WO2001067343A2

WO2001067343A2 - Method and apparatus for triggering electronic commercial transactions for surplus inventory or unscheduled parts needs

Info

Publication number: WO2001067343A2
Application number: PCT/US2001/006140
Authority: WO
Inventors: Irene W. Woerner
Original assignee: Supplyedge, Inc.
Priority date: 2000-02-28
Filing date: 2001-02-26
Publication date: 2001-09-13
Also published as: WO2001067343A9; TW504630B; AU2001241775A1

Description

S P E C I F I C A T I O N

TITLE OF THE INVENTION

Method And Apparatus For Triggering Electronic Commercial

Transactions For Surplus Inventory Or Unscheduled Parts Needs

BACKGROUND OF THE INVENTION

1) Field of the Invention

The field of the invention generally pertains to computer-implemented systems and methods for automatically identifying potential parts shortages and for facilitating electronic commerce for surplus inventory or unscheduled part needs over a distributed electronic network.

2) Background

In various manufacturing industries, it has long been a challenge to effectively manage and maintain inventories of parts needed to manufacture finished products. Large companies can have dozens or hundreds of products, each of which can have hundreds of separate parts, all of which need to be kept available at the correct point in the manufacturing cycle. Since a given product can be sold for many years, so long as a market for it exists, the manufacturer must be able to obtain the constituent parts for the product from the appropriate vendors year after year. Even after a product is no longer being manufactured, the purchaser of the product may need to obtain replacement parts for maintenance or repair long afterwards.

It is challenging enough in ordinary circumstances for large manufacturers to ensure that all of the parts needed to manufacture its products are available when needed. However, certain situations can lead to a shortage of parts necessary to complete a given product, or cause other complications. For example, when a supplier goes out of business or stops offering a part that is needed by the manufacturer, the manufacturer's ability to continue manufacturing its products may be put in jeopardy. The manufacturer is then left with the choice of having to re-design its product in mid-stream to use an alternative part, or else scramble to find another manufacturer that may happen to have an excess, unused supply of the needed part, or else discontinue manufacturing of the product. The search for an alternative source of the needed part in such circumstances may entail considerable effort and expense, and can cause delays in filling orders of the product even where the needed part is eventually located from an alternative source. Re-design of the product in mid-stream is also an expensive process which can cause frustrating delays in providing the end product to the manufacturer's customers.

Because the parts supply market is subject to occasional shortages due to such causes as suppliers going out of business or terminating production of parts needed by manufacturers, a brokering industry has developed to buy parts from manufacturers having excess supply, and to later sell those parts to manufacturers in need. Typically, brokers in this parts supply market speculate on the future availability of parts, and buy excess inventory from manufacturers who no longer need certain parts. Then, when a different manufacturer needs to acquire the parts because they are no longer available from the original supplier, the broker sells them to the manufacturer in need, often at a huge markup (e.g., ten times or more) because the manufacturer is caught in a difficult position. That is, the manufacturer is forced to locate what has become a potentially rare part in order to keep making its product, or else will be forced to re-design its product with an alternative parts. Because re-design is costly and will cause delays, the manufacturer is often willing to pay a premium for parts that, when available from the original supplier, or if directly purchased from the manufacturer having the excess supply, would have been far cheaper. The end result is that large profits are obtained by parts brokers, at the expense of manufacturers whose parts supply has been compromised by its original vendors going out of business, obsoleting needed parts, or for a variety of other reasons being unable to supply the manufacturer with parts in the required time frame.

Manufacturers having surplus inventories are typically unaware of other manufacturers in need of the excess parts or are not focused on actively getting rid of surplus parts. Therefore, manufacturers having such surpluses typically sell them to the parts brokers, who sell them at a substantial mark-up to the manufacturers in need. If the manufacturers having surplus inventories were aware of the manufacturers in need, then they could sell the excess parts directly to the manufacturers in need, without having to go through a middleman (i.e., the parts broker), and receive pricing more reflective of fair-

LA-184044.1 market value rather than the salvage-like pricing they receive today from brokers. Likewise, if the manufacturers in need were aware of manufacturers having surplus inventories, then they could buy the excess parts directly from the manufacturers having the surplus, similarly avoiding the middleman and presumably obtaining a better price because of the ability to purchase from a number of alternative sources having surplus inventories. However, since most manufacturers generally consider their parts lists to be sensitive information, only very limited knowledge of potentially available parts among manufacturers is publicly available, preventing manufacturers from exchanging parts without the use of a broker. The fragmented nature of the current parts market allows parts brokers to be the primary suppliers to the spot market for surplus parts, and generally requires that the buyers pay premium prices for obsoleted or hard-to-find parts, and that the sellers sell their excess, unneeded inventory at discounted prices.

Another related problem in the manufacturing industry occurs when parts used by a manufacturer in a given product are modified by the supplier. Typically, the supplier attempts to send a change notice to its customers (i.e., the manufacturers who purchase the part) notifying the customers that the part has been modified in certain respects. The manufacturer must then decide whether a re-design of its product incorporating the part is necessary in view of the changes to the part, whether the new part is compatible with the existing product as is, in which case no re-design effort is needed, or else whether stockpiling of the old version of the part is necessary to ensure future supply of the product. In the latter case, the manufacturer may need to obtain the old version of the part from other manufacturers having excess supply, if the original supplier no longer offers the old version of the part. However, the manufacturer may not be aware of which other manufacturers have an excess supply of the part, and again may need to go through parts brokers in order to find the needed part, paying a premium to do so.

To add to the difficulty of maintaining steady availability of parts for manufacturer's products, suppliers often are not aware of whom to contact at the manufacturer to notify that parts are being changed or obsoleted. Thus, even where suppliers attempt to contact manufacturers to which they have sold parts to notify them of changes or obsolescence of such parts, the personnel most needing the information at the manufacturer may never receive it, or may only receive the information after substantial delays.

LA-184044.1 Other causes of parts shortage include the placing of parts on allocation by suppliers, or a substantial change in lead time due to some disruption in the supply chain.

A system has been developed and deployed by the assignee of the present invention for providing automated notification of changed or obsolete parts to manufacturers, in conjunction with certain related services and information. The automated system as currently deployed may be explained with reference to FIGs. 1 and 2. The automated notification system 100 is illustrated by the block diagram of FIG. 1, and comprises a customer database 110 which is built up from information received from manufacturers (referred to generally as customers in FIG. 1). For each customer (i.e., manufacturer), the database 110 includes a qualified parts list in the form of an approved vendor list (ANL) 112, which specifies a particular vendor (i.e., supplier), vendor part identification number, and corresponding customer part identification number for each qualified part. A vendor that supplies multiple parts to a particular customer will have an entry in the ANL 112 for each part supplied. Similarly, if a part can be obtained from multiple sources, the same part may appear more than once in the ANL 112 in connection with different vendors. For each customer, the database 110 also generally includes one or more bills of material (BOMs) 113 which specify parts used on particular customer projects. Generally, one BOM 113 is associated with each customer project. Each BOM 113 specifies a "user" (i.e., person in charge of maintaining inventory at the manufacturer), "user preferences" (described in more detail below), and a list of specific parts which are utilized in the particular customer project. The specific parts in the BOM 113 are generally drawn from the ANL 112 or may include parts not listed on the ANL if the BOM represents a new design effort by the manufacturer.

When a particular part is to be changed or obsoleted, the vendor sends a vendor notice 120 specifying such to the automated notification system 100. The vendor notices 120 may be sent electronically over an electronic communications network (such as the Internet) to which the automated notification system 100 is connected, or can be received by some external means (e.g., regular mail) and manually entered into the automated notification system 100. An interface 160 provides the vendor notices 120 to a vendor notice format process 141, which results in the generation of internal vendor notice records 130 which are placed in a format useful for running later processes.

