By Dan Carrell, Director, Global Manufacturing and Integration Services, IBM Integrated Supply Chain
Over the past year, IBM has learned a lot about what it takes to build a smarter planet. By “smarter”, we mean that intelligence is being infused into the way the world literally works — into the systems, processes and infrastructure that enable physical goods to be developed, manufactured, bought and sold... that allow services to be delivered... that facilitate the movement of everything from money and oil to water and electrons..., and that help billions of people work and live.
A mandate for change is a mandate for smart as we’ve learned that intelligence, not intuition, drives innovation. Importantly, we’ve learned that our companies, our cities and our world are complex systems that require new things of us as leaders, as workers and as citizens. Forward-thinking business leaders, policymakers and government officials around the world understand these challenges, and are stepping up to them. Smarter systems are being implemented and creating value in every major industry, across every region, in both the developed and developing worlds. These systems are interconnected, instrumented and intelligent, and aim to deliver sustainable results.
Suppliers play an integral role in moving the supply chain system forward toward sustainable operational excellence. At the root of these systems, businesses are defining cost, efficiency and sustainability measurements and goals for their procurement activities.
Successful supply chain performance is based on cooperation and mutual decision-making between buyers and suppliers alike. A smarter planet will require a profound shift in management and governance toward far more collaborative approaches: new responsibilities, new skills and fields of expertise, and new ways of working and thinking.
Global collaboration defines IBM’s supply chain vision.For example, to systemize environmental management and sustainability across our global supply chain, IBM now requires its suppliers to install corporate responsibility and environmental management systems to gather data on their energy use, greenhouse gas emissions and waste and recycling, measure performance and publish results.This will help suppliers build their own capacity in a way that’s not only good for the environment, but their own businesses as well.
To sustain a competitive advantage, companies need to redefine their fundamental supplier relationship model and develop a proactive plan to reach interdependence with key suppliers. This will require a new level of supplier relationships that will be differentiated by the commitment to a true “win-win” relationship between both the buyer and its suppliers. Underlying this will be the continued drive towards collaborative and integrated processes, systems and IT infrastructures, and unique governance structures with these suppliers.
By seamlessly integrating suppliers with the needs of a corporation’s individual business units, procurement organizations can help mold and influence product strategies, solution development, and life-cycle management. These can be key competitive differentiators. Overall, smarter partnerships with suppliers lead to strengthened strategic alliances and improved customer satisfaction.