60 seconds with... Gary Smith

Gary Smith on how to optimize the supply chain from end to end

By Staff -- Modern Materials Handling, 6/1/2005

Last year, IBM shipped 2 billion pounds of hardware and parts to more than 160 countries around the globe. That said, our primary focus is on optimizing the supply chain from end to end. There are four keys to getting this done.

First, we always need to align our supply chain to the business plan. If we're not aligned, the supply chain will remain a cost of business and not a strategic advantage. This requires each segment of the supply chain to look both upstream and downstream and take both into consideration when making decisions.

Second, there must be integrated processes across the entire supply chain, not just in manufacturing, for instance. That requires functional excellence in each segment. But there can be tradeoffs. We might opt to spend a nickel more in purchasing to save a dime in manufacturing.

Third, we have talented people who have developed their skills as well as global awareness. As a global business supported by a complex operational network we focus on establishing deep roots locally and leveraging our multinational presence for operational advantage.

And fourth, enabling technologies are critical to our success. IBM has outsourced all physical logistics to become more variable and responsive to market demands, but this is only possible with leading edge technology. This enabled us to work more collaboratively with our suppliers and partners and achieve the lowest inventory levels in the last 30 years.