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E2open Case Study (IBM)
E2open Case Study (IBM)
E2open Case Study (IBM)
E2open Case Study (IBM)
E2open Case Study (IBM)
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E2open Case Study (IBM)


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Case Study: IBM …

Case Study: IBM

• E2open solutions provide IBM and its multiple tiers of suppliers with a consolidated view of demand and available supply. IBM is able to proactively manage demand-supply execution, inventory, and
replenishment across its global supply chain.

IBM Uses E2open to Support Its On-Demand Business Model

IBM aims to practice what it preaches. The company’s early support of fully automated
processes—such as order management, service requests and OEM manufacturing
work orders—has served to improve customer satisfaction and operational efficiencies.

And over the years the company has remained committed to continuous improvement through the intelligent application of new technologies, becoming a model for a fully automated enterprise using the most advanced supply chain solutions and practices.

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  • 1. IBM’S ON-DEMAND MODEL DRIVES FASTER, LEANER, MORE EFFICIENT SUPPLY CHAIN Case Study: Challenge Solution • Build a supply chain that can sense • E2open solutions provide IBM and IBM and respond to changes in customer its multiple tiers of suppliers with demand and available supply and a consolidated view of demand support IBM’s on-demand business and available supply. IBM is able model to proactively manage demand- supply execution, inventory, and replenishment across its global supply chain IBM Uses E2open to Support Its On-Demand Business Model IBM aims to practice what it preaches. The company’s early support of fully automated processes—such as order management, service requests and OEM manufacturing work orders—has served to improve customer satisfaction and operational efficiencies. And over the years the company has remained committed to continuous improvement through the intelligent application of new technologies, becoming a model for a fully automated enterprise using the most advanced supply chain solutions and practices. Company Profile IBM defines the next level of business process efficiency as an on-demand model: “An • The world’s largest provider of enterprise whose business processes can respond with speed to any customer demand, computer products and services, market opportunity or external threat.” This model requires seamless end-to-end IBM makes mainframes and servers, integration of internal business systems within IBM and extending into the business storage systems and peripherals systems of key partners, suppliers and customers. IBM also realized that a unified on-demand system—one able to sense and respond with speed and accuracy to changes in customer demand—was an essential requirement for creating a faster, leaner and more efficient enterprise. And this system would have to support both demand/supply synchronization and full visibility into complex supply Case Study: IBM
  • 2. chain processes across multiple tiers of suppliers. The rewards were clearly there. Low- touch or no-touch management would mean significantly lower administrative costs, potential reduction in capital expenditures and an improvement in customer satisfaction. The benefits of realizing IBM’s on-demand business model would be to: • Evolve IBM’s supply chain to an on-demand business operation, moving it from an expense to a major competitive advantage • Focus on building value across the extended supply chain • Implement adaptive marketing that quickly responds to change • Improve operations and speed innovation • Create a faster, leaner, more efficient enterprise • Transform both customers and internal supply chains “With the E2open solution, IBM is The Challenge laying the foundation for true end- to-end process integration across With one of the largest and most complex supply chains in the world, IBM spends $41 the entire supply ecosystem. This will billion annually on orders for more than two billion component parts a year, working with move procurement to higher levels 33,000 suppliers and 45,000 business partners. Its supply chain spans lead management, of efficiency through true multi-tier the creation of customer proposals, component sourcing/procurement, manufacturing visibility, thanks to E2open’s any- fulfillment, customer service, billing, accounts receivable and aftermarket services. to-any integration platform, which allows suppliers to connect to IBM “IBM has long focused on creating and building an integrated, end-to-end supply chain,” electronically in the format of their says Kevin O’Connell, IBM’s director of manufacturing and procurement processes. “Now choice.” we wanted to bump it up to new levels of collaboration. To achieve our on-demand goals, we needed to extend integration of business processes across a multi-tiered supply chain Ian