October 22, 2007

Operations Management Lesson 5 Exercise

Operations Management Lesson 5 Exercise

For this blog, regarding the SCM, I’ve chosen to talk about the “IBM Integrated Offer Management”, in case of presenting an offer to customer.

This is a de-integration process because all the IBM divisions involved in this process are considered as “independent”; each of them have to achieve their own targets that are not linked with the objectives of the others.

The main “actors” of the chain are:

-        “SECTOR”: it is represented by the IBM sales responsible for the “high level relationship” with customer;

-        The 4 main “IBM Divisions” (HW, SW, Services and Consultancy”): they are represented by the IBM sales brand responsible;

-        “DEAL HUB”: it is represented by IBM persons responsible for the collecting of the whole stuff to be aggregated in the offer.

Sector --->

IBM Divisions --->

Deal Hub --->

Customer Proposal

The Sector indicates the way for the IBM divisions to proceed, maintaining the control of the whole customer business.

IBM Divisions are responsible about the prices of the all Brands belonging to the single Division, the special bid requests and they are also responsible of the contractual form to be applied to the products or services they are managing and selling.

The Deal Hub is the “Collector” of the information and authorizations got from the Divisions.

The Deal Hub put all the information together and, at the end, is able to present the final offer to Sector, in order to formalize it to customer.


As each ring of the chain is assumed to have an internal (local) process to be respected, sometimes this causes “tremendous waste and delays” (Womack and Jones “Learn Thinking”, 1996).

The delay is often related to the huge amount of authorizations that a single “actor” has to put in place; sometimes the complexity of the offer requirements led to an energy dispersion in the pursuit of internal process optimization, rather than supply chain optimization.

Other disadvantage is represented by the rapid change of internal policies and the consequent adaptation of people working in; as per consequence, time to market is negatively effected by.


Overall, the collaboration between IBM divisions is guaranteed and the concentration of capabilities also guarantees the quality of job. That leads to a more efficient planning of demand and distribution, and to a consolidated view of global sales.

The cost of work is splitted by the rings of chain and it is under control.

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