requested products or services result in "stock out" or "booked" situations. In these cases, customers typically must wait until stocking levels are replenished before ordering the requested product or must wait until more service professionals become available to provide the service.

25 In an attempt to plan ahead and reduce some of the uncertainties of the receiving ordered product on time, some customers have connected their purchasing systems with the computer-based inventory systems of vendors and service providers. This has helped to reduce ordering errors, reduce the time to order products and to reduce the time for receiving the product. However, this approach does not provide a solution to the customer when a 30 requested product is currency not in inventory and product availability is unknown.

During "stock out" or "booked" situations, vendors and service providers (hereinafter the discussion of vendors and products includes service providers and services) run the risk of losing an immediate sale. They also run the greater risk of providing an opportunity to a competitor that has a similar product on the shelf that is available for immediate purchase by

r the customer. This situation is more of a problem when the product being sought is a commodity and differences between vendors are minimal. Where the products are custom made or have highly specific applications, the lack of available product and lack of viable options leave customers vulnerable to losing opportunities that they have access to. The 5 foregoing illustrates that traditional ordering methods lack the interactive component between the vendor and the customer necessary to delve further into the needs of the customer.

Where there is an interactive environment for placing orders, it is possible to determine whether or not the customer is willing to wait for the requested product, especially when the replenishment time period is short with respect to the time in which he needs the I O product. Where the time is more critical, the customer may be willing to consider more expensive options to solve the problem. Nevertheless, even where an interactive environment exists between the customer and the vendor, emotions unbeknownst to the vendor may be a factor in losing current or future sales. In offering a more expensive option to the customer, the vendor views his efforts as providing a solution to the customer. The customer, on the 15 other hand, perceives the vendor's "solution" as having to pay a penalty for the vendor's lack of planning and foresight in not having the product available for immediate pick-up or delivery. A system and method that address the aforementioned problems, as well as other related problems, are therefore desirable.

SUMMARY OF THE INVENTION

The present invention is directed to addressing the above and other needs in connection with providing a substitute product or service where the initially requested product or service is unavailable, but the vendor is desirous of meeting the needs of the 25 customer.

According to one aspect of the invention, a computer-implemented interactive method and system for ordering products having associated costs includes receiving an order for a first product. If the first product is available, then an order form specifying the first product is presented to the customer for authorization. If the first product is unavailable, then an 30 order fonn specifying a substitute product in lieu of the first product is automatically presented to the customer for authorization. The order form is then processed in response to authorization by the customer.

According to another aspect of the invention, a computer-implemented interactive method and system for selecting products having associated costs includes providing a

database of products that includes the availability of the products in inventory. A request is then processed for a first product. If the first product is available, the first product is then displayed on a user interface. If the first product is unavailable, then a compatible substitute having the least highest cost greater than the cost of the first product is automatically selected 5 and the substitute product is displayed on the user interface in lieu of the first product.

It will be appreciated that various other embodiments are set forth in the Detailed Description and Claims that follow.

BRIEF DESCRIPTION OF THE DRAWINGS

10 Vanous aspects and advantages of the invention will become apparent upon review of the following detailed description and upon reference to the drawings in which:

FIG. I illustrates a bloclr diagram of a computer-implemented interactive system for ordering products in accordance with an example embodiment of the invention; FIG. 2 is a flowchart illustrating the manner of ordering products via the computer 15 implemented system in accordance with an example embodiment of the invention; and FIG. 3 is a flowchart illustrating the manner of selecting a suitable substitute product in accordance with an example embodiment of the invention.

While the invention is amenable to various modifications and alternative forms, specifics thereof have been shown by way of example in the drawings and will be destined 20 in detail. It should be understood, however, that the intention is not to limit the invention to the particular embodiments described. On the contrary, the intention is to cover all modifications, equivalents, and alternatives falling within the spins and scope of the invention as defined by the appended clahns.

25 DETAILED DESCRII ION

Various embodiments of the present invention are described in terms of interactive systems for ordering products and services where the immediacy of the final purchasing decision closely follows the initial product request. It has been discovered that a need exists to provide solutions to a customer's request that is virtually instantaneous where the initial 30 request can not be fulfilled and the vendor is desirous of consummating a sale that is mutually beneficial to the customer and vendor. Those skilled in the art will appreciate that the invention could be implemented in a variety of programming languages and computer platforms.

