Experience: Order For Supply Chains

IBM says that reinventing its supply chain helped to eliminate more than $7 billion in costs in 2003.
Some companies promising to help other businesses bring order to their supply chains include vendors that say they've learned from experience.

IBM, for example, attributes its ability to eliminate more than $7 billion in supply- and supplier-related costs and expenses in 2003, up from $5.6 billion in the previous year, to the reinvention of its supply chain. As part of that plan, one executive in the company is responsible for all pivotal supply-chain functions: Bob Moffat, senior VP of IBM's Integrated Supply Chain group, now reports on supply-chain progress at the chairman's biweekly operations meeting. Efficiencies have come in part from using more commodity components and consolidating suppliers to leverage the company's size and buying power.

Electronics distributor Avnet Inc., which also offers supply-chain services, has fine-tuned its own processes. In July, three executive board members were appointed to an advisory committee to review sales, logistics, and supply-chain business processes across the company. They will regularly report the committee's progress to the executive board. CIO Ed Kamins analyzes supply-chain practices. Analysts say that optimized business processes across the company were one factor in Avnet's uptick in revenue for its second fiscal quarter of 2004. --Laurie Sullivan

Return to the story: Sign On For Supply-Chain Services

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