Manufacturing Industry
IBM buy changes as Big Blue depends on suppliers. (component procurement)(Electronics Purchasing: Purchasing Strategies)
Purchasing, August, 1997 by Carbone, James
IBM has a tradition of vertical integration much like such other industrial powerhouses as General Motors and General Electric. In the not too distant past, if a component was critical to an IBM product, Big Blue would make it. As a result, IBM built fabs to make a variety of components such as microprocessors, DRAMs, and ASICs. IBM factories also built monitors and disk drives.
But over the past 10 years, IBM has realized that it cannot meet all its component needs and that vertical integration can shut out IBM from important technological developments. As a result, Big Blue has been increasing its reliance on outside suppliers. Consider: In 1986, 28% of its revenue was spent with outside suppliers. In 1996, that figure was 45% and will continue to grow....
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