IBM has announced the relocation of its global procurement headquarters to Shenzhen.
IBM says it chose Asia as the global procurement headquarters because it already has more than 1,850 procurement and logistics professionals in the region, many of them at its China Procurement Center in Shenzhen, China, which has been in operation for more than a decade. The center is one of IBM's largest procurement organizations outside the U.S.
The company also has collaborative relationships with nearly 3,000 suppliers across Asia, accounting for about 30% of the US$40 billion IBM spends annually on procurement.
The company says the decision to move Chief Procurement Officer John Paterson's office from New York to China marks the first time the headquarters of an IBM corporate-wide organization has been located outside the United States.
"In a multinational model, many functions of a corporation were replicated around the world — but each addressing only its local market," said Paterson. "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."
The other reason Paterson has relocated to Asia is to lead an effort to reshape the company's supply base in the region. Although IBM has been sourcing in Asia for more than 50 years, most of it has been in support of its hardware businesses.