UPGRADED SALES and fulfillment automation systems have helped IBM increase sales and cut back-end costs on two lines of midrange computers.
Over the past year or so, the improvements have led to nearly a 30% increase in sales of those lines to distributors. Fulfillment and other back-end costs have also dropped by an estimated total of 400% since 1995.
But money wasn’t the only incentive to initiate the upgrades; customer service played a part as well. IBM wanted to avoid more problems like it had in India last year, when it took nearly half a year to ship and install AS/400 and RS/600 computers at a custom site because of hassles between local distributors and IBM’s U.S.-based factory. The multitude of confused faxes, e-mails and paper between the two countries coupled with the customer’s not knowing about IBM and/ or supplier inventories and other pertinent information showed the company there had to be a better way.
The upgraded system works by giving IBM distributors a central Web site (www.ibm. com/partners) where they can find information on products, ordering, credit, contracts and order status. The system lets customers know when equipment is available, and where there might be logistical problems before orders are placed.
What’s more, PartnerCommerce is said to cut out extraneous information by letting distributors and other business partners know about what’s going on only in theirspecialized areas.
These efficiencies slashed distribution costs from approximately $75 million to about $15 million, says IBM channel logistics manager Rick Bloyd. The company has also been able to cut the number of people required to perform fulfillment and other back-end functions. Bloyd says these staffers were typically reassigned within the company.
So far, the program has been rolled out to all of IBM’s 350 U.S. distributors including Pioneer, KeyLink Systems, Hall-Mark, Pinacor, JBA-International, Business Partner Solutions, Inacom, Gates/ Arrow, Champion Computer, Centron and Medic.
Starting in the third quarter of this year, the computer giant plans to further extend PartnerCommerce out to its larger corporate customers like Ford Motor Co., Blue Cross/Blue Shield and Boeing Aircraft, as well as to IBM’s more than 200 smaller U.S.-based resellers.
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