Supply chain management

Results-oriented solutions focusing on customer service, product quality, cycle time, asset utilization,
operational flexibility, supply/demand synchronization and financial performance improvements

Overview
Change is pervasive, necessary, and critical in today’s complex global network. Understanding the
various paths and pitfalls of change, or the Landscape of Change, is critical for supply chain managers
who wish to safely navigate through its opportunities and dangers.
New imperatives including emerging markets, sustainability, and heightened risks require that supply
chain leaders understand the need to drive change smartly and effectively. In addition, global integration
is rife with challenges and requires that successful leaders start with a unified vision, executive
leadership, and the best and brightest of talent. And building “Green” and profitable integrated supply
chains through new practices and models such as Design for Environment (DfE) and carbon footprinting
is yet another process that supply chain leaders from around the world agree is integral to success.
Business challenges

 Increased globalization through outsourcing, which elongates end-to-end supply chains

 Additional regulatory compliance imposed by government entities, further complicating
international trade
 Increased levels of economic uncertainty, which create additional variability in supply and
demand
 Shorter product lifecycles and rapid rates of technology change, which increase inventory
obsolescence
 Demanding customers who have created additional time-to-market pressures by requiring better
on-time delivery, order fill rates and overall service level efficiencies
 Supply side capacity constraints that make it more difficult to meet demand requirements
 Natural disasters and external environmental events that wreak havoc on global supply chains

"Supply chains are no longer viewed as a backroom operation,

but are a critical boardroom issue with direct links to financial
results."

Sanjeev Nagrath
Global Supply Chain Management Leader, IBM Global
Business Services

Why IBM
What sets us apart is the credentials of our people. All senior-level consultants possess a minimum of
nine years of supply chain experience across various industries. A number of our consultants are
published in leading supply chain journals, and several of our practitioners hold patents in areas related to
SCM. More than one out of every four team members holds a Masters or higher degree in SCM-related
fields (operations research, industrial engineering, applied mathematics, etc.) and more than 200 of our
consultants hold Ph.D.'s in relevant fields. All application consultants attain “vendor certification” status in
one or more supply chain applications.
Our comprehensive supply chain management (SCM) offerings address every phase of the supply chain,
from design to source to plan to build to distribute. We have one of the broadest portfolios of alliances
with leading and emerging supply chain vendors, such as SAP, Dassault Systèmes and i2 Technologies.
As a single source for supply chain management, IBM Supply Chain Management Services can help you
address the full supply chain spectrum and help move companies from a lagging to a leading position in
their industry.

Complex supply chain optimization

Rapidly changing global markets of supply and demand create relationships that drive the need to
optimize manufacturing and distribution of products across an ecosystem.

Service detail
Complex supply chain optimization results from rapidly changing global markets of supply and demand.
This creates relationships (partnerships, joint development & manufacturing, etc.) that drive the need to
optimize manufacturing and distribution of products across an ecosystem.
 
Highlights
IBM has extensive experience in addressing advanced supply chains and supply chain
optimization, and can provide solutions to integrate a sophisticated set of analytic tools so that
businesses can readily assess options and respond.
SAP has certified that the IBM Dynamic Inventory Optimization Solution properly integrates with the
SAP NetWeaver® Exchange Infrastructure (SAP NetWeaver XI) component of the SAP NetWeaver
platform to exchange critical data with instances of mySAP™ Business Suite applications.

As manufacturers and retailers expand into global markets and exploit global multi-sourced supply
arrangements, complex supply chain optimization represents a significant opportunity to lower costs,
reduce assets, and increase market share through reduced time to market and on-shelf availability.

