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 achi eve quick responsiveness to customers with minimal inventory. To support th is 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, a nd enterprise database connectivity into a system that allows quantitative analysis of extended supply chains. IBM has used AMT to study such issues a s 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.