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Where is the C-Level in Supply Chain?. Objectives: 1) Introduce IBM 2006 Global CEO Study 2) Demonstrate IBM’s Supply Chain Transformation 3) Show examples of current Supply Chain Initiatives. Global CEO Study 2004. Global CEO Study: 2004.

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Objectives:

1) Introduce IBM 2006 Global CEO Study

2) Demonstrate IBM’s Supply Chain Transformation

3) Show examples of current Supply Chain Initiatives


Global ceo study 2004
Global CEO Study 2004

Global CEO Study: 2004

In 2004, growth was a top priority, with a focus on strengthening financial performance

While growth and cost reduction remains a priority, the 2006 study reveals a shift in thinking – and cites Innovation as a key priority

2006


Areas of innovation

Innovation is about Business Models and Operations, as well as Products, Services and Market

Areas of Innovation

BUSINESS MODELS

OPERATIONS

PRODUCTS, SERVICES, AND MARKETS

Innovation to improve effectiveness and efficiency of functional areas

Innovation to restructure and extend the enterprise

  • Improving functions and processes

  • Integration with partners

  • Enhancing communication & collaboration

  • Eliminating redundancy

  • Increasing organizational effectiveness


Sources of innovation

Global CEO Study 2006: Sources of New Ideas and Innovation

Employees (general population)

Business partners

Customers

Consultants

Competitors

Associations, trade groups, conference boards

Sales or service units

R&D (internal)

Academia

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Sources of Innovation

‘Two of the three most significant sources of innovative ideas now lie outside of the organization’



The isc transformation began over 10 years ago
The ISC Transformation began over 10 Years ago

Revenue: $64B Profit: $3B

RESULTS

SUPPLY CHAIN

JOURNEY

Cost Center

Profit Driver

  • Fragmented and not mission critical

  • Functional silos

  • Heavy asset based logistics

  • No common processes

  • Large number of legacy applications

  • Drives value primarily by saving money and increasing cash conversion

  • Still primarily product focused

SUPPLY CHAIN

EVOLUTION


Increased Inter-Business Unit Communication

Previously ‘Functional Silos’ were brought together under the ‘Integrated Supply Chain’

BREADTH

OPERATIONS

TEAM

STRATEGY

TEAM

TALENT

TEAM

MANUFACTURING

PROCUREMENT

CUSTOMER FULFILLMENT

GLOBAL

LOGISTICS

DEPTH

TECHNOLOGY

COMMON DATA & GOVERNANCE


IBM Global Logistics continues to deliver significant business value...

Global Logistics Savings - $1.2B Over 10 Years

Cost-To-Revenue

1252

1159

GL HW Cost ($M)

IBM HW Revenue ($B)

1037

M Dollars

886

763

632

510

348

193

59

1Q01

3Q01

1Q02

3Q02

1Q03

3Q03

1Q04

3Q04

2Q01

4Q01

2Q02

4Q02

2Q03

4Q03

2Q04

4Q04

IT Applications

Internal Customer Value

93% 95% 96% 93% 97% 97% 97% 98% 98% 99% 99%

Many….to some….to few….


And achieved impressive 2005 results

INVENTORY AT THE business value...

LOWEST LEVELS IN

YEARS

+1%

30

IMPROVEMENT IN OVERALL CLIENT SATISFACTION

And achieved impressive 2005 results

IBM: $91B REVENUE NET INCOME $10.6 #2 IN CUSTOMER SATISFACTION

Financial Results

Operational

Results

Client Facing Results

Another

*

TURNING

ORDERS

$6B

COST AND

EXPENSE

SAVINGS

*

32%

FASTER

CYCLE TIME

PERFORMANCE

+6%

$580M

CASH GENERATED

*

25%

IMPROVEMENT

IN SALES FORCE

PRODUCTIVITY

AVERAGE PAYMENT

TERMS IMPROVED BY 2 DAYS =

$166M

* Accomplished in 2004, but held steady for 2005


What s next
What’s next business value...

2006

Revenue: $91B Net Income: $10.6B

RESULTS

Global Integration: Leveraging Our Multi-national Presence for Operational Advantage

SUPPLY CHAIN

JOURNEY

Profit Driver

Business Optimization

  • Goes beyond products to services

  • Extends success past financial metrics

    • Impacts customer satisfaction

    • Impacts sales team productivity

  • Fully synchronizes supply and demand

  • Sharing ISC best practices with clients

SUPPLY CHAIN

EVOLUTION



Paperless logistics processing
Paperless Logistics Processing business value...

  • Greater paperless visibility

  • Faster transmission times

  • Supply Chain Partners can pull/post documents

  • Can scan directly from IT interface, or Scanner/Printer

International Shipping Documents

Import Brokerage Documents

Bank

Documents

Payables Documents

Other Documents

Export Invoice

Paperless Document Repository

Shared Access for all users


Cargo security

= accredited entity business value...

= various sensors

signed evidence, documentation, location

ManufacturerDistributor

FreightForwarder

Port Authority “A”Customs

Port Authority “B”Customs

DistributionCentre

Ocean Carrier

Ocean Carrier

Cargo Security

  • TREC: Tamper Resistant Embedded Controller

  • Location tracking

  • Door lock tampering

  • Humidity and temperature

  • Radiation

  • Dropped container sensors

TREC


Supply chain bto in response to customer needs

Process Enhancement business value...

Process Improvementwhile Outsourcing

Supply Chain BTO – In Response to Customer Needs

The Integrated Supply Chain has introduced a new offering to help clients transform their businesses through outsourcing

BTO

Business Transformation OutsourcingAddresses tactical and strategic initiatives

Extended Enterprise

Continuous Strategic Change while Outsourcing

Process Change

Business Process Outsourcing

Targets cost reduction for specific process

Cost Reduction

Cost Take Out

BPO

Return on Investment


Summary where is the c level in supply chain
Summary: business value...Where is the C-Level in Supply Chain

Myth: Innovation is too critical and proprietary to involve outsiders

Collaborative innovation is indispensable

Myth: Innovation means inventing new products and services

Business model innovation matters

The C-Level is increasingly looking to theSupply Chain to drive Business Value


Contact Information: business value...

Dipan Karumsi

Business Consulting Services

Logistics Practice

[email protected]

Ph: 614.537.4575


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