Inventory Optimization Solution:

Planning optimal inventory levels based upon manufacturing and warehousing requirements is a key
strategic step towards world class Supply Chain Management. One component of the CBO Inventory
Optimization Solution set is the Dynamic Inventory Optimization Solution (PDF, 209KB), which
includes a stand alone software tool built around warehousing methodology used to analyze and optimize
inventory, multi site or single echelon. This solution provides a set of tools that mine client data on
ordering and stocking patterns to dynamically reset optimal inventory targets. (Includes SAP NetWeaver
XI Certification). Operations executives can minimize investment in raw materials, finished goods and
service parts freeing up capital while reducing write offs due to obsolescence. This solution has been
delivering client value in more than 40 deployments since 1998.
Production Design and Operations Scheduling Solution:

Developing optimal product design and production plans requires integration of both customer orders with
manufacturing production capacity and capabilities. IBM has solved this problem for several clients in the
metals industry with the Production Design and Operations Scheduling Solution for Steel (PDF,
187KB). This solution includes a customized suite of algorithms using mathematical programming
expertise to design slab production and schedule caster sequencing. IBM has repeatedly solved client
issues by deploying this solution to develop a feasible operational level production design and scheduling
system that is cognizant of the batch constraints of a production facility to improve yield, thus delivering
significant savings for our clients.

IBM Asset Management Solutions

Improve productivity, reduce maintenance costs, and maximize service levels of your field operations
through effective asset management services.

Overview
In most sectors, physical assets dominate the balance sheet and provide key levers to improve operational
effectiveness. Organizations looking to realize efficiencies and achieve a competitive edge are adopting a responsive
and agile approach to managing their assets.
IBM has an outstanding track-record helping organizations of all sizes succeed in revitalizing their approach to asset
management. Our industry-leading services, expertise, and intellectual capital give our clients the ability to plan,
procure, deliver, manage and improve reliability of their assets to support their core business, reduce risk and deliver
real business value.
Learn more about our capabilities across the range of asset classes:

Logistics
With the emergence of improved visibility and fulfillment tools, logistics has emerged as a key area of
many companies' supply chain operations.

Real Estate and Facilities

Best-practice property and construction management can reduce real estate costs by 15-20%.
Real estate and facilities change can be used to leverage business transformation, enhance
agility, improve customer service and contribute to staff retention.

We can identify and help execute the changes required to achieve best practice in all aspect of
corporate real estate and facilities management:

 Portfolio strategy and planning

 Procurement strategy and implementation
 Process and organisation transformation
 Workplace transformation
 Construction program management
 Real estate and facilities systems
 Sustainable real estate and facilities management

Plant and Production

Recognizing the trade-offs between capital and operating expenditure can reduce an
organization's working capital and significantly impact its bottom line. Our structured approach
to total lifecycle asset management balances the influence of procurement, operations,
maintenance and logistics support on asset performance. IBM can help you:

 Increase asset utilization, output and economic life

 Improve the reliability of systems and components
 Lower capital investment and maintenance costs
 Reduce the number of systems and components

Mobile Assets

In addition to maintenance cost and availability, fleet managers must place increasing focus on
fuel prices and capital management as a way to manage the total lifecycle cost of critical mobile
assets.

Our experience in helping clients achieve performance benefits in fleet and maintenance
management covers a wide range of sectors:

 Road transport
  Logistics and distribution
 Extraction of natural resources
 Aircraft and ground support equipment
 Rail
 Construction equipment

IBM's expertise in business transformation, mobile workforce management, asset management

systems, procurement and program management, help our clients achieve these goals time after
time.

Information Technology

Most organizations now place heavy reliance on the use of information technology and systems
assets to sustain their operations. As the number, complexity, mobility, and value of these assets
increase, IBM Asset Management offers a variety of business solutions to help clients:

 Meet internal control requirements

 Facilitate IT/IS procurement decision-making
 Guide space management for IT assets
 Assess compliance with security standards
 Facilitate service desk and change management operations

Infrastructure

Asset-intensive companies, such as regulated utilities, telecommunications providers and energy

companies, face specific challenges in managing their assets:

 Maximizing return on asset investment

 Increasing equipment utilization
 Reducing maintenance costs
 Improving productivity and service levels

IBM's expertise in business transformation, mobile workforce management, asset management

systems, procurement and program management, help our clients achieve these goals time after
time.
Service detail
Logistics focuses on assisting clients in the management of goods through the supply chain. With the
emergence of improved visibility and fulfillment tools, logistics has emerged as a key area of many
companies' supply chain operations.
 
Highlights
The effective implementation of new technologies in warehousing, transportation, and reverse
logistics has resulted in significant cost reduction and customer service improvement.

