Thursday, May 12th, 2011 - 10:04
Thursday, May 12, 2011 - 09:29
Applying rigorous management practices to supply chain activities and energy consumption can save money and streamline operations.
Today’s business environment in both public and private sectors is uncharted territory. In the past, business organizations have coped with dramatic change and uncertainty, such as global and regional war, political unrest, disruptions in source of supply and rising cost of resources, foreign and domestic competition, rapidly evolving technology, climatic change, critical financial constraints and general economic downturns. However, today’s business organizations face all of these challenges at the same time. While the current business environment is more challenging than ever, leading businesses have thrived and profited in this “sea of change” by rapidly and efficiently adapting their supply chain.
As detailed in our publication, Strategies to Cut Costs and Improve Performance, improving government supply chains represents a significant opportunity for cost reduction and avoidance. Effective sourcing, planning, repair operations, transportation, warehousing, asset management and supporting operational processes can be a tremendous lever in reducing costs. For example, IBM has maintained and improved profitability and growth through a series of planned strategies and rapid adaption to unforeseen domestic and global events. This blog series will showcase some of the strategies your organizations should consider as you begin the process to streamline your supply chains.
The graphic below targets our Implementation Activities and potential savings we will address in our blog series (click the image for higher resolution).
While the above illustrates opportunities to reduce costs and improve resource productivity within Government Agencies, they have also contributed billions of dollars annually to IBM’s bottom line profitability and served as an implementation framework in Government and private sector customer environments.
Our Blog series will also address smart initiatives for energy and facilities management, which we have successfully applied across a number of IBM campuses. To highlight our point, let’s look at an example from Implementation Activity #3 – Energy Management. Based on our experience, the combination of the following energy improvement initiatives could generate $20 billion in savings over 10 years:
- Organizations can reduce IT-related energy costs by 25 percent through call-center consolidation.
- The aggressive adoption of voice, video, document sharing and collaboration tools can reduce travel-related expenses by 10-20 percent.
- The implementation of new building management technologies can reduce energy consumption for the 3.1 billion square feet of space currently occupied by federal agencies.
- Advanced fleet management systems can reduce the size of the fleet and reduce energy consumption by 10-20 percent.
By sharing our strategies and experiences on how to cut costs and improve productivity in supply chains, much like the above example, our aim is to generate a conversation centered on improving business effectiveness and efficiency.
We hope that through this discussion, we will further socialize the opportunities that will improve our collective missions, within the current budget challenges. We encourage and look forward to your comments, suggestions and continuing the exchange of ideas that is the foundation of thriving in this uncharted business territory.
Tim Wood is a Partner and IBM Public Sector Supply Chain Management Leader. He has more than 23 years of experience leading major supply chain transformations in both private and public sector organizations, as executive, program manager and/or senior supply chain strategist within the aerospace and defense, high technology, consumer products, industrial products and pharmaceutical industries. Mr. Wood recently chaired the 2010 Defense Logistics Conference and serves as a strategic advisor to multiple Public Sector supply chain executives.
He earned his undergraduate degree in Industrial and Systems Engineering from Ohio University and a Masters of Business Administration (MBA) degree from the University of Dayton.
Tim Wood (email@example.com)