LA-184044.1 FIG. 2 illustrates a process flow 200 in accordance with the existing automated notification system 100. As shown in FIG. 2, in a first process step 201, vendor notices 120 are received by the automated notification system 100 as described above. In a next process step 202, the vendor notices 120 are converted by the vendor notice format process 141 to a format appropriate for an internal vendor notice record 130, if not already in such a format upon receipt. In a next process step 205, manual verification is performed on the internal vendor notice records 130 to ensure that the information contained therein is accurate. The manual verification step 205 is intended to catch manual data input errors in converting vendor notices 120 to internal vendor notice records 130, to weed out extraneous and potentially sensitive information included by the vendor (for example, customer information), and to otherwise ensure that the information contained therein is accurate.

In a next process step 206, the internal vendor notice records 130 are applied to the customer database 110 to determine if any manufacturers should be notified about the subject of the vendor notice 120. To this end, the internal vendor notice records 130 are processed using two filters. In a first process sub-step 207a, the internal vendor notice records 130 are run against the parts lists (i.e., BOMs 113 or ANL) for all of the customer projects of each customer in the database 110. In a second process sub-step 207b, the internal vender notice records 130 passing the first filter are run against a user preference filter, to weed out types of notices which the customer (or the particular manager of the customer project) is not interested in. For example, the customer may only be interested in end-of-life (EOL) notices, but may not want to be bothered about other types of notices. In such a case, the vendor notice 120 would not be sent to the customer.

In a final process step 208, a targeted vendor notice 150 in the form of a customized message is generated and sent to each customer for each vendor notice 120 which passed both filtering steps 207a, 207b. The targeted vendor notices 150 are typically sent to the customers over the electronic network to which the automated notification system 100 is connected.

The automated notification system 100 shown in FIG. 1 may also generate reports indicating the past history of parts changes and obsolesences, by a process 300 as shown in FIG. 3. In a first step 301, a BOM or ANL113 for a particular customer project is retrieved. The BOM or ANL data is then formatted in step 302, and in a next step 305 a

LA-184044.1 search of internal vendor notice records 130 corresponding to the parts of the BOM or ANL 113 is conducted, resulting in a list of parts which have been changed or obsoleted. In a next step 306, the resulting list is filtered against the user preferences, to select only those vendor notice records 130 which the customer is interested in (for example, the customer may only be interested in obsolescence notices). In a final step 307, a historical report 132 is generated, and then forwarded to the customer in the form of a historical report message 151 (see FIG. 1).

While the automated notification system 100 provides many useful functions as far as notification of changed or obsoleted parts is concerned, the automated notification system 100 is limited in that it does not provide a mechanism for commerce among the vendors and customers which provide information to the automated notification system 100.

SUMMARY OF THE INVENTION In one aspect, the present invention is directed to systems and methods for facilitating commercial transactions between entities having a surplus inventory of parts and entities in need of such parts.

In one embodiment as described herein, an automated parts commerce system is provided by which manufacturers are given the ability to purchase needed parts from other manufacturers having surplus inventory, in a manner which promotes economic efficiency and fairness of pricing by emulating free market competition. In the automated parts commerce system, a database of customers/manufacturers is maintained along with details pertaining to various customer products, including a list of parts (i.e., bill of materials (BOM) or approved vendor list (AVL)) for each product. In response to notices from vendors for changed or obsoleted products or via direct input by a user, the automated parts commerce system searches the customer database to determine which customers utilize the affected part, and thus which customers may be affected by the vendor notice or may have surplus inventory of the affected part. A customer notification process automatically sends a message to the various customers utilizing the affected part to solicit their interest in selling a portion of their inventory, if any, to other customers in need of the affected part. The automated parts commerce system receives response messages from the customers indicating whether they have surplus inventory and if so, how much surplus

LA-184044.1 and the price at which or other terms upon which they would be willing to sell it. A transaction process carries out transactions between customers in need of the affected parts and those having surplus inventory.

Transactions between sellers and buyers of surplus inventory may take the form of a direct exchange between the two parties, or alternatively may take the form of an auction carried out by a special electronic auction broker. Auctions or exchanges are preferably "double-blind" so that neither the buyer nor seller is aware of the other party's identity, and so that their identities cannot be inferred by tracking transactions over time, hi particular auction scenarios, a seller of surplus inventory may specify an opening price, decrement steps for the price, timing of the decrement steps, and a floor price.

Conversely, a buyer of surplus inventory may specify an opening price, increment steps for the price, timing of the increment steps, and a ceiling price. The auction broker may be configured to follow arbitration rules to handle special situations as, for example, when two sellers offer the same product at the same price. Also, the transaction process may permit interactive participation by buyers and sellers, or conditional interactive participation if certain conditions are met.

In another embodiment as described herein, an automated parts commerce system as described above is provided, with the additional feature that the system is tied to inventory databases maintained by the customers. In this embodiment, the automated parts commerce system can directly determine whether any surplus of an affected part exists, by querying the customer databases for the affected part. The automated parts commerce system may then specifically target those customers having a surplus of the affected part, or currently list the affected part in either their ANL or BOMs, to determine whether the customer is interested in selling the surplus or over-stocked inventory, tti a particular variation of this embodiment, the automated parts commerce system is also tied to the customer's product planning system and/or database, which keeps track of the customer's future projected use of the various products. The automated parts commerce system can then make a more informed determination of whether a particular customer has surplus inventory of an affected part, by evaluating the customer's future needs along with the customer's current inventory of the affected part.

Other alternative embodiments, enhancements and variations are also described later herein.

LA-184044.1 BRIEF DESCRIPTION OF THE DRAWINGS FIG. 1 is a block diagram of an automated notification system for changed or obsoleted parts, as known in the prior art. FIG. 2 is a process flow diagram as known in the prior art for a notification process in accordance with the system of FIG. 1.

FIG. 3 is a process flow diagram as known in the prior art for a historical report generation in accordance with the system of FIG. 1.

FIG. 4 is an abstract process flow diagram of an automated parts commerce system according to one embodiment as described herein.

FIG. 5 is a block diagram illustrating a system and process for facilitating transactions for parts among customers, in general accordance with the process illustrated in FIG. 4.

FIG. 6 is a diagram of software objects which may be used in the systems and processes of FIGS. 4 and 5.

FIG. 7 is a block diagram of a system and process in accordance with another embodiment of an automated parts commerce system as described herein.

FIG. 8 is a process flow diagram illustrating an electronically assisted exchange. FIG. 9 is a process flow diagram illustrating an electronically assisted auction.

DETAILED DESCRIPTION OF PREFERRED EMBODIMENTS FIG. 4 is an abstract process flow diagram, described in a Unified Modeling Language (UML), for a computer-implemented, automated parts commerce system according to one embodiment as described herein. As illustrated in FIG. 4, a process 400 includes four basic functional sub-processes, including an Initiate process 410, a Filter process 420, a Transact process 430 and a Fulfill process 440. In general terms, the Initiate process 410 identifies potential at-risk parts based on a vendor's change or obsolescence notice and/or the customer's direct input. The Filter process 420 identifies customers having a potential surplus of or a need for parts which are subject to a vendor's change or obsolescence notice, and solicits the interest of the customers in engaging in a transaction with respect to the at-risk part. The Filter process 420 also compares the identified surplus or needed parts against existing customers' ANLs and BOMs in order to

LA-184044.1 identify potential buyers or sellers, respectively. The Filter process also proactively notifies these identified buyers or sellers of the potential transaction opportunity. The Transact process 430 performs a transaction (typically an auction or exchange) between or among interested customers. The Fulfill process 440 effectuates the transaction by acting as an intermediary between buyer, seller and shipper. As part of the Fulfill process 440, inspections of the received parts may be performed to verify that parts received are as the sellers claim. Sellers may be historically measured on how closely the received parts match in quality and quantity to what the particular seller disclosed. These historic quality and quantity measures may be made available to potential buyers on future transactions with the seller in the form of additional transaction-related information.