Our supply chain management services comprise a full range of logistics offerings, including:

 Logistics strategy and network optimization

Utilize analytical and requirements based methodology to develop a customized and responsive
solution to address logistics network optimization opportunities.
 Warehouse process improvement and systems implementation
Implement process and technology change to improve warehouse operations. Includes assisting
clients with:
o Distribution process envisioning
o Software selection and implementation
o Warehouse layout and design
o Material handling equipment selection
o Developing deployment strategies around the utilization of advanced technologies (e.g.,
RFID).
 Transportation process improvement and systems implementation
Implement process and technology change to improve transportation operations. Includes
assisting clients with:
o Transportation process envisioning
o Core carrier program development
o Software selection and implementation.

Special focus is given to optimizing customer satisfaction through improved delivery performance
while achieving the lowest possible carrier costs.

 Labor management process improvement and systems implementation

Implement process and technology change to improve warehouse labor productivity. Labor
tracking and management allows for:
o Real-time tracking of employee time
o Calculation of estimated task time
o Comparison of records actual vs. estimated task time
o Reporting on labor performance and efficiency
o Monitoring of direct vs. indirect labor
o Linking of performance to compensation.
 Reverse logistics process improvement and systems implementation
Implement process and technology change to improve the management of returns. Includes
assisting clients with:
o Returns process envisioning
o Software selection and implementation.

Special emphasis is placed on reengineering the flow of returned goods based product
disposition and value.
Logistics business transformation outsourcing
Consider the logistics outsourcing provider business model for greater scope and deeper integration

Service detail
The logistics outsourcing provider business model is evolving to offer greater scope and deeper
integration. Currently, logistics outsourcing models include: transport, warehousing, customs brokering;
third party logistics providers (3PL's) and freight forwarders; lead logistics providers; and supply chain
integrators. Each type of model has different attributes with regards to client relationships and pricing
arrangements. IBM's approach to logistics outsourcing is to deliver improved business results through
continuous strategic change and the transformation/operation of a client's business measured against C-
level executive business outcomes.
 
Highlights
IBM goes beyond just addressing a client's pain points in the short term and demonstrates
sustained value and innovation over the strategic horizon. IBM's Logistics Business Transformation
Outsourcing solutions address the challenges experienced by clients in the logistics space:

Financial Pressures

 Erosion of margins
 Logistics costs rising as a % of revenue
 Shareholders demanding faster ROI
 Shift to a more variable cost structure
 Need to focus on core business & shed assets
 Cohesive logistics strategy across enterprise

Multiple Logistics Providers in a Global Network

 No single optimal logistics provider

 Need for global consolidation / aggregate spend
 Commoditization
 Downward rate pressure
 Need more control, cost efficiencies, governance model with providers

Flexibility, Reliability, & Responsiveness

 Customers are expecting higher visibility & reliability

 eCommerce with immediate order / shipment tracking
 Dynamic routing
 Inventory optimization for cost reduction and just in time delivery
 RFID mandate
Global Expansion

 Sourcing / Manufacturing in China & Eastern Europe

 Global competition increasing
 Growth through acquisitions generates inefficiencies
 Increasing government regulations for earlier data, accuracy and security

Our Logistics Business Transformation offering is built on the success and innovation of IBM's own Global
Logistics operations. IBM's Global Logistics Network is secure, robust, scalable and reliable. It has
delivered a proven track record of on time performance and availability. Because IBM's logistics
infrastructure is scalable and has "plug & play" supplier capability, we can easily and quickly extend our
solution for clients.
There are the four service areas in the IBM Logistics Business Transformation Outsourcing offering
framework:

(1) Logistics Strategy, Network Design and Development

 Translate business needs and priorities into logistics requirements

 Logistics network modeling and business case development
 Logistics operations design: organization, process, IT, measurements
 Best/proven practice guidance

(2) Logistics Services Procurement

 Sourcing strategy development & Industry Knowledge

 Supplier evaluation, selection, and contract management
 Supplier cost and service management
 Supplier relationship and performance management

(3) Logistics Operations Management

 Day to day logistics network management

 Integrated in-transit visibility, event management, order status, operations metrics
 Supply chain total cost & network optimization
 Claims processing
 Logistics supplier payment and audit
 IT integration and management
 Logistics operational guidance

(4) Logistics Global Trade Management

 Global trade (import / export compliance) process management

 Government and Customs relationship management
 Duty & tax accuracy and payment minimization
 Supply chain security management
 Global and country specific shipping procedure management
Procurement
Procurement focuses on those business pressures that are driving companies to improve the
effectiveness of their procurement operations to achieve better advantaged pricing, greater efficiency,
tighter control of spend and improved service levels.

