of Technology & E-commerce

British Institute

MBA INNOVATIVE MANAGEMENT

MODULE: CUSTOMER MANAGEMENT

SUPPLY CHAIN MANAGEMENT

SEPTEMBER’ 2009 ASSIGNEMNT

PRESENTING TO: Dr.KHALID BICHOU

STUDENT ID: 37935

STUDENT NAME: Riyas Mohamed Ismail Athambawa

IBM LOGISTICS STRATEGY

INTRODUCTION:
The up to date skill improves the product and utility to public and customers.
Where the customers are complicated and faster movement. This is very
often requirement and much utility of the function as they were not ready to
wait over a minute during their machine life. the supply chain management
was one, it could cover all the requirement of the customers, need from
supplier to manufacturer to wholesaler to retailer to customer. The way of
process which is called supply chain management. In the common word SCM
includes material, Transport and Logistics. Supply chain management
includes finance management and utility of the ways. In “”short Supply chain
management means Getting thinks to reach faster to the customer with a
minimum cost””. We will describe all these aspects. The logistics of moving
people is fundamental difference from moving cargo. There are different
travel pattern the road, rail, ocean shipping, cargo or people.

The Supply chain management is a logistics, it taken to the higher level of

superiority. A supply chain movement of goods not just from one place to
another.

This article describes about the supply chain management. What is supply
chain management how it works, Logistics, objectives of logistics and
material flow, logistics regression, critism and environmental policy.

What is Supply Chain Management?

The Supply Chain Management is really new management system, It has
come to popular in the world just 25 to 30 years. While analyzing the SCM the
method was in practice several decades ago. It was initially introduced by
consultant and popularized by the academician, practitioners. In simply
Supply chain management is coordinated management of demand and
supply within in and around the organization.

WHAT IS LOGISTICS?

The Logistic is a important part of supply chain management. It means plan,

implementation, control of well-organized, flow of goods and storage, service
and service-oriented constraint meets the customer needs.

OBJECTIVE OF LOGISTICS:

This is the main objective of the logistics management is planning and

management of all activities of goods is to reach the customer with the
minimum of cost.

MATERIAL FLOW:

Supplier

Procurement

Operations

Distribution

Customers
COMPEDITIVE ENVIRONMENT CHANGING:

Following factors are changing the competitive environment widely.

(1)New rules of competition

(2)Globalization of Industry
(3)Downward price on price
(4)Customer taking control.

WHAT IS REVERSE LOGISTICS:

plan process, achievement, control, backward flow of raw material, process

inventory, packaging and finished goods from manufacturer / distributor or
user point to a point of recovery of proper disposal.

Reverse logistics changed time, starting with wrong direction, going through
other emphasis of environmental aspects, coming back to the original picture
of the concept and scope.

➢ The Reverse logistics is different from the waste management

➢ The Different from green logistics
➢ It Considers environment aspects
➢ A main part of sustainable development

LOGISTICS REGRESSION:

This Logistics regression is a similar to several of regression. It is a

continuous dependent variable and several predictor or independent
variables. If recognizable to the concept of multiple regression would find lot
of similarities in structure.
To Develop Logistics regression model, all variable to be discussed can be
used as predictor variable. 0 – 1 dependent variable could be generated
through additional data field.
Case Study:

THE MAN WHO TURNED IBM AROUND – Louis V.Gerstner Jr.

In 1993, IBM one of a global leader in Information Technology was severe

financial problem. It has reported to public $8.1 billion loss as per their
record. Much analysis wrote IBM went to end of the position. But in the year
of 2001 shows net income $7.7 billion. During 1993 – 2001 share price of
IBM stood up 800%. In this period Louis V.Gerstner Jr was heading the IBM.

Never believed long term plans rather he has focused immediate solution.
He identified the customers need and developed solutions to satisfy them.
He was visualized and converted into potential opportunities.