The process 400 illustrated in FIG. 4 may be performed on a computer system which is preferably connected to a distributed, electronic network, such as the Internet. The computer system may include, among other things, a network server for connection to the distributed, electronic network, a disk for storage of database components utilized by the system and of programming code for carrying out the various functions of the process 400, and one or more workstations and monitors for system maintenance, data entry, administration, and the like. Interaction with vendors and customers may be carried out through electronic messaging, such as e-mail or any other type of standard message utility, by a batch upload process, by direct integration with external customer systems, and/or by interactive communication using HTTP or a similar protocol for receiving information from or entering information into a web page at the host system.

Further details of the process 400 shown in FIG. 4 may be explained with occasional reference to FIG. 5, which is a block diagram of a system and process for facilitating transactions for parts among customers, in general accordance with the process illustrated in FIG. 4. With reference first to FIG. 4, the Initiate process 410 receives as inputs information from an At-Risk Filter process 406, which identifies customers who use parts which have been identified by vendors as being targeted for change, obsolescence, or other at-risk factors. The At-Risk Filter process 406 generates such information based on vendor notices 405 and a database of customer information (not shown in FIG. 4), in a manner similar to that described with respect to FIGS. 1 and 2. In other words, as vendor notices 405 are received, the customer database is searched to determine which customers include the affected part(s) on their qualified parts list (i.e., ANL 112) or product parts

LA-184044.1 lists (i.e., BOMs 113). A list of the customers using the affected part(s) is provided to the Initiate process 410, as illustrated in FIG. 4. In addition, excess inventory lists may be collected from sourcing entities such as franchise distributors, and such excess inventory lists, while technically not constituting ANLs or BOMs, may be functionally treated as ANLs or BOMs by the system for purposes of determining the existence of surplus or overstocked inventory and setting up transactions.

The Initiate process 410, which receives information from the At-Risk Filter process 406, may itself be divided into three functional units, including an At-Risk Trigger process 411, a Has Surplus process 412, and a Needs Parts process 413. In one embodiment, the At-Risk Trigger process 411 selectively notifies the customer at risk that the affected product will be changed or obsoleted, based upon information received from the at-risk filter process 406. The At-Risk Trigger process 411 may filter out certain customers that are not likely to engage in surplus inventory transactions, based on, for example, the content of the customers current product parts lists (BOMs 113 and/or ANL 112). Thus, if the customer is not currently using the affected part, as indicated by the absence of the part on the customer's BOMs or ANL, then the At-Risk Trigger process 411 may weed out that customer as one not likely to participate in a surplus inventory transaction. One reason for performing such filtering would be to avoid inundating the customers with solicitations for transactions in which the customer is unlikely to be able to participate. The customer also preferably has control over notification and solicitation content based on their customizable user filters. For example, large customers often organize responsibility around commodities, such as, for example, computer memory components. A user who is responsible for certain commodities (e.g., computer memory components) can filter notifications and solicitations to be received based on his or her company's parts list plus, if desired, specific product categories (e.g., dynamic memory, static memory, EEPROM, etc.).

The At-Risk Trigger process 411 interfaces with both potential sellers and buyers, gathering information from those customers interested in participating in either side of a parts transaction. The At-Risk Trigger process 411 sends electronic messages to the sellers and buyers over the distributed network (e.g., Internet) to which the automated parts commerce system, sellers and buyers are all connected. Preferably, the At-Risk Trigger process 411 sends only a single electronic message to each targeted customer each

LA-184044.1 day, with the single electronic message containing a list of all parts which are subject to the various vendor notices processed that day. The purpose of sending only a single message is to avoid inundating the customer with numerous solicitation requests for transactions throughout the day; however, in some environments it may be desired to send a separate message for each individual part. In any event, the message may indicate a transaction response period for each part number, or for the entire electronic message, by which time the customer must respond if the customer is to participate in a transaction for a part appearing on the message. The message is configured such that the customer can readily select the parts for which a transaction is desired, by clicking on the entry for the part using a mouse, or by otherwise highlighting or selecting the desired entry or entries. The customer's response may be sent back in the same manner it was received - e.g., via e-mail or any other suitable mechanism for transporting messages over a distributed network.

At the same time the reply to the solicitation message is sent back, the customer, if a potential seller, may also specify (1) the quantity of the affected part which the customer may be willing to sell, and (2) the price at which such a sale would be made. Similarly, if a potential buyer, the customer may specify (1) the quantity of the affected part which the customer desires to purchase, and (2) the price at which such a purchase would be made. The customer may also provide information such as the specific manufacturer (vendor) of the part, preferred time frame to complete a transaction, any conditions of purchase/sale, value-added services relating to the affected parts, technical attributes of the parts (such as date codes), and other information that may be relevant to a prospective buyer/seller. When the reply to the solicitation message is received by the automated parts commerce system, a customer-specific tracking token is preferably assigned to the offer to purchase/sell. The customer-specific tracking token differs from the transaction tokens which are described later herein, and which are used to permit "double-blind" exchanges or auctions of parts during the actual transaction stage.

If the customer's reply indicates that the customer has a surplus of the affected part, then the customer's offer to sell is gathered by the Has Surplus process 412. On the other hand, if the customer's reply indicates that the customer is in need of the affected part, then the customer's offer to purchase is gathered by the Needs Parts process 413. The Has Surplus process 412 and Needs Parts process 413 may, if desired, automatically

LA-184044.1 contact the customer for information such as the specific manufacturer (vendor) of the part, preferred time frame to complete a transaction, any conditions of purchase/sale, value-added services relating to the affected parts, and technical attributes of the parts (such as date codes), if such information was not provided by the customer with the initial response.

In addition, a customer may directly submit an inventory surplus message (i.e., offer to sell) or an inventory deficit message (i.e., offer to purchase) to the automated parts commerce system without first being solicited by the At-Risk Triggers process 411. In such a case, the At-Risk Triggers process 411 forwards the message to the Has Surplus process 412 or Needs Parts process 413, as appropriate. The At-Risk Triggers process 411 may also issue solicitations to other customers who, based upon their ANL and BOMs stored at the automated parts commerce system, are likely to have a surplus of the part or be in need of the part, as the case may be.

The Initiate process 410 is ongoing, continually sending solicitation messages to customers based on a regular stream of vendor notices 405, and receiving responses to the solicitation messages. In the Filter process 420, the information gathered by the Initiate process 410 is organized and processed. The Filter process 420 may be divided into two functional units, an Identify Participants process 421 and a Notify Transactions process 422. The Identify Participants process 421 may be run at a set time after sending a solicitation to various customers. Alternatively, the Identify Participants process 421 may be run at a set time following receipt of the first customer response to a solicitation. As yet another alternative, the Identify Participants process 421 may be run periodically (e.g., once per day or once per a given number of days), and when run it will process solicitations that are a predetermined minimum age. The Identify Participants process 421 identifies potential buyers and sellers for a particular transaction. More specifically, the Identify Participants process 421 aggregates customer responses pertaining to the same part, and generates for each affected part a set of potential buyers and sellers thereby.

In addition, on a per tracking token basis, the Identify Participants process 421 may also perform another sweep through the customer database (specifically, the ANL and BOMs for each customer, and any user filter associated with the customer) to determine whether there are any additional potential buyers (if the tracking token is associated with an offer to sell) or sellers (if the tracking token is associated with an offer to buy) of the

LA-184044.1 particular part. The Identify Participants process 421 may perform such a sweep through the customer database on a regular basis (e.g., daily) or at other convenient times. The filtering procedure run by the Identify Participants process 421 aggregates potential buyers and potential sellers into groups, resulting in a set of potential buyers and a set of potential sellers for each part, or alternatively may conditionally identify a select group of potential buyers or sellers for one or more parts. In one aspect, the filtering process run by the Identify Participants process 421 constitutes an intermediary step whereby sets of potential buyers and sellers are generated; depending upon a level of interest expressed by the potential buyers and sellers thereafter, the sets of potential buyers and sellers are pared down to sets of actual transaction participants in an exchange or auction setting.

In addition to running a periodic filtering procedure to identify potential buyers and sellers, in situations in which a part is urgently needed another type of sweep may be run by the Identify Participants process 421 to identify matches against particular ANLs, BOMs or specific parts, with any matches being aggregated and collectively associated with a tag indicating that the transaction is urgent.

