IBM to boost performance of its manufacturing supply chain using E2open software.

IBM has announced it will work with E2open, a market leader in inter-company process integration, to improve the way it works with its top manufacturing suppliers. As part of its ongoing supply chain transformation initiative, IBM will use E2open's Multi-Company Process Management application software to manage its supply and demand collaboration processes with these suppliers, which together represent more than 85 percent of IBM's annual manufacturing procurement expenditures.

Starting this year, IBM will use E2open to support its demand/supply planning and execution capabilities. Using E2open, IBM will have greater visibility into its suppliers' inventory and supply operations, allowing the company to quickly respond to changes in customer demand by aligning forecasts with procurement activities, monitor suppliers' inventory levels, proactively evaluate exceptions and automatically trigger replenishment cycles. E2open's software will also help IBM minimize supply disruptions and reduce excess inventory flowing through its supply chain. As a result, IBM expects to reap operational efficiencies within its supply chain.

With one of the largest and most complex supply chains in the world, IBM relies on a number of key suppliers to meet its needs in manufacturing, fulfillment and supply chain logistics. The company orders more than two billion component parts a year.

With the real-time information capabilities that E2open will provide to IBM's demand/supply process, IBM will be able to better align customer demand with its own procurement needs. This will enable more informed and timely decision making across its supply chain and will lead to better customer service and greater supply chain efficiency.

The software is built on a WebSphere and DB2 platform using open B2B standards. E2open has certified WebSphere Business Integration Connect as a connectivity option for suppliers seeking a secure way of integrating their current systems with the IBM supply chain.

"To make the transition to e-business on demand, companies like IBM need to make their supply chains much more flexible and responsive. "As the use of solutions like E2open's becomes more widespread, IBM and other hardware manufacturers will be laying the foundation for true end-to-end process integration across the entire supply chain ecosystem," said Ian Crawford, vice president, production procurement, IBM.

IBM's supply chain has been an area of intense focus, and the company is committed to turning its supply chain into a tool for enhancing customer satisfaction, and in turn, fostering growth in market share and revenue.

Today, IBM's supply chain begins with product design and includes processes for lead management, the creation of customer proposals, component sourcing, procurement, manufacturing, fulfillment, customer service, billing, accounts receivable and aftermarket services. In 2003, improvements in supply-chain management reduced IBM's cost and expense by more than $7 billion.