Supply Chain Management in IBM

This assignment delves into the critical role of supply chain management within IBM's business model. It explores various aspects, including inventory management strategies like predictive analytics, the impact of supply chain practices on firm performance, and the evolution of logistics and supply chains in the technology industry. The analysis draws upon academic literature, industry reports, and case studies to provide a comprehensive understanding of how IBM leverages its supply chain for competitive advantage.

RUNNING HEAD: LOGISTIC MANAGEMENT 1
Logistic management
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Logistic Management 2
Logistic Management
Introduction
Logistic management is part of the business operation in an organization. It is defined as
the component of supply chain management that comprises the process of planning,
implementing and controlling the efficient, effective forwarding as well as the reversal flow and
the storage of goods and services and the related information between the point of origin to the
point of consumption.
The supply chain management is important constituent and part of management, it
involves the process of optimizing and harmonizing the organizational operation, this is the
purpose of maximizing speed and efficiency. Increasing the speed-flow of products and services
may result in high cost of operations, maximizing the efficiency is important to the company
since it standardizes the general operations and production process of the company (Christopher,
2016).
International Business Machines (IBM) is a multinational Information communication
consulting and computer technology company headquartered in Armonk, New York. The
corporation is one of the Information Technology Company with and history that is dated back to
the 19th century. The company is nicknamed to be “Big Blue”. IBM company manufactures and
sells computer software and hardware as well as offering infrastructure, consulting and hosting
services. The company is known to be the largest computer corporation systems integrators, in
2014 the company has employed more than 400,000 employees.
Interfaces between production, marketing, and accounting
IBM Company is a corporation that is known for excellent information technology and
computer services. The success of the company is associated with the strong mission and vision

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statements, the statement allows the corporation to create the future desire of the competitive
business directions (Ballou, 2007). However, both the vision and mission mark the importance of
the company leadership, especially in the information technology industry.
Production process of IBM Company
Production is a fundamental stage of a manufacturing company, it involves the process of
transforming the raw material to the manufactured goods. IBM Company is a manufacturing
business organization that has strategic measures of transforming their raw materials into
manufactured products (Gandhi & Sheorey, 2017). The company also is known to offer
consulting ICT services, these services is serviced to the customers after the intervention process
of the ideas created by the employees and other stakeholders. Manufacturing and production
process at IBM Company are the essential elements of logistics management. The manufacturing
process at IBM is concluded after the materials are passed through different stages, they
materials passed through the development stage, integration, staging to delivery. The delivery
stage in the company acts as the foundation (Lee & Nahmias, 2009).
Delivery stage in the production process at the IBM Company certifies the beginning of
the logistics management process of the company. After the product have been tested and
confirmed to be promoted to the market, the company applies the logistic knowledge of
transporting good to the consumers (Gandhi & Sheorey, 2017). The IBM production department
accelerates their products to the marketing department, the marketing department is responsible
for determining and implementing the logistics strategy for the products released.
Marketing
After the production process at the IBM Company, the production department interfaces
their activities with the marketing department where the department is responsible planning on

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the supply chain process that will aid in product promotion (Stevenson & Hojati, 2007). Supply
chain management and marketing are the vital elements of organizational management.
Marketing is the management process that involves the process of promoting goods to the
consumers, while supply chain management comprises the flow of goods and services from their
point of origin to consumption (Grant, Wong, & Trautrims, 2017). Both theoretical concepts of
management confirm the maximization and harmonization to increase the speed and efficiency
of goods and services.
IBM Company is involved in providing information communication technology and
manufacturing of computer products and software. The company uses the technology to market
and supply their products and services. As the consumer demands are changing, the IBM
marketing department is devoted to ensuring that they monitor and mitigate increasing disruption
and risk while they striving to establish new business markets and networks. The logistics
management planning begins with the supplier that is IBM Company, it also takes into
consideration the general logistical chain process from the intervention of material to the
consumption stage (van Helden & Alsem, 2016). All the complete material to be used used in
production and the flow information are planned by the logistic level of the organization.
Marketing department takes into account the aspect such as intra-company transportation,
packaging, and shipping process (Oates, Alevizou, & McDonald, 2016).
Accounting
Accounting is also part of the management process of an organization. IBM Company is
one of the corporations that has gained its success through effective, and decisive accounting
procedures. It is defined as the systemic process of recognizing, determining, recording,
classifying, validating, summarizing, interpreting as well as communicating the financial