After the sweep performed by the Identify Participants process 421, the Notify Transactions process 422 of the Filter process 420 may then issue solicitation messages to the potential buyers/sellers alerting them that an actual interested party exists for buying/selling the particular part. The potential buyers/sellers are preferably provided with a set time frame in which to respond to the solicitation message and to be included as a potential participant in the transaction. As before, the response to the solicitation message may include information such as the specific manufacturer (vendor) of the part, preferred time frame to complete a transaction, any conditions of purchase/sale, value- added services relating to the affected parts, and technical attributes of the parts (such as date codes), if appropriate.

Customers may also specify (preferably by way of pre-designated fields for this purpose), in response to the solicitation messages, or as part of a directly initiated buy or sell request, whether a partial order will be accepted, and whether the offered price is applicable to a partial order or whether it will need to be renegotiated. FIG. 5 illustrates certain details of the process flow of FIG. 4, while omitting some of the process steps of FIG. 4 for purposes of illustration. As illustrated in FIG. 5, the at- risk filter process 510 (shown as step 406 in FIG. 4) draws upon vendor notices 501

LA-184044.1 pertaining to parts being changed or obsoleted, and the customer database 505 including each customer's qualified parts list (i.e. approved vendor list or ANL 507) and bills of material 508 for particular projects being undertaken by the particular customer. The at- risk filter process 510 generates a list of customers 512 potentially having a surplus of or a need for a part affected by a vendor notice 501, as previously described with respect to FIG. 4. Once the list of customers 512 is generated, a solicitation process 513 sends solicitation messages 531 to customers 540 identified in the list of customers 512. The customer 540 responds to the solicitation messages 531 with response messages 532 indicating whether the customer 540 has surplus inventory or whether the customer 540 is in need of the affected part. A transaction process 520 aggregates the responses and organizes them for further processing (essentially carrying out the functions mentioned with respect to the Has Surplus process 412, Needs Parts process 413, and Filter process 420 appearing in FIG. 4). The transaction process 520 then conducts and exchange process 550 or an auction process 551, depending upon the level of customer interest, as further described herein. After an exchange or auction transaction has been agreed upon through the automated (or semi-automated) processing as hereafter described, a fulfillment process 560 is carried out, as also described later herein.

Returning to FIG. 4, the potential buyers and sellers aggregated by the Initiate process 410 and Filter process 420 are associated with a specific transaction identifier for a given part. Depending on the level of interest, the transaction is tagged as either as an auction or an exchange. Generally, the following rules are applied. If there are multiple buyers and a single seller, or if there are multiple sellers and a single buyer, the transaction is tagged as an auction. If there are multiple sellers and multiple buyers, a series of auction transactions will be scheduled, one auction per seller, with each auction being identified by a separate, specific transaction identifier. If there is a single seller and a single buyer, the transaction is tagged as an exchange instead of an auction. If there is a single buyer and seller and no other interested participant, then the single buyer/seller will be notified that no transaction for the part is currently possible, or else the transaction may be listed as an on-going exchange that sees little activity or activity over a much longer time frame. Optionally, the transaction identifier may be stored in a waiting bin in case further interest in buying/selling the part occurs later. The waiting bin may be searched by the Identify Participants process 421 when attempting to identify potential buyers and

LA-184044.1 sellers of a given part. When a buyer or seller is pulled from the waiting bin because further interest in buying/selling the part has occurred, the customer that was held in the waiting bin is notified of a potential transaction via the Notify Transactions process 422, as would be any other customer. Auctions are preferably further categorized depending upon, for example, the number of interested parties and the quantity of goods offered or sought by the various parties. The transaction may be categorized as a "reverse auction" if the buyer indicates a need which would require multiple sellers to meet. The transaction may be categorized as an "English auction" if a seller has enough parts to sell to multiple buyers. The transaction may be categorized as a "Dutch auction" if a buyer or seller allows partial buying or partial selling, as indicated by the "minimum number of parts" informational field provided by the buyer or seller.

A transaction may be categorized as an exchange if there are not enough buyers or sellers for an auction, if a transaction needs to occur over a long period of time, or if the buyer is in desperate need and is willing to pay an expedite fee (i.e., not necessarily the highest possible price over time, but meets at least the minimum requested price by seller and transaction will conclude within a system-established period of time, such as one day). In some circumstances, it may be desirable to tag a transaction as an exchange, even if there are multiple buyers or sellers and a single opposite party. Where the quantity desired by multiple buyers collectively is less than or approximately the same as the quantity offered by a single seller, or where the quantity offered by multiple sellers collectively is less than or approximately the same as the quantity desired by a single buyer, the transaction may more appropriately be structured as an exchange, since the single party is interested in filling an order that requires the participation of multiple parties. The buyer or seller is preferably provided with options indicating whether dealing with multiple parties in a single transaction would be acceptable.

In addition to the above transaction types, the transaction may also be categorized as a "sealed bid" if a specific buyer and seller need to renegotiate an ongoing transaction. For example, if the parts received by the buyer are in the wrong type of packaging, but buyer wants them anyway, a sealed bid would allow them to renegotiate confidentially and anonymously.

LA-184044.1 Once tagged as an auction or exchange, transactions are conducted by the Transact process 430. The Transact process 430 may be divided into two functional units, an Exchange process 432 and an Auction process 431. An example of a particular technique for conducting an exchange transaction is depicted in FIG. 8. As an initial screening step (not shown) to the exchange process 800 shown in FIG. 8, the Transact process 430 may scan the transaction price limits of the seller and buyer (i.e., the minimum sale offer price from the seller and the maximum purchase offer price from the buyer) to make sure that an exchange would be possible at some mutually agreeable price. If not, then the transaction may be abandoned, and the parties notified. If a transaction at a mutually agreeable price is possible, then, as illustrated in FIG.

8, in a first process step 801 of the exchange process 800, each of the participants is assigned a random (or pseudo-random) temporary transaction identity token, by which other participants can identify and refer to the party. The temporary transaction identity token also connects a particular participant to a specific transaction, for tracking by the automated parts commerce system. In a next process step 802, each of the participants can set or edit buy/sell parameters for the transaction. Such parameters may include such things as minimum lot size, starting price, price increments/ decrements, ceiling price (for buyers), floor price (for sellers), threshold for notification, payment method, and the like. The Transact process 430 may impose a minimum price increment or decrement for participants, which may be derived from the initial offering price as, for example, either a percentage of that price or else a value selected from a lookup table using the initial offering price as an index into the table. The threshold for notification is the price point at which the customer will be notified by an electronic message of the price reaching that level, allowing the customer to edit the transaction parameters in view of the price level or more interactively participate in the transaction. As part of the transaction parameters, a buyer may also specify if a single seller is desired (referred to as a "fill or kill" option), and a seller may indicate whether a sale might be divided into increments if there is more than one buyer (referred to as a "dutch" option). A participant may indicate whether each parameter is firm or flexible; and if flexible, whether the participant should be notified before allowing any deviation from the initial parameter.

The exchange process 800 then enters an iterative loop 804, in which an ultimate transaction is effectuated. In process step 805, the exchange process 800 determines

LA-184044.1 whether the target sale price of the offer to sell is less than or equal to the target purchase price of an offer to buy. If so, in a next process step 806, the exchange process 800 sets the transaction price and then goes to end-of-transaction processing 810. If the target sale price is equal to the target purchase price, then the transaction price is set to the common amount of the target sale price and target purchase price. If the target sale price is less than the target purchase price, the transaction price may be set in any of a variety of manners. The transaction price may be set to the target sale price, or to the target purchase price, or to some level between the two (e.g., the mid-point). In the end-of-transaction processing stage 810, in step 811, the participants are notified by electronic messages that a transaction has been completed.

