IBM tunes workforce planning to supply chain precepts
By Staff -- Manufacturing Business Technology, 5/1/2006 6:00:00 AM
As IBM sheds its product centricity and migrates toward services (see story, page 12), it is applying supply chain modeling, inventory, planning, and allocation techniques to its own workforce so as to be more responsive to demand.
"Our services business has been growing at 15-plus percent year-over-year. More than 50 percent of the workforce is services-oriented," says Mark Henderson, IBM's manager of workforce optimization. "We needed to aggregate that resource, and the way to get at that is using supply chain principles adapted to the services world."
IBM initiated the project with a corporatewide review of its skills-classification system. It reduced 10,000 job descriptions to 524, with the goal of having one million people classified under the new taxonomy by the end of the year.
"We've taken labor for granted in this area," says Lora Cecere, a director for Boston-based AMR Research's supply chain strategies group. "We've looked upon it as 'payroll,' but we are in a space now where labor is a primary constraint."
An IBM-developed workforce-management application called Professional Marketplace acts as a kind of inventory management system for matching knowledge workers to service engagements. IBM also is developing a resource capacity-planning application called Hot Skills Index to better anticipate skills demands, and establish training and development to ensure resources are properly staged as demand spikes.
"I do see the link in applying supply chain principles—especially the modeling principles," says Raghu Santanam, director of research at the Center for Advancing Business through Information Technology, Arizona State University. "But in that you're dealing with human resources, the complexities are huge from both an implementation and a modeling perspective. The theory is so new that there is some uncertainty about how effective it will be."
But the business drivers are compelling, Santanam adds. "Clearly it is because we are in a knowledge economy today, especially in services. Obviously you can grow because you innovate, but you can better innovate by using the skills of your human resources."
Early returns are encouraging; IBM has seen a 7-percent increase in staff utilization, while greater visibility into skill-set location has enabled better use of local resources, with less time spent traveling to get to the job.
