Extended-enterprise supply-chain management at IBM personal systems group and other divisions

In 1994, IBM began to reengineer its global supply chain. It wanted to achieve quick responsiveness to customers with minimal inventory. To support this effort, we developed an extended-enterprise supply-chain analysis tool, the Asset Management Tool (AMT). AMT integrates graphical process modeling, analytical performance optimization, simulation, activity-based costing, and enterprise database connectivity into a system that allows quantitative analysis of extended supply chains. IBM has used AMT to study such issues as inventory budgets, turnover objectives, customer-service targets, and new-product introductions. We have implemented it at a number of IBM business units and their channel partners. AMT benefits include over $750 million in material costs and price-protection expenses saved in 1998.