Crawford, Vice President, Production and into customer and partner systems as well.” Procurement, IBM O’Connell and his team realized that their in-house supply chain system was not sustainable. Like most legacy systems, it was a hard-coded application resistant to change. Proprietary architecture and point-to-point connections were becoming increasingly expensive to maintain and had limited scalability. Besides, the legacy solution lacked easy connectivity and visibility into current supplier systems—a serious roadblock to extended supply chain management. With their legacy system, IBM relied on suppliers’ and partners’ reports and management systems for visibility into its own supply chain. Sourcing compliance by Electronics Manufacturing Services (EMS) providers for IBM core suppliers was nothing close to real time. Instead, IBM operated in a reactionary mode, relying on EMS self-reporting and supplier end-of-quarter information. After extended analysis, IBM identified specific pain points in two key areas: synchronization of demand/supply and visibility into Tier 2 and 3 suppliers and contract manufacturers. The company needed an industry-standard solution to support IBM global manufacturing sites and divisions, and to provide visibility and control across multiple tiers of suppliers. The system had to be flexible and robust enough to support changing customer demand scenarios with proactive supply/demand planning. The team put together a wish list outlining the characteristics for a new solution that would help them with their goal of ensuring supply while cutting costs and cycle times. IBM set high standards, insisting that the solution must have the ability to send out forecast information, receive supplier commitments, monitor supplier inventory levels, trigger replenishment cycles and ensure continuity of supply. Case Study: IBM Page 2
  • 3. It was a tall order, but achievable, O’Connell and his team decided. And if even a small portion of the wish list could be realized, the effort of transforming their supply chain to support an on-demand model would pay off enormously. The Solution IBM turned to E2open to provide two production-proven solutions: • E2open Demand/Supply Synchronization Solution • E2open Multi-tier Visibility Solution These components directly support IBM’s primary business requirements: gaining visibility and control of critical demand/supply chain processes across global manufacturing facilities, replenishment service centers and multiple tiers of suppliers. Working seamlessly together, the E2open solutions provide IBM and suppliers with a consolidated view of customer demand, available supply and any imbalances—representing 85 percent of IBM’s manufacturing procurement expenditures. In addition, the E2open Demand/Supply Synchronization Solution allows IBM to proactively manage demand/supply execution, inventory and replenishment across IBM’s global supply chain—including 37 global manufacturing facilities, 10 replenishment (VMI) service centers and Tier 1 suppliers and contract manufacturers. Key benefits include the ability to: • Quickly sense demand and supply imbalances, provide timely alerts on potential shortages and automatically trigger replenishment cycles • Align forecasts with procurement activities while reducing excess inventory and liabilities IBM’s initial deployment focused on providing multi-tier inventory and supply planning information. This data provides a more accurate view of supply positions and allowed IBM to provide improved planning information to suppliers. Over time, the solution became even more powerful as IBM and its suppliers added to a knowledge base of information aggregated by the E2open Multi-tier Visibility application. This solution ensured that every supplier tier had the business data they needed to make effective supply chain decisions. E2open Demand/Supply Synchronization Solution The E2open Demand/Supply Synchronization Solution helps IBM sense and respond to demand and supply changes—including forecast/commit cycles—quickly flagging demand/supply imbalances and potential shortages. It supports traditional forecast and commit processes and multi-pass planning processes. Collectively, these capabilities ensure IBM’s goal of building a comprehensive supply chain that responds to demand and supply changes rapidly and accurately. Powerful exception management and decision support capabilities allow all tiers of IBM’s supply chain to track actual execution against forecasts, demand and inventory positions. And the solution automatically calculates inventory levels and tracks inventory compliance and target levels. As a result, IBM can respond quickly and decisively to any changes in demand. The solution ensures supply, cuts costs by eliminating excess or obsolete inventory, reduces liabilities, slashes cycle time and increases flexibility within the IBM supply chain. Case Study: IBM Page 3
