An internal analysis carried out by IBM across 400 supply chain executives across 25 countries reveals that IBM faces 5 strategic challenges. These 5 challenges are listed in order of importance to the executives;
ïƒ˜ Supply Chain Visibility-Visibility both inside and outside the supply chain is key. This visibility include customers, transportation and logistics providers, suppliers,(considered inside) and financial institutions and Governments (considered outside).IBM executives were able to project lack of ability to make sense out of information despite available integrated operating systems like Enterprise Resource Planning (ERP)Systems, real-time data capture to mention a few. The executives saw there was lack of collaboration between suppliers, manufacturers, logistic providers as a result of organizational bottlenecks and the customer is always last in the list of preference
ïƒ˜ Risk Management-Risk of disruption and interruptions manifested around the supply chain. This risk was outside financial control and financial risk. Process, data, & technology are identified as the roadblocks to good risk management, yet they are the key enablers.
ïƒ˜ Customer Intimacy- IBM executives identified that they are failing to talk with customers as a result not including them or seeking their opinion in product design, risk mitigation strategy, and the demand driven policies to help them maneuver demand and supply. The executives realized customer interaction is vital to the success of IBMs supply chain in the form of demands for the right products. IMB customer's collaboration rate presently stands at 68%.
ïƒ˜ Cost Contamination-increment in fuel prices around the world has its effects visible in the supply chain of most companies globally. Recent is also the financial crises. This cost contamination is of paramount interest to the IBM supply chain executives because it is difficult to manage and anticipate these cost effects.
ïƒ˜ Globalisation- Results have shown by IBM's supply chain analyst that due to growth markets, one third of its supply chains experience an increase in operational cost, inconsistencies, longer lead days for deliveries as a result of sourcing materials globally and also as a result of the delivery structures used.
Sustainability and green supply chain programs
IBMs executives revealed their compliance to green supply chains in the following table below
Sustainability practices differ by region. Supplier selection based upon compliance is more prevalent in Asia Pacific. Sustainability practices in Europe focuses on carbon reduction in manufacturing & transportation. North America has lower sustainability practices around low carbon distribution network design and supplier selection is based on carbon capabilities