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York University
Administrative Studies
ADMS 2610
Rebecca Jubis

1.Executive Summary With today’s fast paced world, many individuals are looking for the fastest, most efficient product to streamline their business into becoming the best in their respective industry. In order for businesses to be competitive, there needs to be a company who can provide them with the necessary tools to accommodate those business needs. In this business world, there is a company named IBM. IBM creates solutions for its most complex customers by providing computer systems to run applications, and also utilizes a statistics program called SAP to create a complete solution to the customer. Real-time information on applications was part of the IBM’s mission, and they did not disappoint. Since they found it important to expand internationally, IBM was one of the first to expand globally. When organizations needed help expanding, IBM was there to accommodate. In order to accommodate those needs to organizations, IBM’s supply chain is very extensive. From the many different computer manufacturers, software developers, and vendor’s out there, IBM carefully selects the most efficient supply chain, to deliver the product in a quality way. IBM officially became a corporation in 1924. Their business focus was to be at the forefront of technology, and it continues to be the same today. Throughout the century, IBM had their setbacks, but they also had their triumphs. From their successes, they now share a significant share of the information technology market, just behind the software giant Microsoft. In order for IBM, and any major successful organization to compete in the market these days, a team focused on the success of e-commerce is vital. IBM participates in many aspects of e-commerce including Business to Business, Globalization, Customer Relationship Management, and Supplier Relationship management. By providing their customers with the ability to shop, research, and purchase without physically being in a warehouse or store, they open the possibility of sales nearly everywhere in the world where that customer has an internet connection. In conclusion, IBM is a very strong company whose success is closely related to its supply chain management and it e-commerce strategy. They possess strong positioning for many companies looking to start their business, or even expand existing operations domestically and also internationally. This report will continue to outline in greater detail the strengths of IBM with relation to their supply chain management and e- strategy. With the details of this report, readers will understand how IBM has maintained its place as a leader on the technology forefront and managed to survive the many trials and tribulations brought on by history. 2.1 Quality/Value of Analysis The primary focus of supply chain management at IBM is to ease the distribution of goods/services to the consumers. IBM thrives at developing many streategies to make sure the process becomes easier.IBM's goal was to revolutionize the supply chain process. Some of the ways IBM tries to simplify supply chain management is by cross channel optimization which reduces the channel of distribution. IBM’s supply chain is comprised of many units i.e. contracts, developing parts and shipping them via different methods (air, ship, land). IBM’s supply chain had functional departments as well – operations, strategy and talent development. This helped by making faster and accurate decisions. IBM created the integrated supply chain to create efficiency, provide exceptional service to their clients and improve customer satisfaction. They utilized to the raw materials to produce a good and deliver the good in a given time to the client. This whole process was done with superb efficiency. IBM did not only focus on supply chain management and its aspects, but it also enhanced the process and understands the inefficiencies and improves upon them. IBM is an organization with a very extensive supply chain. From their laptops, to their servers, their components, which make up those systems, are obviously supplied by different manufacturers. These suppliers then use a shipping company to send the products to IBM. The suppliers and shippers are just a few of the areas or links of the chain. These two small, but important links are vital to the operation and delivery of the final product. IBM created solutions to the most complex issues. They designed computers to handle complex tasks. The SAP software, also well know to be a statistics program, helped IBM design the perfect business machine. Real time information and accountability was available with their software. One of IBM’s core competencies is that their product is widely available in a disciplined manner. Price and variety were always controlled and hence their supply chain management was so efficient. Since statistics played a large part in the development of businesses, IBM used the software to their advantage to help business forecast sales. Customers of IBM were able to access real time data with unto the minute information on shipments and consignments. IBM also helped companies by making faster and accurate decisions due to real time data. Companies were able to access important information about products and suppliers. Since IBM’s procurement was a key to the distributors success, they helped companies receive goods and services on timely providing the unto date information. Companies started diversifying into different countries and IBM became the solution to their issues. Companies who expanded internationally were able to track and record data at the same pace of local data. The delivery of information was accurate and IBM thrived. Part of the Supply Chain is the company’s core and support processes. A few examples of core processes would be its manufacturing and order fulfillment processes. These chains would be responsible putting the systems together, and then preparing and finalizing the order for the customer. Some examples of support processes would be its accounting department, and its technical support division. Both of these support processes are essential to the operations of the company, as employees need to be paid, expenses need to be accounted and budgeted for, and consumers always have problems with their machines. IBM tries to maximize production, cut costs and process efficicently. Their major goal is to be a green certified company where all procceses are done under an environmentally friendly manner. One of IBM's major strategy was to conquer over the ecommerce world to market their computers and services. IBM's core competancy was their prices and their exceptional service. However, due to the competion in the techonolgoical world, IBM had to strategize their company. IBM solely belelives on delivering quality goods that help a company succeed. 