In an example embodiment, the computer-implemented interactive system for ordering products is adapted to receive an order for a first product. If the first product is available, then an order form specifying the first product is presented to the customer for authorization. If the first product is unavailable, then an order form specifying a substitute 5 product in lieu of the first product is automatically presented to the customer for authorization. The system is programmable by the vendor to automatically search the ordering system for a similar product or a product upgrade. Once the substitute product is found the substitute product is offered to the customer virtually immediately without having to display a "stock out" message on a user interface. The order form is then processed in 10 response to authorization by the customer.

The ordering system of the present invention allows the vendor to build in the flexibility necessary to minimize or eliminate loss of sale events that might otherwise occur should a "stock out" message be sent immediately after it is determined that the requested product is not in inventory. When applied in an on-line ordering or purchasing scenario, the 15 present approach offers a substantial reduction in unpredictability for the customer since the number of times that "stock out" messages are displayed will be significantly reduced. The customer in the p c ng mode is looking to fill a need; Me present invention increases the likelihood of fulfilling that need without a substantial increase in investment required by the vendor in order to offer this benefit to the customer.

20 Referring now to the figures, FIG. I illustrates a block diagram of a computer implemented interactive system 100 for ordering products in accordance with an example embodiment of the present invention. System 100 includes a database 102 having data elements 104-108, a vendor server system 110 and a customer or client system 120. In particular, database 102 includes an inventory data element 104 that stores the listing of all of 25 the products available for sale by the vendor and their availability in inventory (stock status).

Product availability status would include, for example, information on whether the product is in stock, the available quantity and the stocking location. In another embodiment, the replenishment or lead-time information would be available for those products that are not currently available on the inventory shelves. Lead-time information would include the period 30 of time it would take to have product physically available in inventory (days, weeks, months, etc.). Database 102 also includes a data element for cost information 106 that provides details of the cost of each of the products in inventory location 104.

A substitution data element 108 is also within database 102 that stores various substitution matrices as well as substitution rules that aid in determining which products will

be offered as substitutes. The substitution matrices identify selected products with one or more compatible substitutes or upgrades whenever available. The substitution rules compare the cost of products in cost element 106 that are selected as suitable substitutes for an originally requested, but out of stock, product.

S A customer or client requesting a product access the vendor's server system 110 typically through a client system 120 that is coupled through a communications channel 122 to server system 110. For example, the client system is a PC that is coupled to a network.

Communications channel 122, for example, is a hardwire or wireless connection that is made to server system 110 connectable through the Intemet or through a direct dial up system to 10 the vendor. The vendor server system 110 is coupled to database 102 through a communications channel 112 that is similar to channel 122.

Refernug now to FIG. 2, a flowchart 200 illustrates the manner of ordering products with associated costs via computer-implemented system 100 in accordance with an example embodiment of the invention. At 202, communications with the client application is first 15 established. In one example, communications are established via the Internet directly into a vendor's website or through a direct dial-up connection into the vendor's mainframe or server system as in FIG. I. At 204, a product selection interface is opened with the customer/client application in response to a customer request. At 206, a product selection request is received; from the customer application alter which a query is made at 208 of database 102 to 20 determine whether the product is available. If the product requested is available, the process flow proceeds to 210 and the product is specified for the order entry interface and a report is sent to the customer application. At 212, the product selection interface continues with tasks that include further product selections and shipping and payment transaction instructions.

Retuning to query 208, if the product requested is unavailable, the process flow 25 proceeds to 214 wherein a suitable product substitute selected via a decision loop illustrated in FIG. 3. A query is made at 216 whether a substitute product is available after proceeding through the flowchart in FIG. 3. If a substitute product is available, the process flow proceeds to 218 wherein a substitute product is specified for the order eatryinterface and a report is made to the customer application. In this example, a suggested substitute 30 product appears at the customer's user interface in lieu of the originally requested product.

The customer can then choose to proceed to 212 where the product selection interface continues with tasks that include farther product selections and shipping and payment transaction instructions necessary to complete the ordering process.

Referring now to FIG. 3, a flowchart 300 illustrates the manner of selecting a substitute product in accordance with an example embodiment of the invention. At 302, at least one or more substitute products are identified that correspond to the initially requested product that is currently out of stock. At this point the customer is not aware of the "stock 5 out" situation with respect to the requested product. The list of available substitutes is identified in substitute data element 108 and then at 304 the costs associated with each ofthe proposed substitutes is retrieved from cost data element 106. At 306, substitute products that are currently available in inventory are then identified from the original substitution matrix.