If, in process step 805, the exchange process 800 determines that the target sale price of the offer to sell is greater than the target purchase price of the offer to buy, then whether a transaction will be effectuated generally depends upon the other parameters selected by the participants. In one embodiment, in a next step 807, the target sale price is decremented by the decrement step indicated by the seller, and the target purchase price is incremented by the increment step indicated by the buyer. In alternative arrangements, the decrement to the target sale price and the increment to the target purchase price may be alternated. The exchange process 800 then proceeds to a next step 808, in which the adjusted purchase and/or sale offer price is checked against the limit set by the buyer or seller, respectively. If the limit is exceeded (i.e., the adjusted target sale price is below the minimum price set by the seller or the adjusted target purchase price is above the maximum price set by the buyer), then the exchange process sets the adjusted target price to the appropriate price limit. The exchange process 800 then returns to step 805, in which the target sale price and target purchase price are compared. If the target sale price has become less than or equal to the target purchase price, then the exchange process 800 branches to the end-of-transaction processing 810, as before. If not, then the exchange process 800 returns to step 807 and adjusts the target sale price and/or target purchase price by the appropriate increment/decrement steps again.

To avoid abuse of the automated auction and exchange processes, the auction and exchange provider may impose certain terms and conditions to which participants must agree in advance. For example, the auction and exchange provider may require that participants will not engage in a behavior referred to in the auction industry as "shilling",

LA-184044.1 in which, for example, a "phantom" buyer is employed to force upwards bidding on parts being auctioned. The auction and exchange provider may track this type of behavior by monitoring which buyers and sellers tend to participate in auctions together, by checking the relationship between buyers and sellers participating in a given auction based upon available information, by monitoring how often and for what ostensible reasons sales made between buyers and sellers are later cancelled (the assumption being that the "phantom" buyer will occasionally win the auction but will not really need the parts), or by performing other types of transaction analyses. In addition, the auction and exchange provider may require potential users to undergo a validation process prior to being given permission to engage in transactions. For example, if a potential user claims to be a reseller, the auction and exchange provider may require a copy of the party's reseller's license before that party is allowed to engage in transactions.

An example of a particular technique for conducting an auction transaction is depicted in FIG. 9. As illustrated in FIG. 9, in a first process step 901 of an auction process 900, similar to the exchange process 800, each of the participants is assigned a random (or pseudo-random) temporary transaction identity token, by which other participants can identify and refer to the party. The temporary transaction identity token also connects a particular participant to a specific transaction, for tracking by the automated parts commerce system. In a next process step 902, each of the participants can set or edit buy/sell parameters for the transaction. This step may be carried out in part by the exchange of electronic messages (e.g., e-mail messages) between the buyer or seller and the automated parts commerce system, or by allowing the buyer or seller to interactively access its transaction (using the transaction token as an identifier) at the website connected to or part of the automated parts commerce system. Buy/sell parameters which can be set or edited may include, as with the exchange process 800, such things as minimum lot size, starting price, price increments/decrements, ceiling price (for buyers), threshold for notification, payment method, and the like. As part of the transaction parameters, a buyer may also specify if a "fill or kill" option if a single seller is desired, and a seller may specify a "dutch" option if willing to split up a lot into incremental units. A participant may indicate whether each parameter is firm or flexible and, if flexible, whether the participant should be notified before allowing any deviation from the initial parameter.

LA-184044.1 In a preferred embodiment, aggregate purchases from multiple sources are treated as separate transactions. As an example, suppose a buyer needs 100 parts, and there are two offers for sale of 75 parts each. If only one of the sellers allows partial purchases, then the buyer would buy 75 parts from the first seller and 25 parts from the second seller (assuming that amount exceeds any minimum purchase requirement of the second seller), and the two purchases would be treated as separate transactions. If both of the sellers allow partial purchases, then the buyer can determine how it wants to purchase the 100 parts, subject to any minimum purchase requirement by either of the sellers, and again the process would be structured as two separate transactions. After the auction parameters are specified in step 902, the auction process 900 then commences an initial screening process 904, to identify whether the need for an auction loop is necessary. In process step 905 of the screening process 904, the auction process 900 scans the offers to purchase and determines whether the target purchase price of any offer to purchase is greater than or equal to the target sale price (i.e., minimum starting bid) of the offer to sell. If so, in a next process step 906, the auction process 900 determines whether a single potential buyer or multiple potential buyers qualify as having a target purchase price greater than the target sale price. If only a single buyer qualifies, then in a next process step 918, the auction process 900 sets the transaction price and then goes to end-of-transaction processing 920. The transaction price is preferably set to the target purchase price of the offer to purchase, but may be adjusted, if desired, based on various considerations. If no buyers have a target purchase price greater than or equal to the target sale price (i.e., the minimum starting bid), then several options exist. In one embodiment, in a step 907, the minimum starting bid is lowered by the specified decrement amount, and the auction process 900 returns to step 905. If more than one potential buyer has a price ceiling higher than the minimum starting bid, the current purchase price offer (i.e., the "bid" - an internal variable used by the auction process 900) is set to the minimum starting bid, and the auction moves on, excluding those buyers whose price ceiling is below the minimum starting bid.

In an alternative or supplementary embodiment, at the start of the initial screening process 904, the auction process 900 scans all of the offers to purchase to make sure that at least one has a maximum price ceiling that is higher than the minimum starting bid. If only one potential buyer has a price ceiling higher than the minimum starting bid, then the

LA-184044.1 transaction is re-tagged as an exchange between that particular buyer and the seller, and the Exchange process 432 is invoked. If none of the offers to purchase have a maximum price ceiling higher than the minimum starting bid, then the auction process 900 is cancelled and the transaction abandoned. The automated parts commerce system notifies the participants of the transaction cancellation, and may optionally offer each participant a chance to revise and re-submit their bids. The automated parts commerce system may store such cancelled transactions in a temporary bin for a pre-specified period (e.g., a number of days or weeks) while awaiting any revised bids.

If, based upon the initial screening process 904, multiple buyers qualify as having a maximum price ceiling and a target purchase price (i.e., initial purchase bid) greater than or equal to the target sale price (i.e., minimum starting bid), then the auction process 900 circles through an auction loop 910 until a transaction is effectuated. In the auction loop 910, the auction process 900 scans sequentially tlirough the potential buyers, incrementing the current purchase price offer (i.e., the "bid") for each potential buyer according to the specified increment step, until a single buyer (or potentially group of buyers) remains. Accordingly, in process step 912 of the auction loop 910, the auction process 900 first selects the next potential buyer in sequence. In process step 913, the auction process 900 sets a "test bid" to the current bid plus the potential buyer's increment step. In process step 914, the auction process 900 determines whether the test bid is less than the potential buyer' s price ceiling. If so, then in process step 915, the auction process 900 raises the current bid to the amount of the test bid. If not, then, in step 917, the potential buyer is knocked out of the auction. In either case, the auction process 900 proceeds to step 915, wherein the auction process 900 determines whether there is another potential buyer left. If there is no other potential buyer, then the auction process 900 branches to the end-of- transaction processing 920, and a fransaction is closed with the last remaining potential buyer and the seller. If there is another potential buyer, then the auction process returns to the top of the auction loop 910 and selects the next potential buyer. If all of the remaining potential buyers are knocked out in a single round of the auction loop 910, then the potential buyer with the higher maximum price ceiling prevails as the auction winner. If, in such a case, more than one potential buyer has the same maximum price ceiling, then one of the two potential buyers may be selected at random, or alternatively the auction can be re-executed with only those two potential buyers, giving each participant first a chance

LA-184044.1 to revise their auction parameters. As another alternative, the buyer with the earliest time stamp may be allowed to prevail.

Participants preferably can interactively view the progress of the auction by, for example, accessing a website maintained by a web server which is connected to or part of the automated parts commerce system of the host provider. In one embodiment, for example, the auction loop 910 is carried out with delays in between various steps, so that participants can manually intervene, if desired. In a situation where the current bid in the auction process 900 has exceeded the expectation of a participant, the participant may, for example, raise its ceiling price, or increase its increment steps, or alter its terms of transaction (e.g., payment method, preferences, etc.). Participants are only identified by their temporary transaction identification token (typically a set of alphanumeric characters/numbers), so that the identities of the participants remain confidential. Since new temporary transaction identification tokens are issued separately for each new transaction, the habits of specific participants cannot be tracked from transaction to transaction, and complete anonymity on both sides of the transaction is maintained. Upon conclusion of an exchange or auction transaction, in step 921, all of the participants are notified of the outcome. In an auction process, participants "losing" in the auction are notified that their bids were not accepted.

