IBM Aims to Boost Supply Chain Performance

Adopting E2open software to improve interactions with top manufacturing suppliers

Adopting E2open software to improve interactions with top manufacturing suppliers

Armonk, NY  March 3, 2004  IBM is set to work with E2open, a specialist in inter-company process integration, to improve the way it works with its top manufacturing suppliers.

As part of its ongoing supply chain transformation initiative, IBM will use E2open's Multi-Company Process Management application software to manage its supply and demand collaboration processes with these suppliers, which together represent more than 85 percent of IBM's annual manufacturing procurement expenditures.

Starting this year, IBM will use E2open to support its demand/supply planning and execution capabilities. By using E2open, IBM is aiming to gain greater visibility into its suppliers' inventory and supply operations, with the goal of allowing the company to quickly respond to changes in customer demand by aligning forecasts with procurement activities, monitor suppliers' inventory levels, proactively evaluate exceptions and automatically trigger replenishment cycles.

Big Blue also will be counting on E2open's software to help minimize supply disruptions and reduce excess inventory flowing through IBM's supply chain. As a result, IBM expects to reap operational efficiencies within its supply chain.

With one of the largest and most complex supply chains in the world, IBM relies on a number of key suppliers to meet its needs in manufacturing, fulfillment and supply chain logistics. The company orders more than two billion component parts a year.

With the real-time information capabilities that E2open will provide to IBM's demand/supply process, IBM expects to be able to better align customer demand with its own procurement needs. The company anticipates that this will enable more informed and timely decision making across its supply chain, leading to better customer service and greater supply chain efficiency.

The E2open software is built on a WebSphere and DB2 platform using open B2B standards. E2open has certified WebSphere Business Integration Connect as a connectivity option for suppliers seeking a secure way of integrating their current systems with the IBM supply chain.

"To make the transition to e-business on demand, companies like IBM need to make their supply chains much more flexible and responsive," said Ian Crawford, vice president for production procurement at IBM. "As the use of solutions like E2open's becomes more widespread, IBM and other hardware manufacturers will be laying the foundation for true end-to-end process integration across the entire supply chain ecosystem."

Today, IBM's supply chain begins with product design and includes processes for lead management, the creation of customer proposals, component sourcing, procurement, manufacturing, fulfillment, customer service, billing, accounts receivable and aftermarket services. In 2003, IBM says that improvements in supply-chain management reduced the company's cost and expense by more than $7 billion.

Robert W. Moffat, Jr., senior vice president for integrated supply chain at IBM, has been named one of Supply & Demand Chain Executive's 2004 Pros to Know. Read more about his work at IBM in the Pros to Know article in the February/March issue of Supply & Demand Chain Executive.
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