September 1997, Volume 3, No. 9 IBM Launches Advanced Fulfillment Initiative

Computer manufacturer IBM Corp. (Somers, N.Y.; http://www.pc.ibm.com) has launched the Advanced Fulfillment Initiative (AFI), which will vastly simplify how IBM PCs are built, customized and delivered. AFI seeks to improve every aspect of the supply and fulfillment chain — from product design and parts procurement to forecasting, inventory management, assembly, shipping and delivery. The goal is to permanently reduce both piece-part and finished product inventories at IBM and reseller locations, lowering costs and enabling the savings to be passed on to customers. AFI is built around the IBM Authorized Assembler Program, under which IBM business partners custom-configure open bay systems to end-user specifications. IBM has 12 business partners assembling 20% of its commercial desktop products as well as a growing portion of its PC Server offerings. In order to facilitate rapid channel assembly, IBM has begun designing its products with "snap-in" design features — for example, the NLX-style motherboard — as well as such simple things as fewer screws and a more compact design. The company is also working with many of its parts suppliers to ship directly to its reseller partners — cutting out an extra step in the process, reducing costs and accelerating the pace at which products can be made available. To improve availability, inventory flow and turnover, IBM has also appointed fulfillment managers to work full-time with resellers to continue to improve the IT system that will track real-time supply and demand for parts and products. IBM's ultimate goal is to develop a virtual enterprise with its suppliers and business partners.

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