After the Auction process 431 or the Exchange process 432 illustrated in FIG. 4, the automated parts commerce system then enters the Fulfill process 440, whereby the electronically agreed-upon transactions are fulfilled. The Fulfill process 440 may be divided into four functional units, including an Escrow process 441, an Inspection process 442, a Payment process 443, and a Shipping/Handling process 445. The Escrow process 441 manages and concludes a transaction effectuated by the Transact process 430. More specifically, the Escrow process 441 initiates, coordinates and closes each element of escrow. Such elements may include: (1) receipt of funds from buyer, (2) receipt of parts from seller, (3) parts inspection, (4) parts handling, (5) shipping, and (6) disbursement of payment. Accordingly, the buyer tenders funds to escrow by delivering the appropriate amount of funds, charging the amount by credit, or otherwise providing payment according to the terms specified in the transaction. If the terms of payment were left open by both parties, then a default mode of payment (e.g., by wire, money order, or credit card) may be selected by the system. The seller delivers the parts to a location specified

LA-184044.1 by the manager of the automated parts commerce system, or its designated agent or fulfillment partner. The parts are inspected upon arrival, then re-packaged and shipped according to the terms specified in the transaction. Upon arrival at the buyer, the parts may be inspected again, this time by the buyer. The participants to a transaction may monitor the progress of escrow, using the fransaction identifier to identify the particular transaction. On receipt of the parts from the seller, the Inspection process 442 begins. Information such as special handling instructions, value-added services required, and the like is provided to the fulfillment entity. As each step of the inspection is completed, the fulfillment entity updates the status of the transaction so that the buyer and seller can track the ongoing progress of the transaction. In the Shipping/Handling process 445, the progress of the parts after receipt by the fulfillment entity is monitored. After the parts are received by the fulfillment entity, the parts are processed (e.g., packaged and labeled) in preparation for shipping. As processing and shipping are completed, the fulfillment entity updates the status of the transaction so that the buyer and seller can track its progress.

If upon arrival at the fulfillment center, the parts are not satisfactory, then the buyer may be notified by the automated parts commerce system (by electronic message or otherwise), and an exception declared. Where the problem is not serious enough to cause the fransaction to fall out of escrow (e.g., where the parts are not in their original packaging, or their date codes are not within the desired range but the parts are still useable), the transaction may be re-tagged as a sealed-bid auction, and the parties may enter a process by which they re-negotiate a price for the parts, in a manner similar to as set forth above for the auction process (see FIG. 8), except participants are restricted to the current buyer and seller. If the parts are acceptable, then the Payment process 443 is carried out, by which collected funds are disbursed. As payment items are completed, the fulfillment entity may update the status of the transaction so that the buyer and seller can monitor it. The managing entity of the automated parts system may charge a fee (e.g., a fixed or sliding percentage) for providing services associated with the automated parts commerce system. Such a fee may be directly received from the collected funds as part of the Payment process 443 when the funds are disbursed.

LA-184044.1 FIG. 6 is a diagram of software objects which may be used in the systems and processes of FIGS. 4 and 5. As illustrated in FIG. 6, a number of objects associated with users (i.e., manufacturers and vendors) includes user objects 611, company objects 612, ANL and BOM objects 613, user filter objects 614, and credit profile objects 615. A number of objects associated with transactions includes auction/exchange history objects 631, transactions objects 632 (e.g., transaction tokens), lot objects 633, part objects 634), potential participants objects 635 (i.e., output from at-risk filter process 406), transaction interest objects 636 (generated interactively by At-Risk Triggers process 411), sell profile objects 637 (containing the parameters of an offer to sell) and buy profile objects 638 (containing the parameters from an offer the purchase). A number of objects associated with fulfillment include escrow checklist objects 651 (containing the escrow checklist for each agreed-upon transaction from the Transact process 440), inspection checklist objects 652, handling checklist objects 653, payment objects 654, money order payment objects 655, wire payment objects 656, credit card payment objects 657, and credit payment objects 658.

FIG. 7 is a block diagram of a system and process in accordance with another embodiment of an automated parts commerce system as described herein. The automated parts commerce system 700 illustrated in FIG. 7 is similar in many regards to the automated parts commerce system 500 of FIG. 5, but has an increased level of automation. In the system of FIG. 7, a customer list 712 is generated in the same manner as discussed for FIG. 5, from receipt of vendor notices 701 relating to affected parts as well as a customer database 705 containing ANLs 707 and BOMs 708 for the various customers 740. In the solicitation process 713, however, the system 700 draws upon additional information provided by the customer, including inventory information and product planning information. The customer 740 preferably makes its inventory database 703 and product planning database 704 available to the automated parts commerce system 700, so that the solicitation process 713 can be more focused. The solicitation process 713 may access the customer's inventory database 703 and/or product planning database 704 remotely over the distributed, electronic network, and may connect directly to the customer's network or system (as through a modem connection) or else may communicate with the customer's network or system by electronic messaging (e.g., e-mail). Alternatively, the customer's inventory database 703 and product planning database 704

LA-184044.1 may be downloaded periodically to the computer system, network or platform on which the automated parts commerce system 700 is run.

Having access to the customer's inventory database 703 and product planning database 704, the automated parts commerce system 700 is capable of determining directly from the customer's own information whether the customer has a surplus of a given part or is in need of a given part. The solicitation process 713 may compare the customer's inventory supply for a given part, as reflected in the customer's inventory database 703, with the customer's anticipated need for the product, as reflected in the customer's product planning database 704. If the customer's information indicates a surplus for the affected part, then the solicitation process 713 preferably sends a targeted message to the customer 740 seeking a level of interest in selling the part and indicating that the customer should have a surplus of the part. On the other hand, if the customer's information indicates a need for the affected part, then the solicitation process 713 preferably sends a targeted message to the customer 740 seeking a level of interest in buying the part, and indicating that the customer 740 should have a future need for the part. The remaining steps of the transaction process 720 and downstream therefrom are similar to those described with respect to the system of FIG. 5.

It is apparent that a comprehensive, flexible, automated or semi-automated system for facilitating commerce with respect to surplus inventory has been provided according to the various embodiments of the invention as described herein, and shown in the accompanying drawings. Customers utilizing the automated parts commerce system are likely to obtain needed parts far more economically then attempting to find them through parts brokers, and to be able to sell surplus inventor of parts for a higher value than if selling them to parts brokers. While preferred embodiments of the invention have been described herein, many variations are possible which remain within the concept and scope of the invention. Such variations would become clear to one of ordinary skill in the art after inspection of the specification and the drawings. The invention therefore is not to be restricted except within the spirit and scope of any appended claims.

LA-184044.1

Claims

CLAIMSWhat is claimed is:

1. An automated parts commerce system, comprising: a customer database comprising, for each of a plurality of customers, a list of parts utilized by the customer; an at-risk filter process for automatically identifying customers affected by a potential lack of needed parts; a solicitation process for notifying customers, by transmission of electronic solicitation messages over a distributed electronic network, of the potential lack of needed parts; a second filter process for receiving electronic response messages over said distributed electronic network from customers desiring to participate in a transaction for said needed parts; and a transact process for conducting an automated transaction relating to one or more of said needed parts.

2. The automated parts commerce system of claim 1, further comprising means for automatically receiving, over said distributed electronic network, elecfronic messages containing vendor change or obsolescence notices, wherein said at-risk filter process uses said vendor change or obsolescence notices to identify customers potentially affected by the lack of needed parts.

3. The automated parts system of claim 1, further comprising connections to inventory data and product planning data for one or more customers, wherein said at-risk filter process compares the inventory data and product planning data for a given customer to determine whether the customer potentially lacks needed parts.