FINANCIAL PERFORMANCE OF IBM for the period of 1992 – 2001

Years Sales revenue Net Income Earning per Employees

($bn) ($bn) share (in $) (000s)
1992 64.5 (4.97) (2.17) 301.5
1993 62.7 (8.1) (3.55) 256.2
1994 64.1 3.0 1.24 219.8
1995 71.9 4.2 1.76 225.3
1996 75.9 5.4 2.5 240.6
1997 78.5 6.1 3.00 269.5
1998 81.5 6.3 3.29 291.1
1999 87.5 7.7 4.12 307.4
2000 88.4 8.1 4.44 316.3
2001 85.9 7.7 4.35 319.9

When Gerstner joined IBM, he was referred as ‘’ guy from Cookie Company’’.
In that time IBM was in worst position. It recorded $325 million loss in the
first half of 1992, stock price declined 15%. Gerstner became CEO of IBM, It
booked 4.97 billion losses in 1992.During the 986 – 1992 IBM overall market
shares slashed 37%. In the former CEO, John Akers already announced
restricting plan to split the company. Personal Computer division was not
getting profit. 105,000 employees had asked to quit.
He visited all IBM facilities all over the world and met the customers,
competitors, senior executive, financial analysts and consultant to know the
actual stat of affairs. He understood the quality of the product to be
superior. This is His first mail to all employees of IBM to recover from
existing state. He was prepared them to face certain tough decisions like
reduction in the workforce. He reduced by 35000.

After six months he announced many human resource initiatives. He

prohibits smoking and alcohol during the office hours. Employees were
announced bonus. Due to huge operation of IBM he decides to decentralize
the authority to the heads of units.

Turnaround strategy:

When the division was facing tough competition with DELL, HP and COMPAC.
Customer complained high prices of mainframe software, so he cuts up to
30%. By 1996 Gerstner continued aggressive networking strategy. This
year revenue was $75.9 billion.

E business Emphasis:

While in 1999 the world was waking Y2K problem, Gerstner established
customer support team. Gerstner was named as man of the year by leading
magazines of US. IBM earned $87.55 billion of revenue and net income of
$7.7 billion.

Under the guidance of Gerstner IBM had good financial performance. After 9
years of service wit IBM Gerstner retired on march 2002, while addressing in
the annual shareholders meeting Apr 2001 Gerstner uttered “” Today agenda
for IBM is leadership in technology, imaging how business and society can
change””.
CRITICISM
The Gerstner has made immensurable credit to IBM. But the employees
criticized his moves intact change of corporate culture. An executive
criticized Gerstner’s approach 1998, “”when I joined IBM, I was proud and
this is the best company in the world, but today another company. Pride
culture destroyed, there were no longer company style. He was running as a
financial institution, Jimmy Leas, the IBM engineer and patent Lawyer
remarked as “”Gerstner slashed retirement for the employees to make profit.
His allegation was Gerstner was receiving high compensation $73.6 million in
the year of 2000.

Analysts were also alleged Gerstner had not successful in capitalizing of IBM
capabilities.

CONCLUTION:

However the CEO of IBM has made profit of the company and to its
shareholders. Gestener reverted the company from major risk, which was in
submerging in loss. But the remuneration cuts, distribution back of many
employees were not enough so good in corporate culture. Is this could be
done in the normal company. A Corporate that has global business worldwide
should have certain standardized amenities to be provided. here as the CEO
Gerstner has made well in customer support arrangement and the other hand
for employee side he didn’t take much care.

Reference:
(1) David Blanchard, (2007), Supply chain management best practices, John
Wiley & Sons Inc.
(2) Rommert Dekker, Moritz Fleischmann, Karl Inderfurth, Luk N.Van
Wassenhove, (2004), Reverse Logistics, Springer - Verlag
Berlinheidelberg.
(3) Purpa Halady Rao, (2006), Predictive modeling in Strategic marketing, PHI
learning Pvt ltd.,
(4) Peter M.Tirschwell, (2003), International logistics, Kluwar Academic
Publication.
(5) Michael A.Hitt, R.Duane Ireland, Robert E.Hoskisson, (2007), Strategic
Management, Thomson south – western
(6) Dr.Khalid Bichou’s moodle materials