2.1.1 Historical background on the industry On June 16, 1911, the Computing Tabulating Recording Company was created from a merge of three other companies from the 19 century. CTR was the first chapter of the IBM history book. In the year 1924, CTR formally changed its name to International Business Machines Corporation or IBM. Since then, IBM has prided itself on thinking of the future and promoting innovative strategies and products. Throughout the mid-1900’s, IBM continued its push of manufacturing superiority. They also provided a fresh perspective on corporate philanthropy by focusing on providing minorities with better opportunities in a time when it was considered absurd to do so. In the 1960’s, IBM became a business icon by developing the System/360 family of mainframe computers. It was such a revolutionary piece of technology that IBM saw more than a quadruple increase in sales over the decade. However, even with this level of success IBM still had a bumpy road ahead of them. After a rough patch in the 1990s, IBM managed a significant turnaround and saw a new hope in the distance by reshaping the organizational culture for flexibility, teamwork, and responsiveness. To this day, IBM stands as a global leader in technology and business. IBM competes in a large and competitive industry, which has evolved from domestic to global competition. The industry is expected to be over $500 billion of which IBM holds a strong share just behind Microsoft. Some of IBM’s direct competitors are Accenture, HP, and Microsoft; others include Cisco, Apple, Toshiba, Dell and more. To remain ahead of the others in the industry IBM consistently invests more than any other IT firm in enterprise innovation Industry prior to the advent of e-commerce & how e-commerce has changed the industry. In the past few decades there have been revolutionary changes in technology, which will continue at a rapid pace. According to Moore’s law the processing power of microchips doubles every 18 months. Although these changes come with significant opportunities they also come with problems such as privacy laws, intellectual rights, access to information and more. One of the main advancements in information technology is the way business is conducted. The major players in the industry are primarily IBM, Microsoft, Accenture, Hewlett Packard and Diversified Computer Systems. E-commerce has allowed businesses to do business over the Internet. Everything from digital products to hardware can be purchased online, along with online customer service and integrated supply chain between businesses. Prior to e-commerce companies had to do business in person, by contacting potential customers or waiting for customers to contact them. Mass advertising was necessary to develop brand image and educate consumers of new products, which was inefficient and costly. Many of these companies’ products were only sold in person or by mail, which took time to process and transfer to end-users. The emergence of e- commerce significantly changed the way businesses conducted work in the industry. One of the biggest changes in this industry is the transfer of manufacturing processes to countries outside of North America. Microsoft along with other companies embraced this idea of outsourcing manufacturing; all of its Xbox and Zune products are manufactured outside the United States. Another significant change has been the move to digital software, prior to e- commerce all software products were packaged in CD’s and sold to customers, today customers can purchase software online and download it immediately. In addition to immediate access, e-commerce has also removed many intermediaries by doing business directly with end consumers. This allows for reduced costs in production and distribution chains. E-commerce has also resulted in global competition and global operation. Globally, IBM employs thousands of project managers, SAP consultants, Web-sphere consultants and more. This has allowed companies like IBM to accept projects in local markets, such as building storefronts, portals, managing servers and outsourcing the work to other countries in order to take advantage of cheap labor. The new way of doing business has allowed companies to do business 24-7 and take advantage of time differences. E-commerce has allowed for significant cost reduction through the reduction in the need for physical store establishments. Physical stores require placement and execution, customer support, inventory and distribution, which are very expensive especially for these industry players. Transforming to an online store reduces the need for physical establishments and products and services can be accessed by millions of people around the world. Moreover, online stores reduce inventory costs by eliminating the need to stock up each individual store location. Lastly, e-commerce has reduced advertising costs in the industry. These companies can directly advertise via websites or through email, which reduces the need for mass advertising and mail advertising. E-commerce has a great deal of advantages mainly reduced costs, personalized customer service, and enhanced ability to exploit global markets. However the costs to set up and maintain storefronts along with secure service may be significantly high. Despite the restrictions e-commerce has many benefits and has changed the way business is done forever. Analysis of industry in current and possible future state As defined in the text, E-commerce a Managerial Perspective, supply chain management is a complex process that requires coordination of many activities so that the shipment of foods and services from supplier to customer is done efficiently. Some of the benefits of supply chain management are its focus on minimizing inventory, increasing production, reducing manufacturing time, optimizing logistics, distributon and order fullfillment while emphasizing on cost reduction. Many companies including IBM emphasize on the importance of efficient and effective supply chain capabilities in order to sucessfully compete with rivals and take advantage of lower costs. Sanjeev Nagrath, IBM's global supply chain leader states, ''Supply chain is no longer viewed as a backroom operation, but are a critical boardroom issue with direct links to financial results.'' This clearly indicates that IBM like many other companies in its industry,values its supply chain capabilities. An important point to note, is that the current industry is moving towards a global economy, one that is more complex,diverse and interdependant. These changes enhance the probability of risksin emerging markets which require efficient supply chain implementations. Some of the business challenges the current industry is facing and will continue to face in the near future are, increased globlization as a result of increased focus on doing business around the globe. Globalization has also resulted in additional regulatory compliance enforced by different governments which complicates international trade. Moreover, there is heightened economic uncertainty as companies compete in the global market, which also creates uncertainty in supply and demand. As well, shorter product cycles and rapid changes in technology also increases inventory obsolescence. Natural disasters will alsoaffect global supply chain around the world. Nevertheless, the movement towards an e-commerce form of business has also resulted in the need for effective and timely delivery of products and services to customers. As indicated in the analysis the global shift in business signifies that it is more cruical than ever that companies have
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