At 308, the cost difference between the available substitute products and the requested 10 product is then computed. The cost differences are then ranked from the least highest cost greater than the cost of the requested product to the most highest cost greater than the cost of the requested product. At 310, the least ofthe cost differences, that is the substitute product with the least highest cost greater than the cost of Me requested product, is selected to be presented to the customer.

1 S Prior to presenting the selected substitute product to the customer, a query is made at 312 to determine whether the cost difference of the selected substitute product is less than or equatto a predetermined orpredefmed threshold. If the cost dfflbrenoe is less than the selected threshold, then at 314 the substitute product with the least of the cost differences is selected. The process flow then returns to block 216 of FIG. 2 for eventual presentation of 20 the substitute product to the customer. However, if the substitute product selected is not in stock then the substitution rules of database 102 and data element 108 dictate that the substitute product with the next highest cost substitute be offered to the customer. The substitute product is offered conditioned on the cost difference not exceeding the originally selected threshold and the product being available in stock. In the example where the 25 decision loop leads to selecting a substitute product that has a cost difference that exceeds the selected threshold, then the process flow moves to 316 of FIG. 3 (as discussed further below).

Returning to the query at 312, if it is determined that the cost difference of the selected substitute product is greater than the predefined (or selected) threshold than the process flow proceeds to another query at 316. At 316, a secondary determination is made 30 whether the cost difference of We substitute products (computed above for the Initial cost comparison) is within a predetermined percentage of the cost of the requested product or is within a predetermined monetary range that is above the cost of the requested product. If the difference in cost is within the secondary criteria identified above, then at 318 a substitute product is selected along with an associated set of ordering parameters (or limits to) for

purchasing the substitute product. The process flow then returns to block 216 of FIG. 2 for eventual presentation of the substitute product to the customer with the ordering parameters.

In another embodiment, the criteria is defined as a percentage of the entire customer order or is defined as a favorable discount to a high volume/global customer (includes more intangible 5 factors or criteria that reward customer loyalty or enhance customer retention).

Returning to 316, if the difference in cost exceeds the secondary criteria, then the process flow proceeds to 320 indicating that a substitute product is not available. The process flow then proceeds back to 216 and then onto 220 for advising or reporting to the customer that the first (requested) product is not available or is "out of stock." The process flow then 10 proceeds to 212 wherein the product selection interface continues with tasks that include further product selections and shipping and payment transaction instructions.

Returning to 318 of Fig. 3, in this part of the process the vendor is willing to offer the customer a more costly alternative so long as the sale is conditioned on certain ordering parameters. The ordering parameters include one or more of a combination of factors that 15 include, but are not limited to: limiting the purchase of the product for a set period of time (days, weeks, months, etc.); setting a quantity limit that can be purchased at one time or during a period of time; and setting a minimum quantity purchase requirement for the substitute product. Other criteria include, for example, setting a percentage of the size of the order that the customer currently has that corresponds to a fixed monetary discount for a 20 substitute product. In another example, the customer is offered the substitute product if he is willing to increase the total purchase monetary value of the order to a predefined level.

In an alternative embodiment, additional substitution rules include: determining whether the requested product is substitutable; displaying time periods OF a user interface for.

replenishment of unavailable requested products; and advising the customer via a visual 25 prompt or message that other options are available to the customer, especially when an "out of stoclc" message has appeared. In one example embodiment, the visual prompt takes the form of any one of the following: pop up menu, a pop-up window, a displayed message and a displayed icon. In teens of post "stock out" options, in another example system the customer is advised of the availability of: higher cost substitute products offered with a predefined 30 discount; an interactive link with a customer service representative for improved interactive decision making; and information on the time period for replenishment of the unavailable requested or substitute products.

The following is an example application of the present invention wherein the customer is looking to purchase a DRAM product. The DRAM product types and PRICES

are displayed to the customer (in bold) while the STOCK (stocking levels) and COST columns are not displayed to the customer (only shown here for illustrative purposes): DRAM PRICE STOCK COST

4 MB $ 20 Available $ I O 8 MB $ 40 Out of Stock $ 20 16 MB $ 60 Out of Stock $ 30 32 MB $ 80 Available $ 40 64 MB $100 Available $ 50 10 In this example, the customer is interested in buymg the 8MB DRAM product.

Normally, the message received by the customer would be "out of stock" for the requested product and Me customer would need to close out the buying session with vendor A and start a new session with vendor B if the customer is still in urgent need of the product. The capabilities of the substitution logic of database 102 include providing an upgrade to the 15 customer or providing a substitute product based on compatibility. In this example, the product is upgraded to the next available substitute product at the next highest cost. The next available product would be the 16 DRAM, however this product is currently out of stock.