Service detail
Procurement focuses on those business pressures that are driving companies to improve the
effectiveness of their procurement operations to achieve better advantaged pricing, greater efficiency,
tighter control of spending and improved service levels.
 
Highlights
This service area leverages IBM's strength and experience in procurement to enable our clients to
better manage their enterprise spend.

Our supply chain management services comprise a full range of procurement offerings, including:

 Procurement strategy and opportunity assessment

Centered around strategic sourcing and the associated enablers such as spend analysis, process
re-design and governance and compliance. We deliver assignments focused on:
o Procurement strategy
o Opportunity assessment
o Accelerated sourcing
o Process reengineering
o Strategic sourcing
o Supplier relationship management
 Strategic sourcing
Analysis and prioritization of key commodities for:
o Aggregation of spend and contract leverage to identify optimal spend leverage
o Implementation of governance and controls to realize the identified savings.
 Application implementation
For e-procurement and ROI / benefits realization:
o Package selection
o Software integration
o Content management
o Supplier enablement

We are an integration partner for Ariba, SAP, Oracle, i2 and Perfect Commerce.

 Managed solutions
o Procurement business transformation outsourcing (BTO)
o Leveraged procurement services (bundled services and technology)
o Hosting and application management services
 IBM Leveraged Procurement Services
IBM Leveraged Procurement Services is part of an important category of services which offers
the delivery of standardized business processes, applications and infrastructure over the network
via an e-business on demand environment. IBM Leveraged Procurement Services is designed to
 provide an affordable solution with low risk and minimal investment for managing indirect spend.
This offering combines best-of-class:
o Process
o Hardware
o Software
o Integration and hosting services
o Advantaged pricing from pre-established supplier relationships
o Financing

into a single end-to-end package that is scalable and customizable. Ketera Technologies and SAP
provide the engines for our leveraged procurement services offerings.

Product Lifecycle Management (PLM)

Enable effective engineering design collaboration for faster time-to-market with more innovative and
competitive products for revenue growth, cost reduction and asset utilization.

Overview
Today's business environment is increasingly complex with organizations facing global
interconnectedness, accelerated industry transformation, growing volumes of data and rapidly evolving
customer preferences. Despite this, companies must be prepared to act decisively and remain flexible
enough to adjust course as necessary.
Product Lifecycle Management (PLM) enables engineering collaboration for innovative design and
analysis. This can help your company reduce costs, accelerate time-to-market, and help improve new
product introduction success in order to maintain a competitive edge and foster growth. PLM is a set of
capabilities to enable the integration of your organization’s product definition across business functions,
processes, organizations and geography. The PLM solution manages the development and support of
complex product definition and services throughout their entire lifecycle, from product design, to product
build, to post-sale support.
Business challenges

 Learning to manage the complexity and effectiveness of product development, testing and
support
 Moving toward common processes and technologies for overlapping developing organizations
within a company, and sunsetting antiquated legacy systems
 Developing engineering process design models to meet customers’ demands regarding product
differentiation and customization
 Continuous education for emerging talent with different approaches to work, collaboration and
technology
 Establishing proof of compliance and risk mitigation controls throughout the product lifecycle
 Overcoming the continued distribution of design and supply chain investment and risk, which
pushes the limits of technology and organizational capability for effective collaboration

What we offer:

1. Transformation services:
o Strategy and organizational change management for PLM processes
 o Client product development and systems engineering assessments
o Best practices for product data creation, management, collaboration and retention
o Global integration framework development supporting systems, data and processes
o First-of-a-Kind (FOAK) projects through IBM Research

2. Implementation services:
o Implement next generation of PLM CAD/CAM and PDM systems with enhanced
capabilities and global collaboration while sunsetting legacy systems and reducing cost.
o Package selection, integration and implementation services for leading-edge PLM
offerings from leading technology suppliers.
o Design, development, testing and deployment with support from our Global Delivery
Centers

3. Management services
These services leverage the breadth and scale of IBMs® Global Business Services® support
capabilities to the PLM environment. To improve cash flow and provide a cost-effective PLM
systems environment, we can specifically address infrastructure, application support and hosting
needs.

