Forbes Take: Paterson and IBM Scale the Great Wall

I was glad to see that Forbes picked up on John Paterson's move to China (hat tip goes to David Swain). One of the more insightful comments in the article is that IBM "uses airfreight [within China] as it shortens order-to-delivery cycles [and] strangely enough, it can also be cheaper. Having components sit in a ship for six or eight weeks is not a very effective business model." Clearly, Paterson and his team have spent significant time and effort developing total cost calculations and landed cost models to come to the airfreight decision. And they're applying this type of knowledge on a global basis. According to Paterson, IBM operates "within a global structure, and we have procurement people in 80 countries and in 400 different cities ... We run the business from a different place every day. As China is a significant supply base for IBM, being closer to the action will be a helpful step forward. You don't get a full sense of what is happening in a place like Shenzhen by visiting it once per quarter." You can read my earlier take on the move of IBM's most senior Spend Management executive here.

Jason Busch

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