Based on the selected threshold by the vendor, the customer would either be advised at this point that the 8MB product is out of stock or the ordering system would automatically 20 proceed to evaluate the prospect of offering the 32MB product. In this example, because of the margins of DRAM products the vendor is in a position to upgrade the customer from an 8MB to a 32MB product at the same price as the 8MB product or at a discounted price of the 32MB product using the substitution logic described earlier. This leads to a win-win situation for the vendor and the customer: a profitable sale for the vendor and a satisfied 25 customer that has used his time efficiently in dealing with this particular vendor In a related application, a customer chooses to work directly with the vendor's customer service representative in requesting products and in placing orders. Using the computer-implemented interactive system for selecting products of the present invention, in

this environment, will improve time efficiency and will increase sales per representative due to the number of solutions that are presented to the customer. The customer representative has at their disposal a database of products that includes the availability ofthe products in inventory. When processing a customer request for a first product, if the first product is 5 available then the first product is displayed on a user interface. If the first product is unavailable, then a compatible subshtute product is automatically selected having the least highest cost greater than the cost of the first product and the substitute product is displayed on the user interface in lieu of the first product. This provides the customer service representative with options for providing continuous positive feedback to the customer and 10 keeps the customer engaged longer to ensure that a sale is consummated. In this application, several levels of criteria similar to the earlier described embodiments are made available to the customer service representative in the ordering system.

The present invention is believed to be applicable to a variety of product and catalog ordering systems. The present invention has been found to be particularly applicable and 15 beneficial in scenarios involving on-line purchasing or direct dial inquiries into vendor inventory systems that currently have limited capabilities. Other aspects and embodiments of the present invention will be apparent to those sldlled in the art from consideration of the specification and practice of the invention disclosed herein. It is intended that the

specification and illustrated embodiments be considered as examples only, with a true scope

20 and spirit of the invention being indicated by the following claims.

Claims

What is claimed is: 1. A computer-implemented interactive method for ordering products having associated costs, the method comprising: receiving an order (206) for a first product; if the first product is available, then presenting for customer authorization an order form specifying the first product (210); and if the first product is unavailable, then automatically presenting for customer authorization an order form (218) specifying a substitute product in lieu of the first product; and processing the order form (212) in response to authorization by the customer.
2. The method of claim 1, wherein the substitute product is of greater cost than the first product (314).
3. The method of claim 2, further comprising if a substitute product having a greater cost than the first product is unavailable, then notifying the customer Mat the first product is unavailable (220).
4. The method of claim 2, wherein if there exists a plurality of substitute products with costs greater than the cost of the first product, the substitute product specified on the order form is one of the plurality of substitute products having a cost that results in a least one of differences between the costs of the plurality of substitute products and the cost of the first product (314).
5. The method of claim 1, further comprising: if the first product is unavailable, Men prior to automatically presenting for customer authorization an order form specifying a substitute product, performing steps (a) - (c): (a) computing a difference in cost between the substitute product and the first product (308); 1 0

(b) if the difference in cost is less than a selected threshold, then presenting the order form specifying a substitute product (314); and (c) if the difference in cost is greater Man or equal to the selected threshold, then notifying the customer that the first product is unavailable (320).
6. The method of claim 5, further comprising: if the difference in cost is greater than or equal to the selected threshold, prior to notifying customer that the first product is unavailable, performing steps (d)-(e): (d) if the difference in cost is less than or equal to a predetermined percentage of the cost of the first product (312), then presenting the order form specifying a substitute product with an associated set of ordering parameters; and (e) if the difference in cost is greater than the predeterrmned percentage (320), then notifying the customer that the first product is unavailable.
7. The method of claims 2 or 6, wherein if there exists a plurality of substitute products with costs greater than the cost of the first product, the substitute product specified on the order form is one of the plurality of substitute products having a cost that results in a least one of differences between the costs of the plurality of substitute products and the cost of the first product (314).
8. An interactive system for ordering products having associated costs, the system composing: means for receiving an order for a first product (110); means for determining whether the first product is available (104) adapted to present for customer authorization an order form specifying the first product when the first product is available (210) and adapted to automatically presenting for customer authorization an order form specifying a substitute product in lieu of the first product when the first product is unavailable (218); and means for processing the order form (110) in response to authorization by the customer. 1 1