IBM is transferring its chief purchasing operations here to expand and strengthen its internal procurement skills in the region, a move that highlights Asia’s growing importance in the global supply chain, the company said.
The decision to transfer its chief procurement office from Somers, N.Y., to Shenzhen marks the first time the headquarters of a global IBM division has been located outside the United States, according to the company.
“In a multinational model, many functions of a corporation were replicated around the world -- but each addressing only its local market,” said John Paterson, chief procurement officer for IBM. “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.”
White Plains, N.Y.,-based IBM chose Asia as the global procurement headquarters because it already has more than 1,850 procurement and logistics employees in the region, many of them at its China Procurement Center in Shenzhen, which has been in operation for more than a decade.
The center is one of IBM’s largest procurement organizations outside the United States. The company also has strong and collaborative relationships with nearly 3,000 suppliers across Asia, accounting for about 30 percent of the $40 billion IBM spends annually on procurement.
The move will help IBM expand its own capabilities, but it also has benefits for local markets, Patterson said. IBM’s procurement activities have long aided the economic development of the regions from which it buys. In China, and in Asia, for example, he said the investments IBM has made in its hardware business to ensure suppliers develop the capabilities to meet the very stringent requirements of IBM and its clients have helped those companies become more competitive and grow their businesses on a global scale. He expects the same scenario to play out in the software and services arena.
“IBM is a global company,” Paterson said. “Today, that is as much about making efficient and effective use of skills everywhere in the world and integrating them globally to serve clients, as it is about developing deep local relationships in markets around the world. We are becoming a globally integrated company that allows us to do both.”
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