Managing Automation - September 2007 - (Page 36)

ESSIVE MANUF PROGR IGH ACHIEVERACTURING H 2007 BUSINESS MODEL MASTERY Faced with a global structure that was anything but integrated, IBM chose to overhaul its thinking and drive out inefficiencies on a grand scale. BY CHRIS CHIAPPINELLI IBM company facts epending on who’s counting, the planet is home to approximately 194 countries. IBM, the die-hard blue chip and a leader in computer hardware, software, and services, maintains operations in more than 170 of them. Any way you slice it, Big Blue covers a lot of ground. But not long ago, company leaders decided to cover it a different way. During the last century, IBM concentrated on branching out into local markets around the world, hiring native workers and leveraging their talent to stake IBM’s position in each country. The business model worked — so well, in fact, that by the turn of this century, IBM was logging nearly $90 billion in annual revenue. In essence, the company had established mini-IBMs in many locations worldwide, each IBM with autonomous departments for support TOTAL REVENUE/EMPLOYEES: $91.4 billion /355,766 employees functions, such as sales, procurement, finance, LOCATION: Armonk, NY and human resources. INDUSTRY: IT hardware, software, and services Upon closer inspecCEO: Samuel Palmisano tion, leaders realized PROJECT LEADER: Palmisano and employees the structure held exPROJECT NAME: Transforming to a Globally Integrated cess weight. “What Enterprise once looked like effiSUPPORTING TECHNOLOGIES USED IN ciency is coming to PROJECT: Supply chain software from SAP, Siebel, i2, look like redundancy,” WebSphere, Lotus said Chairman and ROI/BUSINESS BENEFIT: Long term; IBM’s goals: revCEO Samuel Palmisano enue growth of 5% to 7%; double-digit earnings-per-share in a speech last fall. growth; continual improvement in margins While the company had lived up to its moniker, International Business Machines, two of those terms were out of date: The company offered more than just machines, and it aimed to be global, not simply international. The answer for IBM was to create a globally integrated company to supplant the “miniIBMs” it had created in so many geographies. For instance, one global procurement department took the place of numerous countrybased procurement organizations. For its efforts, IBM earned High Achiever status in the Business Model Mastery categor y of Managing Automation’s 2007 Progressive Manufacturing awards competition. Maureen Steinwall, CEO of injection molder Steinwall Inc. and a judge for this year’s awards, calls IBM’s plan to remodel its worldwide operations “brilliantly simple.” And yet, the simplest of plans sometimes can be the most difficult to implement, she notes. “IBM is living its vision of globalization through its actions. Leadership takes courage, and this award acknowledges the strength of commitment IBM has modeled.” Technology played a supporting role in IBM’s efforts, says Tim Carroll, vice president of IBM’s supply chain operations. Integrating business functions on a global basis, especially those that support more than 300,000 employees, presents a significant challenge, but it was one well-suited to IBM, which has grown into a worldwide leader in integration services. Even so, the company’s IT philosophy needed adjustment. The planners in one of the world’s leading-edge technology companies, Carroll admits, had typically followed the thinking: “Lead with IT, and then make the processes fit the IT capabilities.” That changed as the concept of a globally integrated IBM took shape. In the supply ma September 36 2007

Table of Contents Feed for the Digital Edition of Managing Automation - September 2007

Contents Take 1 Europe’s Automation Chiefs Upbeat on ’08 Business Prospects Vendor Coalition Pushes Human Element of SOA Wireless: Users Still Approaching with Caution One Year Later, IBM Shows Plan for MRO’s Maximo Study: More Work Needed to Lure Next-Gen Talent Executive Q&A Notes Cover Story: 2008 Companies to Watch Special Report: The 2007 Progressive Manufacturing High Achievers Progressive Manufacturer of the Year Business Model Mastery Innovation Mastery Customer Mastery Supply Network Mastery Data & Integration Mastery Education & Training Mastery Operational Excellence Mastery Leadership Mastery Transformation: Orchestrating the Multi-Tier Supply Network Integration: The Timeless Quest for Accurate Data Industries: Maintenance No Longer on Schedule Product Scan Advertiser Index Next

Managing Automation - September 2007

For optimal viewing of this digital publication, please enable JavaScript and then refresh the page. If you would like to try to load the digital publication without using Flash Player detection, please click here.