Industries we support:
o Aerospace and Defense
o Automotive
o Consumer Products
o Electronics
o Energy
o Industrial Equipment
o Medical Devices
o Pharmaceuticals
o Public Sector

Our strategic PLM alliances:

o Dassault Systèmes
o Oracle
o PTC
o SAP
o Siemens

Why IBM
IBM Global Business Services PLM practice employees are degreed and experienced engineers with
industrial experience and track records of success. IBM can help clients launch improved processes and
technologies faster through our Centers of Excellence (CoE), an extensive partner network, IBM
Research and IBM Global Delivery Centers.
IBM has a proven track-record of delivering advanced solutions in a variety of industries and markets.
PLM provides our clients with innovation for measurable and real-world business value; a collaborative
network of resources, partners and associations; integration capabilities for insight and competitive
advantage; and experience as a globally integrated enterprise.
There is considerable synergistic value for clients when IBM PLM Services, PLM software solution
providers and clients work together. This includes deep PLM process and industry knowledge from IBM
and PLM independent software vendors (ISVs), accelerated deployment and solutions implementation
with reduced project risk, and best practices adapted to the client.

Supply chain enterprise applications

Our solutions help existing ERP clients who are expanding their existing ERP solution and new clients
about to integrate an ERP across their supply chain.

Service detail
Supply chain enterprise applications assist clients with the integration of enterprise resource planning
(ERP) solutions across their supply chain to allow seamless exchange of information. ERP vendors are
continuing to expand the breadth of integration through the supply chain.
 
Highlights
Our solutions help existing ERP clients who are expanding their existing ERP solution and new
clients about to integrate an ERP across their supply chain.
These services cross all industries and include SAP, Oracle and PeopleSoft as strategic vendors.

Our supply chain management services comprise a full range of enterprise application offerings,
including:

 Package selection
Assist clients in determining which ERP package best meets their requirements.
 Business process improvement, design and implementation
Assist clients in the implementation of their ERP solution. These services utilize toolkits that
contain:
o Accelerators
o Standard tools
o Sample deliverables and solution ready for use and accessible "out of the box"

These toolkits also contain templates for process and system reengineering to accelerate the
ERP delivery and expected benefits. In addition, to help reduce costs, we leverage existing
systems as much as possible.

 Training and learning services

Facilitate clients' knowledge of their ERP solution through multiple types of training techniques.
 Version upgrades
Bring clients up to the latest version of their ERP solution. The upgrade may include extending
the capabilities of their ERP solution with new modules.
 Systems harmonization
Synchronizing the multiple instances of ERP systems across the entire enterprise onto a common
version of the software to optimize functionality and minimize errors caused by back level
releases.
Supply chain operations
We provide results-oriented solutions focusing on customer service, product quality, cycle time, asset
utilization, operational flexibility, and financial performance improvements.

Service detail
Supply chain operations provide organizations with the ability to recognize operational improvements
across many areas of their value chain.
 
Highlights
Focus areas range from customer service, product quality, cycle time, asset utilization, and
operational flexibility to finance and promotions management.

Our supply chain management services comprise a full range of operations offerings, including:

