No More Power Systems Quick Ship; IBM Has a Better Way
March 14, 2011 Timothy Prickett Morgan
Linda Sanford, senior vice president for enterprise transformation at IBM, is in the prowl to wring $8 billion out of IBM’s internal cost base to do business. And many of the things that Sanford and her team will be doing to change the way IBM works internally and with outside partners and customers are going to affect you.
Sometimes, it will be for the better. And Sanford gave an example of an improvement that is also saving Big Blue a little money at last week’s Investor Day, held at the TJ Watson Research Center in Yorktown Heights, New York.
Sanford, who helped launch and run IBM’s RS/6000 PowerParallel server business a decade and a half ago and who has managed IBM’s storage business and mainframe division in her long career at IBM, has a master’s degree in operations research from Rensselaer Polytechnic Institute. And she is big on standardization and automation.
“I honestly believe that 80 percent of what you can and should do should be standardized,” she told the Wall Streeters at the event.
And one of the things that got the review and then the axe was IBM’s “quick ship” program for Power Systems. Sanford explained that IBM used to have business partners do final configurations of Power Systems machines for their downstream customers, but for customers who needed a quick ship out of the IBM factories–say, in case of a disaster that wiped out their machine–Big Blue kept some preconfigured machines in the warehouse, collecting dust, just in case someone needed a box.
To save money on inventoried boxes and space, IBM looked at how it was building Power Systems boxes in Minnesota, Poughkeepsie, and China and decided that the best thing was for IBM to do final assembly for all Power Systems machines based on orders that are coming in from resellers. Now, IBM can move an order to the front of the line in an emergency and has saved $3.5 million a year in inventory that the quick ship program required.
Every little bit helps. Helps the IBM share price, not necessarily the street price of a Power Systems box, of course.