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Improving Supply-Chain-Reconfiguration Decisions at IBM

Author

Listed:
  • Craig W. Kirkwood

    (Department of Supply Chain Management, W. P. Carey School of Business, Arizona State University, Tempe, Arizona 85287-4706)

  • Matthew P. Slaven

    (Storage Manufacturing Sourcing, IBM, San Jose, California 95193)

  • Arnold Maltz

    (Department of Supply Chain Management, W. P. Carey School of Business, Arizona State University, Tempe, Arizona 85287-4706)

Abstract

We developed a decision-support system for IBM’s supply-chain-configuration decisions. Managers and analysts used this prepackaged multiobjective decision-analysis procedure in facilitated workshops to analyze mid-level supply-chain configuration decisions based on 22 considerations covering cost, quality, customer responsiveness, strategic issues, and operating constraints. These multiattribute utility analyses incorporated uncertainty through expert estimates of probabilities and were implemented in a spreadsheet environment. We applied the approach to five IBM supply-chain decisions, and the results satisfied internal stakeholders that the analysis correctly included financial and nonfinancial considerations along with the associated risks and provided a useful audit trail for executive management. IBM now views this decision-support system as a potential template for future supply-chain decisions.

Suggested Citation

  • Craig W. Kirkwood & Matthew P. Slaven & Arnold Maltz, 2005. "Improving Supply-Chain-Reconfiguration Decisions at IBM," Interfaces, INFORMS, vol. 35(6), pages 460-473, December.
    • Handle: RePEc:inm:orinte:v:35:y:2005:i:6:p:460-473
    DOI: 10.1287/inte.1050.0166
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    References listed on IDEAS

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    1. Donald L. Keefer, 1994. "Certainty Equivalents for Three-Point Discrete-Distribution Approximations," Management Science, INFORMS, vol. 40(6), pages 760-773, June.
    2. Donald L. Keefer & Samuel E. Bodily, 1983. "Three-Point Approximations for Continuous Random Variables," Management Science, INFORMS, vol. 29(5), pages 595-609, May.
    3. William B. Poland, 1999. "Simple Probabilistic Evaluation of Portfolio Strategies," Interfaces, INFORMS, vol. 29(6), pages 75-83, December.
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    Cited by:

    1. Qu, T. & Huang, George Q. & Zhang, Yingfeng & Dai, Q.Y., 2010. "A generic analytical target cascading optimization system for decentralized supply chain configuration over supply chain grid," International Journal of Production Economics, Elsevier, vol. 127(2), pages 262-277, October.
    2. E. Günter Schumacher & David Wasieleski, 2013. "Institutionalizing Ethical Innovation in Organizations: An Integrated Causal Model of Moral Innovation Decision Processes," Post-Print hal-01514547, HAL.
    3. Wu, Desheng & Olson, David L., 2008. "Supply chain risk, simulation, and vendor selection," International Journal of Production Economics, Elsevier, vol. 114(2), pages 646-655, August.
    4. E. Schumacher & David Wasieleski, 2013. "Institutionalizing Ethical Innovation in Organizations: An Integrated Causal Model of Moral Innovation Decision Processes," Journal of Business Ethics, Springer, vol. 113(1), pages 15-37, March.
    5. Naima Saeed & Kevin Cullinane & Victor Gekara & Prem Chhetri, 2021. "Reconfiguring maritime networks due to the Belt and Road Initiative: impact on bilateral trade flows," Maritime Economics & Logistics, Palgrave Macmillan;International Association of Maritime Economists (IAME), vol. 23(3), pages 381-400, September.

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