 Operations improvement and transformation

Design and implement processes across all elements of a company's extended supply chain,
including:
o Supply/demand integration
o Manufacturing
o Customer fulfillment
o Inventory management
o Order management
o Sourcing
 Asset management
Solutions to manage the maintenance and repair operations for an enterprise's capital assets,
including equipment, inventory and human resources associated with maintaining those assets.
Goals are:
o Greater equipment and facility utilization
o Improved production capacity
o Lower operating cost
 Distributed or consolidated order management
Link customers to all areas of supply chain by focusing on solutions that enable clients to build
new cross-functional, cross-enterprise and multi-channel processes on top of existing
investments in transactional systems. The goal is to enable the visibility and efficient
management of customer and product information across the new extended network.
 Demand management
Design and implement processes and solutions intended to enhance revenue and profitability by
optimizing:
o Sell through
o Inventory
o Product mix
o Product pricing
o Promotional management
 Service lifecycle management
The planning and efficient management of spare parts inventory, including after sales support of
service parts and reverse logistics planning.
 e-Production
By connecting the shop floor to the intra- and inter-enterprise business systems, aims to:
 o Reduce manufacturing costs
o Improve visibility of factory capacity
o Reduce product and consumable inventories
o Tightly link manufacturing output to market demand
 Lean manufacturing assessment and implementation
Focus on manufacturing operations by looking at:
o Schedules
o Product and part flow
o Process
o Pull systems
o Kanbans
 Supply chain event management
We can help your organization build an adaptive, responsive supply chain. Sense-and-respond
capabilities address end-to-end supply chain variability issues by helping you track supply chain
events in realtime with increased visibility. Events can be aligned against key performance
indicators, as well as to identify exceptions. We also provide optimized operational alternatives or
corrections that you can apply across your company's entire supply chain.
 Custom analytics and optimization
Supply chain execution systems can be dynamically reconfigured with realtime data feeding the
decision process and intelligent agents taking action without human intervention. In addition, our
business analyst and operations research capabilities have assisted clients develop unique
solutions for optimizing aspects of their business where "off the shelf" approaches do not apply.



Supply chain planning
 This service area facilitates effective supply chain planning and operational management which
are both key to improving a company’s overall performance, such as reducing inventory costs,
optimizing resources and customer service levels, and ultimately, profit margins.

Service detail
Supply chain planning includes those business processes that plan for and manage supply and demand
across the entire supply chain. This service area facilitates effective supply chain planning and
operational management which are both key to improving a company's overall performance, such as
reducing inventory costs, optimizing resources and customer service levels, and ultimately, profit margins.
 
Highlights
Our offerings are focused on the implementation services around supply chain planning
transformation initiatives.

Our services are centered around the key supply chain management processes:

 Supply planning
 Forecasting and demand management
 Inventory management and materials planning
  Production scheduling

In addition, collaboration and integration between these processes is critical to integrated supply chain
planning.
IBM’s services for supply planning provide a collection of processes and financial modeling techniques
that help companies overcome their business challenges. As a component of the value chain services
framework, the offering identifies the root causes for unreliable supply planning.
Based upon the potential return, we assist our clients in:

 Prioritizing supply chain initiatives

 Assessing critical material and capacity constraints
 Establishing best practices that enable accurate and fast supply commitments
 Developing planning processes across the supply chain (from customers to suppliers)
 Reducing lead times and improving time-to-market for new products

We also offer industry-leading approaches for :

 Aggregation
 Design of master planning stages
 Techniques to embed new product introductions in the sales and operations planning (S&OP)
process

Supply chain strategy

Supply chain strategy focuses on identifying and quantifying supply chain improvements and assisting
clients in transforming their operations, from suppliers to the ultimate customer, to enable real strategic
change and competitive advantage.

Service detail
Supply chain strategy focuses on identifying and quantifying supply chain improvements and assisting
clients in transforming their operations, from suppliers to the ultimate customer, to enable real strategic
change and competitive advantage.
 
Highlights
This service area formulates long term supply chain strategies encompassing infrastructure, assets,
organization, processes and technology.

Our supply chain management offerings include a full range of strategy services, including:

 Value chain assessment and optimization

o Assesses current capabilities against an agreed upon target business model and
structure.
o Optimizes the supply chain business model, including network, financial and tax
consideration.
 Value chain transformation
o Results-oriented transformation focusing on improving customer service, product quality,
cycle time, asset utilization, operational flexibility, and financial performance
improvements.
  Operations performance improvement
o Our suite of offerings enable clients to enhance and stretch operational performance.
 Value chain system integration
o Integrate transactional systems and decision support tools for operational effectiveness
and enablement of strategic decision.

Supply chain visibility

Take control of your global supply chain with IBM's help
Overview
Managing a supply chain is increasingly challenging for Global 2000 companies. Greater uncertainties of
supply and demand, shorter and shorter product and technology lifecycles, increased use of third-party
manufacturing, distribution and logistics partners.

 real-time information visibility to increase transparency and control over your extended global
supply chain
 business-to-business (B2B) collaboration to improve your supply/demand synchronization