Ibm - the Impact of a Central Planning Engine

IBM Presentation

Impact of the Central Planning Engine

The impact that the Central Planning Engine has had on IBM is multidimensional. This system has played a major role in the improvement of planning IBM’s semiconductor supply chain. It has opened the doors to the closest thing to an optimal solution to their supply chain problems that the firm has seen yet. By balancing their capacity constraints and forecasted demands, IBM is now able to handle planning much more quickly and efficiently, from daily operations planning, all the way to long term strategic scheduling. In its daily use, the Central Planning Engine can handle the enterprise data that combines both internal applications and external communication smoothly, and with ease. The CPE is so good with this information, that it can process multiple sets of this data in just one day. Some of the other uses that have made themselves visible for those utilizing this tool are several different types of analyses: what-if analysis, material and capacity planning, asset allocation, order commit, and scenario comparison. While they can be used independently from one another, all of these analyses combine together to create the very near optimal solution for IBM’s supply chain.

That being said, it is easy to list off so many areas that the Central Planning Engine is able to improve upon within the supply chain of the company. In the end though, those in management are going to want to see concrete and tangible results to show that their system is worth their investment. Luckily for IBM, the results have been nothing short of remarkable. The increase in efficiency brought to IBM because of the Central Planning Engine is quite substantial, especially when you consider the size of the firm itself. Here are three of the major improvements realized within the firm from the workings of the CPE. Orders delivered on time to the original commit date have increased by 15 percent. Asset utilization increased by 2 to 4 percent of costs. Lastly, inventory was able to be decreased by 25 to 30 percent. Collectively, improvement within these three categories alone results in countless amount of dollars saved, as well as increased customer satisfaction.

Essentially, this can be attributed to the CPE’s ability to successfully link and synchronized supply chain activities effectively, which has transformed IBM’s semiconductor extended enterprise. IBM now has a much more tightly coordinated network of production, manufacturing and support facilities than in years past, especially since they entered the semiconductor market in 1957. The success of this system has been so great that other major semiconductor firm’s have begun to adopt the technology in order to be able to optimize their supply chains and IBM has. In a way, the Central Planning Engine has set a new standard for the semiconductor market, and serves as the basis for essentially all future innovations for the supply chains of firms that produce these products by allowing them to eliminate the illusion of capacity. The effects of this system may even transcend is original purpose and have benefits realized by those who would never have anticipated so, but for now IBM can be very pleased with reaping the benefits they have sewn in creating such a revolutionary system to improve upon their supply chain.