IBM Governmental Programs
IBM’s Global Supply Chain Evolution in Post ITA
Environment
Douglas Gregory
VP IBM Governmental Programs EMEA
© 2003 IBM Corporation
IBM Governmental Programs
Global Supply Chain Changes Since ITA
 IT Supply Chain is Complex
– Supply Chain activities gained prominence in post ITA environment
– Drive to become more responsive, efficient and resilient, to deliver greater
customer value, reduce costs and make cost structure more variable.
– Greater application of IT to a more globally integrated end-to-end operation.
Increasingly many functions outsourced (manufacturing, sales, and logistics).
 Supply Chain Management In IBM:
– Early 1990’s: decentralized geographic and functional departments
– Mid-late 1990’s: Distribution and logistics functions centralized into a global
organization with world-wide responsibility
– Early 2000’s: merger of Customer Fulfillment, Procurement, Manufacturing,
and Global Logistics/Distribution functions into a new global Integrated Supply
Chain function
• Result: cost savings of $5.6B in 2002 and $7B in 2003
© 2003 IBM Corporation
IBM Governmental Programs
IBM’s Supply Chain is Complex, Extensive, Contains high
value items and Controlled Technologies.
1. Request for Quote
3. Purchase Order
4. P. O. Confirmation
2. Quotation
6. Ship Order
/ Instr.
13. Payment Order
14. Remittance
Buyer
Bank
Bank
16. Proof of
Delivery
Supplier
12. Export
Documents
15. Import
Documents
Air Freight
Terminal
at Origin
Terminal at
Destination
5. Shipper Order/Instr.
+ Invoice
+ Packing List
Surface Carriers
7a. Ship Instr. Cycle
Freight Forwarder
Capture
Gate Movement
Terminal at
Destination
Freight Forwarder
8. Gate-in/
Gate-out
8. Gate-out/
Gate-in
10. Bay Plan
9. Bay Plan
Ocean Carrier
Capture
Gate Movement
(Gate-out/in)
Terminal
at Origin
© 2003 IBM Corporation
IBM Governmental Programs
Future Challenges: Security in the Supply Chain
 Pre 9/11 major concern was theft
 Post 9/11 concern is security and prevention of terrorism
 Security enhancements are needed
– Governments and industry must work together
– Society should not have to sacrifice the efficiencies that have been
built into the system
– i.e., security and efficiency are mutually reinforcing
 Opportunities for enhanced trade efficiencies
– Harmonized and Transparent Customs Procedures
– Automation
 Must ensure changes support further trade in IT
© 2003 IBM Corporation
IBM Governmental Programs
Conclusions
 The supply chain is complex, globally integrated and extends beyond the
enterprise to third parties.
 Changes to the supply chain are being driven by company efforts to deliver
better customer value, reduce costs, increase responsiveness and
resiliency.
 IT duties and customs barriers are factors in internal business optimization
and location decisions.
 New challenges are on the horizon as governments develop strategies to
address security concerns.
 Security and efficiency are mutually reinforcing.
 Supply Chain complexities make government-industry partnership
essential.
 Traditional trade facilitation issues and platforms provide an opportunity to
expand global IT trade and also address new security concerns.
© 2003 IBM Corporation