Right now each functional unit within the Integrated Supply Chain, including procurement, is drawing up a translation of the on demand vision for its team members. Within procurement, the members are saying specifically how they interpret what on demand will mean in their organization and how they will link their initiatives to the rest of the ISC. They're trying to paint a picture of what on demand will look like. For example, imagine how it will feel when a customer is able to interface with a sales rep, ask a question about availability, and instantaneously the sales rep has that information at his fingertips. He doesn't have to go out and ask a half-dozen people or wait until someone gets back to him, because we'll have the tools and the data and the processes in place to enable that kind of fast ask-answer interface with our customers.
From a procurement standpoint, the members must think about how they are going to enable the supplier piece of this, particularly in a world where services are such an important component and where many of the solutions that the company is selling to customers have third-party content. How is the procurement organization going to get the company's suppliers ready for this? How are they going to enable the IT so they're not looking just at purchase orders and invoices but at real business information? Certainly in manufacturing they've dealt with some of these issues for a long time, but it's fairly new to those on the services side.
S&DCE: What are the new skills, or new ways of thinking, that are going to be necessary within your supply chain organization in order for the on demand supply chain to be successful?
Cantwell: I should mention that previously, when we were more siloed organizations, we looked at this skills question independently. Now, as we have become an integrated global operation, we are very much combining our efforts, and we have singled out five core capabilities that are going to be critical regardless of where in the Integrated Supply Chain one resides.
First of all, there has got to be a core capability in understanding and demonstrating a passion for the customer. Because, as I said before, what the company is trying to do is make sure that, from an Integrated Supply Chain standpoint, we're focused on improving the customer experience in addition to the cost-management aspects that are typically associated with supply chain. There are a lot of people in the ISC today who have been more focused on the operational aspects of the supply chain and haven't been as tied to the customer-facing processes. What Bob Moffat has done is to link the customer-facing processes all the way back through the supply chain to the folks that support manufacturing — like those who deal with suppliers. So what we're saying now is that we all have to have strong skills around what it means to properly serve IBM's customers.
Second, because of the relative newness of the ISC organization, and the newness of the on demand strategy, the company has identified a core capability that will be developed across the team in terms of how they will support and properly execute against the ISC strategy.
Next, the company is already dealing with the fact that we're multi-functional in nature because the Integrated Supply Chain is made up of a number of the different business operations, but we're also operating in 59 countries, so the third core capability that we've identified is that our people must be able to perform in a global, multi-functional environment.
The fourth capability sounds pretty generic, but the ISC teams have to be able to demonstrate supply chain concepts. They've got to be able to understand, first of all, the basics of supply chain principles, but importantly — and this is where the skill development comes in — they also need to be able to adapt that knowledge to an ever-changing business situation. That's specifically a challenge for my former team members because supply chain concepts have very traditionally been tied to manufacturing, whereas today we are in a services-oriented environment, and supply chain principles don't necessarily resonate with those folks yet. The ISC is very aggressively working with the team members to develop the skills necessary to apply supply chain techniques in an environment where the company is selling services or an integrated business solution to a customer. They are applying supply chain practices to consulting, IT services and businesses where nobody has ever used supply chain principles. That's essential for a company like IBM when one-half of our revenue is service related.