4. The automated parts commerce system of claim 1, wherein said distributed electronic network comprises the Internet.

LA-184044.1

5. The automated parts commerce system of claim 1, wherein said at-risk filter process, said solicitation process, said second filter process, and said transact process are carried out in an automated manner by execution of program instructions stored within a computer system.

6. The automated parts commerce system of claim 1, further comprising a notification process for notifying customers of an upcoming transaction.

7. The automated parts commerce system of claim 1, wherein said electronic response messages comprise a quantity indication for one of said needed parts and pricing parameters for buying or selling said one part.

8. The automated parts commerce system of claim 1 , wherein said transact process comprises an exchange process for conducting an automated fransaction between a single buyer and a single seller.

9. The automated parts commerce system of claim 8, wherein said transact process further comprises an auction process for conducting an automated auction between multiple buyers and a single seller, multiple sellers and a single buyer, or multiple buyers and multiple sellers.

10. The automated parts commerce system of claim 9, wherein said auction process receives fransaction parameters from each customer participating in the automated auction in advance of conducting said automated auction.

11. The automated parts commerce system of claim 10, wherein, for an auction with multiple buyers, said auction process systematically rotates through each of said buyers and either raises an offering price according to the buyer's fransaction parameters or else eliminates the buyer from the automated auction, and, for an auction with multiple sellers, said auction process systematically rotates through each of said sellers and either lowers a sale price according to the seller's transaction parameters or else eliminates the seller from the automated auction.

LA-184044.1

12. A method of facilitating an electronic commercial transaction, comprising the steps of: storing in a customer database, for each of a plurality of customers, a list of parts utilized by each customer; automatically identifying customers affected by a potential lack of needed parts; notifying customers, by transmission of electronic solicitation messages over a distributed electronic network, of the potential lack of needed parts; receiving electronic response messages over said distributed electronic network from customers having a surplus of or need for a part; and conducting an automated transaction for said part.

13. The method of claim 12, wherein said step of identifying customers affected by the potential lack of needed parts comprises the step of comparing inventory data and product planning data for a given customer with respect to the customer's list of parts.

14. The method of claim 12, wherein said step of conducting said automated transaction for said part comprises the step of conducting an auction for said part.

15. The method of claim 12, wherein said step of conducting said automated transaction for said part comprises the step of conducting an exchange for said part.

16. The method of claim 12, wherein said step of conducting said automated transaction for said part comprises the step of selectively conducting either an exchange or an auction for said part, based upon a level of interest in said part as indicated by said electronic response messages pertaining to said part.

17. The method of claim 16, wherein said step of selectively conducting either an exchange or auction for said part comprises the step of conducting an exchange for said part if only a single buyer customer and single seller submitted electronic response

LA-184044.1 messages, respectively, for said part, and the step of conducting an auction for said part if multiple buyers or multiple sellers submitted electronic response messages for said part.

18. The method of claim 12, wherein said distributed electronic network comprises the Internet.

19. The method of claim 12, further comprising the step of aggregating said electronic response messages for each part, and wherein said step of receiving said electronic response messages comprises the step of receiving a quantity indicator relating to said part and pricing parameters for buying or selling said part.

20. An automated parts commerce system, comprising: a customer database comprising, for each of a plurality of customers, a list of parts utilized by the customer; an at-risk filter process for automatically comparing said list of parts against one or more vendor change or obsolescence notices identifying at-risk parts, thereby generating a list of customers potentially affected by said vendor change or obsolescence notices; a solicitation process for notifying, by transmission of electronic solicitation messages over a distributed elecfronic network, each customer of the vendor change or obsolescence notices potentially affecting the customer; a second filter process for receiving electronic response messages over said distributed electronic network from customers having a surplus of or need for at-risk parts, and aggregating electronic response messages relating to the same at-risk part; and a transact process for conducting an automated transaction for one or more at-risk parts.

21. The automated parts commerce system of claim 20, further comprising means for automatically receiving, over said distributed electronic network, electronic messages containing said vendor change or obsolescence notices.

22. The automated parts commerce system of claim 20, wherein said distributed electronic network comprises the Internet.

LA-184044.1

23. The automated parts commerce system of claim 20, wherein said at-risk filter process, said solicitation process, said second filter process, and said transact process are carried out in an automated manner by execution of program instructions stored within a computer system.

24. The automated parts commerce system of claim 20, further comprising a notification process for notifying customers of an upcoming transaction.

25. The automated parts commerce system of claim 20, wherein said electronic response messages comprise a quantity indication relating to an at-risk part and pricing parameters for buying or selling said at-risk part.

26. The automated parts commerce system of claim 20, wherein said transact process comprises an exchange process for conducting an automated transaction between a single buyer and a single seller.

27. The automated parts commerce system of claim 26, wherein said transact process further comprises an auction process for conducting an automated auction between either multiple buyers and a single seller, multiple sellers and a single buyer, or multiple buyers and multiple sellers.

28. The automated parts commerce system of claim 27, wherein said auction process receives transaction parameters from each customer participating in the automated auction in advance of conducting said automated auction.

29. The automated parts commerce system of claim 28, wherein, for an auction with multiple buyers, said auction process systematically rotates through each of said buyers and either raises an offering price according to the buyer's fransaction parameters or else eliminates the buyer from the automated auction, and, for an auction with multiple sellers, said auction process systematically rotates tlirough each of said sellers and either

LA-184044.1 lowers a sale price according to the seller's transaction parameters or else eliminates the seller from the automated auction.

30. A method of facilitating an electronic commercial transaction, comprising the steps of: storing in a customer database, for each of a plurality of customers, a list of parts utilized by each customer; automatically comparing said list of parts against one or more vendor change or obsolescence notices identifying at-risk parts, thereby generating a set of customers potentially affected by said vendor change or obsolescence notices; notifying, by transmission of elecfronic solicitation messages over a distributed electronic network, each customer of the vendor change or obsolescence notices potentially affecting the customer; receiving electronic response messages over said distributed electronic network from customers having a surplus of or need for an at-risk part; and conducting an automated fransaction for said at-risk part.

31. The method of claim 30, wherein said step of conducting said automated transaction for said at-risk part comprises the step of conducting an auction for said at-risk part.

32. The method of claim 30, wherein said step of conducting said automated transaction for said at-risk part comprises the step of conducting an exchange for said at- risk part.

33. The method of claim 30, wherein said step of conducting said automated transaction for said at-risk part comprises the step of selectively conducting either an exchange or an auction for said at-risk part, based upon a level of interest in said at-risk part as indicated by said electronic response messages pertaining to said at-risk part.

34. The method of claim 33, wherein said step of selectively conducting either an exchange or auction for said at-risk part comprises the step of conducting an exchange

LA-184044.1 for said at-risk part if only a single buyer customer and single seller submitted elecfronic response messages for said at-risk part, and the step of conducting an auction for said at- risk part if multiple buyers or multiple sellers submitted electronic response messages for said at-risk part.

35. The method of claim 30, wherein said distributed elecfronic network comprises the Internet.

36. The method of claim 30, further comprising the step of aggregating said electronic response messages for each at-risk part, and wherein said step of receiving said electronic response messages comprises the step of receiving a quantity indicator relating to the at-risk part and pricing parameters for buying or selling said at-risk part.

37. An automated parts commerce system, comprising: a customer database comprising, for each of a plurality of customers, a list of parts utilized by the customer; an at-risk filter process for automatically comparing said list of parts against one or more vendor change or obsolescence notices identifying at-risk parts, thereby generating, for each vendor change or obsolescence notice, a list of customers potentially affected by the at-risk part associated with the vendor change or obsolescence notice; a solicitation process for notifying, by transmission of elecfronic solicitation messages over a distributed electronic network, each customer of the vendor change or obsolescence notices potentially affecting the customer; a second filter process for receiving electronic response messages over said distributed elecfronic network from customers having a surplus of or need for an at-risk part, and aggregating electronic response messages relating to said at-risk part, said electronic response messages comprising fransaction parameters for buying or selling said at-risk part; and a transact process for conducting an automated transaction for said at-risk part.

