Using Teams in Production and Operations Management

Governments around the globe are investing in businesses and banks in an effort to avoid a complete collapse of affected institutions. However, the general public is not convinced that the government will be able to effectively run the businesses it has acquired with any better dexterity than existing mismanaged government budgets. Furthermore, although the infusion of funds may temporarily secure investments, it does not effectively alter the transactions that instigated the decline. (/money, 2011)
Inflated values of derivatives, fueled by ambitious speculation and fortunes amassed by paper transactions rose to catastrophic levels. Derivatives are commitments to purchase commodities or financial instruments at a fixed price, with an agreement to take profits if the value of the asset rises. In recent years, mortgages sold at subprime rates were bundled into securities. Lehman Brothers and Merrill Lynch created offsetting credit derivatives to protect investors in the event that these securities defaulted. Credit derivatives benefitted from profits derived from the increased number of subprime loans and home sales during the real estate bubble. When housing prices dropped and interest rates rose, many adjustable-rate subprime mortgage owners were unable to keep up with the higher monthly payment. Mortgages defaulted, demand for houses cooled abruptly, and the suddenly above market rates of credit derivatives collapsed. AIG was the biggest investor with US $527 billion in these bonds. (/money, 2011)
During these trying times International Business Machines third quarter income amounted to US $2.8 billion, or US $2.05 per share. That is 20 percent higher than the US $1.68 per share as compared to the same quarter last year, and it surpasses the US $ 2.02 per share predicted by Thomson Reuters. IBM is predicting that it will achieve 22 percent earnings growth for the year. (/money, 2011)
Many will remember IBM as the company that brought computers to a global stage. From punch cards and gas tubes, to PC's and mainframes, the roots of the computer family tree invariably include IBM. Since licensing the brand name to Lenovo, a business strategy that bolstered both organizations, IBM has relinquished production and sales of computer hardware devices in lieu of a diversified portfolio of software and services. IBM’s emphasis on long term service contracts now accounts for more than half of its current revenue. As the economic conditions place strains on clients, the rate of growth is expected to slow, but is not expected to negatively impact the overall percent of profitability. By growing services as a percent of the company, and by offering highly profitable software solutions, IBM has increased profit margins from 41.3 percent to 43.3 percent gross margin as compared to the same quarter last year. (/money, 2011)
I(nternational) B(usiness) M(achiness) Corporation has a multi-faceted history. Today they are the world's top provider of computer products and services. (/ibm, n.d.) While IBM made its name in computer hardware; for more than 70 years, IBM and its predecessor companies, Standard Time Stamp Company (_1890.html, n.d.), Computing Scale Company – Day Time Register Company – Syracuse Time Recording Company, (_1900.html, n.d.), and the Computing Tabulating Recording Company or CTR, (_1910.html, n.d.) produced time-keeping equipment for schools and businesses. (/ibm, n.d.)
The company's information technology, business services, and software units are now among the largest in the world. The company is also one of the largest providers of semiconductors, and its computing hardware legacy lives on in the form of its industry-leading enterprise server and data storage products lines. (/ibm, n.d.)
IBM's clients include many different kinds of enterprises, from sole proprietorships to the world's largest organizations, governments and companies representing every major industry and endeavor. The majority of the company's enterprise business, which excludes the company's original equipment manufacturer (OEM) technology business, occurs in industries that are broadly grouped into six sectors:
• Financial Services: Banking, Financial Markets, Insurance
• Public: Education, Government, Healthcare, Life Sciences
• Industrial: Aerospace, Automotive, Defense, Chemical and Petroleum, Electronics
• Distribution: Consumer Products, Retail, Travel, Transportation
• Communications: Telecommunications, Media and Entertainment, Energy and Utilities
• Small and Medium Business: Mainly companies with less than 1,000 employees. (/press, n.d.)
They employ 426 thousand plus employees at facilities in New York, Ohio, Michigan, and Washington, D.C. in the United States; Ontario, Canada, Brazil, Israel, Japan, Sweden, and all over the world. (/planetwide/, n.d.)
IBM is traded on the N(ew) Y(ork) S(tock) E(xchange) and has been named the worldwide market share leader in the application infrastructure and middleware software segment several times. They have maintained that lead for over a decade. IBM had a market share of 32.6% in 2010, and grew 14.4%, twice the overall market. The worldwide application infrastructure and middleware software market grew 7.3 % to $17.6 billion. IBM also holds the number one market share position in key sub-markets; growing faster than the overall IT market. (/press, n.d.)
Business leaders such as IBM are addressing many challenges and opportunities in today's growingly complex supply chain environments, including:
• Developing operations and supply chain strategies that improve effectiveness and efficiency of processes, and support innovation across the value chain
• Leveraging process diagnostics and benchmarking, scenario-based strategies and lean principles to improve operational efficiency
• Generating savings and improving operational productivity through new strategies and technologies
• Creating an operational foundation for future growth, capacity and flexibility
• Deploying and optimizing globally integrated capabilities and operations
• Driving highly flexible and responsive operational environments (/strategy/, n.d.)
IBM’s operations and supply chain management consultants, part of IBM Global
Business Services®, is one of the world's leading management consulting practices, assisting clients in achieving new and sustainable business value by formulating supply chain strategies, managing change and setting direction for new transformations and operational models. IBM provides solutions to many of the most difficult operation and supply chain challenges by providing expert analysis, business planning, vision development, project planning, business case creation, and ultimately linking strategy to execution in ways that build continuous improvement and success. (/strategy/, n.d.)
IBM has always made use of cross-functional teams in their production and operations management. For instance in July of 1968, they opened a new plant in Brooklyn, New York, to manufacture cables for use with their in their standard computer line. The team consisted of General Manager Ernest K Friedli, Henry Jackson, Manager of Personnel; John W. Lawson, Production Control Manager; Edgar A. Fitt, Information Manager; Alfred J. Iannone, Manager, Plans and Operations; Matthew Whithead, II, Legal Counsel; Eugene E. Douglas, Manager of
Manufacturing Operations; Dean M. Kintner, Staff Assistant; and Eric J. Flood, Controller. The plant, which began with only seventeen employees, grew to more than three hundred employees within a year. (/strategy/, n.d.)
In 1993 Lou Gerstner became IBM’s CEO. The company was on a slight decline so he started a return to the culture that the company had drifted away from. He re-trained the employees, teaching them to return to the client-centered focus the company was known for, and making the departments collaborative again. IBM has thrived and is now a leader in using collaborative technologies to connect employees with each other, and with clients. (/blog/)
“I want to thank the factory workers for the constant improvement in the quality of our products. That means much to the salesmen. It saves them time and it saves time for our service force. When our machines work perfectly at all times our customers are always satisfied, and a satisfied customer is our most valuable advertisement.” Thomas J. Watson, CEO, IBM (ibm/history, 1936)
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