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information of an organization (van Helden & Alsem, 2016). The logistics management and
accounting at IBM Company acts as the theoretical conceptions that fundamental in realizing the
strategic goals and objectives (Xia & Cheng, 2017). Logistic Management inclines the flow of
materials until the consumption of the products released. The sales made from selling the
products to the market are recorded monitored by the marketing department and all the sales
information are given to accounting and finance department.
Order cycle
Order cycle is the process that the order line development and the cycle actions are
conducted and completed. This typical theoretical concept of logistic management takes into
account the process of making an inquiry, placing and requesting an order, making payment and
supplying products requested by the consumers. (Stevenson & Hojati, 2007).
The IBM Company used a typical process of order cycle, where the process starts from
the stage when the customer is inquiring and placing an order to the company and requesting the
supply of specific products. After the placing of an order, the payment accounts such as credit
are approved by the company in agreement with the customer (Lee & Nahmias, 2009). The
logistics process and operation are conducted by the manufacturer, the order is picked and
packed. After the order is picked, the transit process is commenced and the goods are delivered
and the invoice is released after which payment is made by the relevant customer (Sindi & Roe,
2017).
The IBM order management provides the order arrangement of logistic planning through
supply chain management. These vital processes are organized through, centralize inventory
systems, order promising and the fulfillment of the promises made by the company to deliver
products and services (Laumanns & Woerner, 2017). The order cycle in an organization help to

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improve customer loyalty, increases fill rates and inventory turns and it reduces the discounts.
The IBM order cycle allows customers to make a better decision about products they need.
Therefore, the order cycle also improves profitability making as it enhances customer
satisfaction (Lambert & Cooper, 2000). The logistics and supply chain management allows the
management to determine the efficient and effective steps and areas of order cycle that could be
used to address the growing demands from the market.
The effectiveness and efficiency of order cycle have allowed the IBM Company to gain
its competitive advantage in the market since it is relevant in addressing the customer demands
in the market. Centralize inventory system has kept the IBM Company to be on the move of
achieving its strategic goals and objectives. The centralized inventory system that is adopted by
the IBM Company has allowed the customers to get deliveries on the dates they were promised
(Grant, Wong, & Trautrims, 2017).
The essence of the order cycle of IBM Company is measured by the fact that, the
company is offering a customize order execution to the customer. The order cycle process used
by the company is flexible and adaptable, this has allowed the customers to order products nearly
using any channels and that they can take their deliveries anywhere (Kostenko, 2015).

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Recommendation
Since the order cycle of IBM Company is considered to be effective and efficient, the
management is recommended to apply the Economic Order Quantity model (Battini, Persona, &
Sgarbossa, 2014). The EOQ is an important model that seeks to minimize storage and holding
cost, the company is advocated to allow customers to buy products in large quantity and offer
them the discounts based on the products the purchase. The EOQ reduces the holding cost since
it allows the customers to order for few products, this intends to minimize the holding cost
charged from the delivery warehouses (Brooks, 2015).
Challenges faced by IBM products
Competition in the market is the critical factor that as affected the flow of the IBM
products in the market. competition has encourage technological innovation, new companies in
the market tend to manufacture products that have new attractive features.
Innovation is currently becoming the source of customer real value. The company is
recommended to conduct a market research, this will aid in learning about the market demand,
this will ensure that the company competitive advantage is improved and maintained (Royce,
2012).
Inventory management

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Inventory management is an essential element of supply chain and logistics management.
The purpose of the inventory management is to supervise the flow of goods from the
manufactures to the warehouse, and from the warehouse to the point of sales. The inventory
management is to keep comprehensive record of new products as they enter into the warehouse
until the time they are transported to the sale point (IBM, 2015).
The purpose of inventory management process at the IBM Company is to manage the
physical as well as the virtual assets for the peak profitability making, the process also seeks to
reduce the working capital for the accumulated requirements. The IBM Company management
uses the inventory management to identify and scrutinize the right inventory to be supplied to
the market (Hou, Sohail, Yong, & Ming). However, Inventory Management approach is directed
by the company to determine the optimal purchase levels that support production facilities as
they predict the product customer demand with regard to the inventory and production process.
Predictive Inventory analysis
Logistics management and inventory management are the business model that determines
the success of a business organization. IBM Company is a multinational company that has kept
its move of meeting its strategic goals and objectives by incorporating both logistic and
inventory management approached (Ballou, 2007). The company is able to monitor the flow of
materials to the time they are processed, transported to the warehouse to the point of sales. IBM
Company is considered to have effective and efficient inventory management process that is
linked to the company vision and mission. The company is able to predict on the customer
demand in the market, the change in consumer demands in the market is due to competitive
technological industry in the world business environment. After the prediction of the market
demand, the company immediately implement on the supply chain process, where the