38. The automated parts commerce system of claim 37, wherein said distributed electronic network comprises the Internet.

LA-184044.1

39. The automated parts commerce system of claim 37, wherein said transaction parameters comprise a quantity indicator related to said at-risk part, and pricing parameters for buying or selling said at-risk part.

40. The automated parts commerce system of claim 37, wherein said transact process comprises an exchange process for conducting an automated transaction for said at-risk part between a single buyer and a single seller.

41. The automated parts commerce system of claim 40, wherein said transact process further comprises an auction process for conducting an automated auction between either multiple buyers and a single seller, multiple sellers and a single buyer, or multiple buyers and multiple sellers.

42. The automated parts commerce system of claim 41 , wherein said auction process receives transaction parameters from each customer participating in the automated auction in advance of conducting said automated auction.

43. The automated parts commerce system of claim 42, wherein, for an auction with multiple buyers, said auction process systematically rotates through each of said buyers and either raises an offering price according to the buyer's transaction parameters or else eliminates the buyer from the automated auction, and, for an auction with multiple sellers, said auction process systematically rotates through each of said sellers and either lowers a sale price according to the seller's transaction parameters or else eliminates the seller from the automated auction.

44. The automated parts commerce system of claim 42, further comprising a notification process for notifying each customer participating in the automated auction and requesting auction transaction parameters.

45. The automated parts commerce system of claim 44, wherein said auction transaction parameters comprise, for a buyer among multiple buyers, an initial offering

LA-184044.1 price, a maximum offering price, and an incremental offering price increase, and, for a seller among multiple sellers, an initial selling price, a minimum selling price, and an incremental selling price decrease.

46. A method for providing an electronic commercial transaction between two or more parties, comprising the steps of: receiving transaction parameters from a plurality of fransaction participants, said transaction participants comprising potential buyers and sellers of specified merchandise; automatically and repeatedly adjusting bids of the fransaction participants according to said transaction parameters until only a single buyer and seller remain; and notifying said single buyer and seller of a successfully completed transaction relating to the specified merchandise.

47. The method of claim 46, wherein said step of receiving fransaction parameters from said plurality of transaction participants comprises the step of receiving said transaction parameters over an electronic network from said transaction participants.

48. The method of claim 47, wherein said step of receiving said fransaction parameters over the elecfronic network from said fransaction participants further comprises the step of receiving a plurality of electronic records over the electronic network from said transaction participants, at least one electronic record from each transaction participant, and wherein said step of automatically and repeatedly adjusting bids of the transaction participants according to said transaction parameters comprises the step of reading said elecfronic records to obtain said transaction parameters, setting an initial fransaction price limit according to the transaction parameters of one of said fransaction participants, sequentially cycling through the fransaction parameters for the remaining transaction participants, adjusting a transaction price level in response to the fransaction parameters for each of the remaining transaction participants, and eliminating fransaction participants whose transaction parameters prevent them from meeting the adjusted transaction price level.

LA-184044.1

49. The method of claim 48, wherein said transaction participants comprise a single potential seller and a plurality of potential buyers, wherein said fransaction parameters comprise, for said potential seller, a minimum starting bid, and for each of said potential buyers, a price ceiling, and wherein said step of automatically and repeatedly adjusting bids of the transaction participants according to said fransaction parameters comprises the steps of: setting a current transaction price level to said minimum starting bid; sequentially cycling through said potential buyers; and for each potential buyer, either increasing said current transaction price level by a predefined amount, or else eliminating the potential buyer if the current transaction price level increased by said predefined amount would exceed the price ceiling of the potential buyer.

50. The method of claim 49, wherein said transaction parameters for each potential buyer comprises said predefined amount for increasing the current transaction price level.

51. The method of claim 47, wherein said transaction participants comprise a single potential buyer and a plurality of potential sellers, wherein said transaction parameters comprise, for said potential buyer, a maximum purchase price bid, and for each of said potential sellers, a price floor, and wherein said step of automatically and repeatedly adjusting bids of the transaction participants according to said fransaction parameters comprises the steps of: setting a current transaction price level to said maximum purchase price bid; sequentially cycling through said potential sellers; for each potential seller, either decreasing said current fransaction price level by a predefined amount, or else eliminating the potential seller if the price floor of the potential seller would exceed the current fransaction price level decreased by said predefined amount.

LA-184044.1

52. The method of claim 51 , wherein said fransaction parameters for each potential seller comprises said predefined amount for decreasing the current transaction price level.

53. The method of claim 47, wherein said step of receiving said transaction parameters over said electronic network comprises the step of receiving said fransaction parameters over the Internet.

54. An automated system for providing an electronic commercial transaction between two or more parties, comprising: a computer system; and a network interface for connecting said computer system to a distributed electronic network; wherein said computer system comprises at least one processor programmed to execute programming instructions stored on a computer readable medium, said programming instructions causing said computer system to perform the steps of receiving transaction parameters from a plurality of transaction participants over said distributed electronic network, said fransaction participants comprising potential buyers and sellers of specified merchandise; automatically and repeatedly adjusting bids of the transaction participants according to said transaction parameters until only a single buyer and seller remain; and notifying said single buyer and seller of a successfully completed fransaction relating to the specified merchandise.

55. The automated system of claim 54, wherein said programming instructions for causing said computer system to perform the step of receiving fransaction parameters over said distributed electronic network comprise programming instructions for causing said computer system to perform the further step of receiving a plurality of electronic records over the electronic network from said transaction participants, at least one electronic record from each transaction participant;

LA-184044.1 said programming instructions for causing said computer system to perform the step of automatically and repeatedly adjusting bids of the fransaction participants according to said transaction parameters comprise programming instructions for causing said computer system to perform the further steps of reading said electronic records to obtain said fransaction parameters; setting an initial transaction price limit according to the fransaction parameters of one of said transaction participants; sequentially cycling through the transaction parameters for the remaining fransaction participants; adjusting a fransaction price level in response to the transaction parameters for each of the remaining transaction participants; and eliminating transaction participants whose fransaction parameters prevent them from meeting the adjusted transaction price level.

56. The automated system of claim 55, wherein said fransaction participants comprise a single potential seller and a plurality of potential buyers, wherein said transaction parameters comprise, for said potential seller, a minimum starting bid, and for each of said potential buyers, a price ceiling, and wherein said programming instructions for causing said computer system to perform the step of automatically and repeatedly adjusting bids of the transaction participants according to said fransaction parameters comprise programming instructions for causing said computer system to perform the further steps of: setting a current fransaction price level to said minimum starting bid; sequentially cycling through said potential buyers; and for each potential buyer, either increasing said current transaction price level by a predefined amount, or else eliminating the potential buyer if the current fransaction price level increased by said predefined amount would exceed the price ceiling of the potential buyer.

57. The automated system of claim 56, wherein said fransaction parameters for each potential buyer comprises said predefined amount for increasing the current transaction price level.

LA-184044.1

58. The automated system of claim 54, wherein said fransaction participants comprise a single potential buyer and a plurality of potential sellers, wherein said transaction parameters comprise, for said potential buyer, a maximum purchase price bid, and for each of said potential sellers, a price floor, and wherein said programming instructions for causing said computer system to perform the step of automatically and repeatedly adjusting bids of the transaction participants according to said transaction parameters comprise programming instructions for causing said computer system to perform the further steps of: setting a current transaction price level to said maximum purchase price bid; sequentially cycling through said potential sellers; for each potential seller, either decreasing said current fransaction price level by a predefined amount, or else eliminating the potential seller if the price floor of the potential seller would exceed the current transaction price level decreased by said predefined amount.

59. The automated system of claim 58, wherein said fransaction parameters for each potential seller comprises said predefined amount for decreasing the current transaction price level.

60. The automated system of claim 54, wherein said programming instructions for causing said computer system to perform the step of receiving said transaction parameters over said electronic network comprise programming instructions for causing said computer system to perform the further step of receiving said fransaction parameters over the Internet.

LA-184044.1