  • 4. E2open Multi-tier Visibility Solution The E2open Multi-tier Visibility Solution provides Tier 1, 2 and 3 suppliers with consolidated visibility into forecasts, commits, aggregate order quantities and inventory positions— so each tier of the supply chain can track execution and respond quickly to alerts on imbalances, errors and shortages. The scope and depth of this visibility is critical to high levels of supply assurance. To ensure access to business-critical information, multiple partner integration options, using an any-to-any integration platform, transfer content between IBM and its partners using partner-preferred data formats. Rapid Configuration and Deployment, Ongoing Support and Management E2open solutions make it easy for IBM and multiple tiers of suppliers seeking to participate in IBM’s dynamic business ecosystem to get up and running quickly with minimum up- front investment. E2open provides all the software, deployment and operations services needed to implement, manage and support these applications. This complete solution can reduce the time needed to integrate a supplier in a server-toserver mode from three months or more to as little as 10 to 15 days. To implement its solutions, E2open leverages a program management methodology designed specifically for this kind of inter-company program and tools for the successful delivery of the solution. “On-boarding” services ensure rapid provisioning, installation, configuration and testing of the E2open solution for contract manufacturing, suppliers and other trading partners. These services include partner-readiness evaluations, user workshops, training, B2B technical specifications and integration with back-end systems and existing EAI/B2B infrastructure. And the E2open solution allows suppliers to avoid much of the hardware, software, operations, services and hosting costs associated with a typical integration project. This cost savings motivates IBM’s suppliers to actively support the company’s new business process initiatives. Results The solution currently extends across 37 manufacturing facilities and 10 replenishment (VMI) service centers, representing more than 85 percent of annual manufacturing procurement expenditures. It provides both IBM and Tiers 1, 2 and 3 suppliers a consolidated view of demand and available supply. With the E2open Demand/Supply Synchronization Solution, IBM is able to proactively manage demand/supply execution, inventory and replenishment across its global supply chain. IBM is poised to incrementally scale the solution as more supply chain partners come on board through acquisitions and expansions. The company experienced a very fast time to value with rapid integration and deployment across global sites and tiers of suppliers, lowered total cost of ownership, streamlined operations, and increased responsiveness and flexibility within their supply chain. The solutions help IBM in its quest to build a highly responsive supply chain that can meet changes in customer demand rapidly and efficiently. Specific improvements achieved: • Reduced supply/demand planning time from 45+ days to 10 days • Increased pull replenishment levels to 85 percent • Improved outbound on-time delivery rates to 90 to 95 percent • Improved inventory turns more than 42 percent • Achieved time to benefit of less than nine months Case Study: IBM Page 4
  • 5. About IBM IBM is the world’s largest information technology company, with 80 years of leadership in helping businesses innovate and leverage new technologies. Drawing on resources across IBM and key business partners, the company offers a wide range of services, solutions and technologies that enable customers of all sizes to take full advantage of the new era of e-business. Among the leaders in almost every market in which it competes, IBM makes mainframes and servers, storage systems and peripherals. IBM’s service arm is the largest in the world, and the company is the second-largest provider of software as well as one of the largest semiconductor providers. The company continues to use acquisitions to augment its software and service businesses, while streamlining its hardware operations with divestitures and organizational shifts. About E2open E2open is the leading provider of software and services to manage inter-company processes such as inventory management, order management, demand/supply forecast synchronization, outsourced manufacturing visibility and multi-tier visibility—integrating trading partners across multiple tiers of distributed global supply and demand networks. For more information, call 1.650.645.6500 or visit Offices Published: E2open U.S.A. E2open Europe E2open Malaysia © 2009 E2open, Inc. E2open and the E2open logo are Corporate Headquarters Reading, UK Kuala Lumpur, Malaysia registered trademarks of E2open, Inc. Customer legal Foster City, CA E2open Taiwan disclaimer goes here. All other marks are trademarks, service marks or registered trademarks of their respective Dallas, TX Taipei, Taiwan owners. All rights reserved. Austin, TX IBM001N Case Study: IBM Page 5