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manufactured products are supplied to the market (Christopher, 2016). Inventory management
ensures that all the stock levels are optimized for all the stakeholders alongside the supply chain
process.
Assortment Planning and Market Basket Analysis
The assortment planning and market basket analysis is the fundamental concept that is
used by the IBM Company to ensure that the inventory levels are kept standing in order to meet
the growing market. The company has been able to deliver goods that are required by the
consumers to the sales outlets, the company plans to supply goods to the respective retailers in
the market. Therefore, the logistic management is used to monitor the company products from
the storage in the warehouses to the point of sales where retailers are considered to the relevant
sales point for the company. However, the IBM Company is able to conduct the supply chain
approach where varieties of products manufactured are made available to the market, allowing
the consumers to purchase different products at the same time at the same point of sales (Grant,
Wong, & Trautrims, 2017).

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Fixed-order-interval (FOI)
The fixed-order-interval is an inventory management model that is considered to be
essential to any manufacturing company. IBM is a multinational manufacturing company that
that controls its inventory using the fixed-order-interval. The fixed-order-interval is a vital
inventory model that is used control the flow of stock in the market, this model is used to
monitor the flow of specific items that are produced and manufactured at a time interval. IBM
Company is known to have a continues business operations which their demand are stable and
predictable with a realizable accuracy. Through the retail outlets, the IBM Company is able to
monitor the flow of its products, especially those that have demand to be predictable and
realizable. Therefore, the Fixed-order-interval (FOI) is an inventory management model that is
applied by the IBM Company in realizing its business success.
ABC inventory analysis
The ABC inventory analysis is a vital model that is used to control the flow of inventory
of an organization. This inventory analysis model is important to the company since it helps the
organization to identify its inventory items that can represent the great value. The company
management could decide to invest and capitalize more on the items that are considered to
increase the profitability making for the company. However, the analysis tool allows the
company management to ensure that the important items in the market are not falling below the
minimum level, therefore enhances that the company inventory turnover is low. The IBM
Company is considered to have improved its inventory turnover in 2016-2017. This
improvement in inventory turnover is due to application of ABC inventory analysis model
(CSImarket, 2017).

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Apparently, the IBM company fill rate is considered to be essential element that is used
to determine the product flow in the market. The fill rate represents the fraction of the consumer
demands that is met by the company using the available stock. By maintaining its supply chain
and logistic measures, the IBM Company has ensure that the customer demands are met by
ensuring that all the products are supplied to the market in time, especially according to a short
interval of time (Lin, 2017).
The IBM Company has ensure that they meet the current customer demands by replacing
its product. For instance, the company has improved the CPU of its products. The first generation
of Central Processing Unit produced by the company supported x86-style little-endian data. The
current generation of version completely supports the little-endian operations, this implies that,
the new generation can be ported with a simple recompile, this makes it to be attractive
compared to the old versions of CPU. This has improve obsolete strategy for the IBM Company
(IBM, 2015).

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Conclusion
The study has presented as the vital part of organizational operation and as the
fundamental component of supply chain management. The purpose of accelerating the logistic
management and supply chain operation in an organization is to ensure that there is flow of
material goods to the storage of goods and services, as the relevant information is provided
between the point of origin to the point of consumption.
IBM Company is a multinational corporation that has invested in technology business
industry since 19th century. The company has put in place the logistic management components
in collaboration with essential marketing strategies to ensure that they keep their competitors at a
pay. Apparently, the IBM Company has ensured that they have logistically connected all the
strategic management stakes of production process, marketing and accounting process to
determine their success in the market. Company order cycle plays a key to the company in
planning the supply chain management. The order cycle endorses the IBM Company to allow
consumer to make better decision while they purchase the products. The IBM Company adopts
the order cycle since it takes into account the logistic management concept of making an inquiry,
placing and requesting an order, making payment and supplying products requested by the
consumers
Inventory management is described to be essential constituent principle of logistic
management and supply chain. IBM management has ensure that they incorporate the entire
inventory model to monitor the flow of goods from the point of origin to the point sales. The

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fixed-order-interval, Predictive Inventory analysis, Assortment Planning and Market Basket and
ABC inventory analysis are the inventory management model used by the IBM Company.
References
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controlling the supply chain. . Pearson Education India.

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Battini, D., Persona, A., & Sgarbossa, F. (2014). A sustainable EOQ model: theoretical
formulation and applications. International Journal of Production Economics, 149, 145-
153.
Brooks, R. (2015). Financial management: core concepts. Pearson.
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