June 27, 2005

Bill Ciemny, VP of IBM's B2B unit, announches that the company has launched a new business unit. "We're calling it the B2B supply chain business transformation outsourcing offering," he said.

"We're drawing from the knowledge and expertise of the people who helped the IBM supply chain story as well as our B2B consulting arm." All told, that means the unit can draw upon the expertise of 15,000 IBM employees.

IBM's supply chain transformation service is beginning with two entry points in particular, logistics and direct procurement. On the logistics front, Ciemny says, IBM has walked the talk; Big Blue itself went from a 100 percent fixed cost structure eight or nine years ago to a 90 percent variable model today, resulting in significant savings and gains in efficiency.

As part of this journey, IBM learned how to plug all of its third-party logistics (3PL) providers into a single dashboard that can track and trace shipments all over the world. IBM will be offering this product as part of the offering.

In direct procurement, IBM will be leveraging its Chinese procurement center, offering clients an entry into low-cost country sourcing built on "several years of experience in understanding the local Chinese marketplace," according to Ciemny.

Supply chain is an existing part of IBM's services offering, but the company saw the need to break it out into a new unit thanks in part to the tremendous opportunity. IBM's internal figures show the supply chain transformation market as being a $23.5 billion market expected to grow from 10 to 15 percent per year.

Source: Line 56