IBM relocates procurement headquarters to China
IBM said Thursday it is transferring its global procurement headquarters in Somers, N.Y., to Shenzhen, China, to gain competitive advantage in emerging markets.
The information technology manufacturer and business process services firm said the move illustrates its intent to operate as a global concern and is part of a multiyear makeover of its supply chain. A key tenant of IBM’s new approach is developing a flexible organization that can quickly respond to fluctuations in customer demand and market opportunities, as well as disruptive events.
“In a multinational model, many functions of a corporation were replicated around the world — but each addressing only its local market,” said John Paterson, IBM’s chief procurement officer, in a statement. “In a globally integrated enterprise, for the first time, a company’s worldwide capability can be located wherever in the world it makes the most sense, based on the imperatives of economics, expertise and open environments.”
It is the first time IBM has moved the headquarters of a global unit outside the United States. Shenzen is a hotbed of IT industrial activity located in the Pearl River delta outside Hong Kong.
IBM has operated a large regional procurement center in Shenzen with 1,850 buyers and logistics employees for more than a decade. The company works with nearly 3,000 suppliers across Asia, accounting for about 30 percent of IBM’s annual $40 billion procurement spend.
Paterson is moving to China to help train managers accustomed to sourcing hardware in how to identify and build relationships with software and IT service suppliers.
IBM sold its PC manufacturing business to Chinese firm Lenovo in 2004, and its hard-drive business to Hitachi, but still makes servers and other types of equipment for computer networks.
Basing procurement centers around the world enables IBM and other companies to better train and oversee suppliers to meet the strict standards.
IBM relocates procurement headquarters to China
