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Improving Supply-Chain-Reconfiguration Decisions at IBM

Department of Supply Chain Management, W. P. Carey School of Business, Arizona State University, Tempe, Arizona 85287-4706
Storage Manufacturing Sourcing, IBM, San Jose, California 95193
Department of Supply Chain Management, W. P. Carey School of Business, Arizona State University, Tempe, Arizona 85287-4706
craig.kirkwood{at}asu.edu
matt.slaven{at}us.ibm.com
arnie.maltz{at}asu.edu

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.

Key Words: decision analysis: multiple criteria; industries: computer; electronics