In this lesson exercise I would like to review the integrated supply chain of IBM Global Financing (IBM Credit Corp.) on the world wide level.
IBM Global Financing (IGF) proivdes different types of financing for IBM customers. Among IGF products there are different type of leases and loans, innovative credit line schemes and other. In most of the countries IGF is a part of IBM Corporation local subsidiary, but as far as IGF acts as a bank I would prefer to look at it as an separate finanicng entity.
Taking into consideration all mentioned above I can describe the IGF supply chain as the following:
This chain perfectly shows the flow of the IGF product from "raw material" stage (money in the bank) to complicated financial product with number of additional services, options etc.
This chain is well developed and pretty mature so main focus should be on the issues of price of financing, speed and quality of made decisions, additional benefits to standard products.
- Partners in the supply chain splits the risks Banks do not accept the credit risk of the end customer which is deifnitely much lower than IBM Corporation credit risk.
- IBM reduces its costs using cheaper lended money than using own capital.
- IBM has a pool of banks and able to get the best offer on the market at each point of time.
- Banks receives the consolidated pool of IGF deals (not deal by deal). This helps them to deacrese their SG&A expenses portion.
- IBM Global Financing injects specialized IT knowledge into pure financial business.
- Dependability of IBM on the Banks refinancing.
- Vulnarability of the chain (chain is open to external negative impact like financial crisis).
- Respectively longer decision-making time due to the involvement of global treasury.