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SHANGHAI, Oct. 13 - Computing1 giant IBM Corp said it was transferring its chief purchasing operations to China, a move that highlights Asia's growing importance in the global supply chain.
The decision to transfer its chief procurement2 office from New York to Shenzhen marks the first time the headquarters of a global IBM division has been located outside the US, the company said in a statement on Thursday. The leading American technology and software group began shifting its Asia-Pacific headquarters from Tokyo to China's commercial hub of Shanghai in 2004, a process it completed earlier this year. It also has major research, software, hardware and computer services operations in India which make it that nation's sixth largest technology-related employer. The addition of its global procurement office to Shenzhen, where it has operated for over a decade and many of its 1,850 employees in Asia are based, is aimed at reshaping the company's supply base in the region, IBM said. The firm that revolutionized office work with electronic typewriters and then personal computers collaborates3 with 3,000 suppliers across Asia that account for about 30 percent of the 40 billion dollars IBM spends on annual procurement. "The demand for software and services skills -- across Asia and worldwide -- is growing," said the group's global procurement chief John Paterson. "To meet the demand, it will require developing relationships with new partners and suppliers and working with existing ones to help them build skills, processes and management practices to compete globally in the services market." IBM, once a leading hardware maker4, struggled to transform itself over the past decade into a software producer but now earns about half of its revenues from outsourcing and IT consulting. In May last year, it sold its personal computer unit to Chinese group Lenovo for 1.75 billion dollars, leaving the US company focused on business mainframes and consultancy services. Paterson said it illustrated5 a shift underway at IBM from a multinational6 corporation to a new model -- a globally integrated enterprise. "In a globally integrated enterprise, for the first time, a company's worldwide capability7 can be located wherever in the world it makes the most sense, based on the imperatives8 of economics, expertise9 and open environments," he said. For the first six months of the year, IBM recorded a 15.4 percent rise in net profits to 3.73 billion dollars, on a revenue drop of six percent to 42.55 billion dollars.
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