IBM transforms its own supply chain success into revenue stream
By Staff -- Manufacturing Business Technology, 10/1/2005 12:00:00 AM
Ranked by Boston-based AMR Research as having the top-performing supply chain in the world, IBM says it will leverage that capability to offer outsourced supply chain services. IBM views such transformational services as a high-growth market capable of 10-percent to 15-percent growth—significantly higher than its traditional hardware business, and potentially worth $23.5 billion.
According to an August report on supply chain management consulting and integration services, put together by Stamford, Conn.-based Gartner, IBM earns top billing for both vision and ability to execute on such a plan, nosing out Accenture, and staying well ahead of BearingPoint and Capgemini.
According to research findings from Framingham, Mass.-based IDC, 51 percent of all companies recognize that supply chain management is not a core competency, and 70 percent say they would pay a premium for help.
Cambridge, Mass.-based Forrester Research says IBM has both the track record and the expertise to do well, indicating IBM generated some $20 billion in savings in transforming its own supply chain, "reducing inventory to historic lows, and improving sales productivity by 25 percent."
Frank Crnic, director of supply chain growth initiatives, IBM, says of the three key focal elements in the service—procurement, logistics, and supply chain optimization—the first two comprise the most easily replicable pieces.
Forrester says supply chain optimization is where IBM "has yet to explain how it will leverage its labor supply chain optimization techniques. The ability to orchestrate a global trading network will require a real-time decision-support solution that can continuously find new opportunities for improving labor utilization and meeting client needs for specific skills."
