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Lenovo AU unchains IBM supply lines

Lenovo's Australian division is re-engineering a supply chain system inherited from IBM under moves to boost brand awareness and respect for the relatively lesser-known Chinese PC brand here. The move is part of a global supply chain reorganisation being led by Lenovo vice president Liu Jun, although executives said the local push has its roots in an initiative commenced by IBM before the Chinese company acquired Big Blue's PC division in May.

Lenovo's Australian division is re-engineering a supply chain system inherited from IBM under moves to boost brand awareness and respect for the relatively lesser-known Chinese PC brand here.

The move is part of a global supply chain reorganisation being led by Lenovo vice president Liu Jun, although executives said the local push has its roots in an initiative commenced by IBM before the Chinese company acquired Big Blue's PC division in May.

Lenovo's local operations director Annie Heetel told ZDNet Australia the process had, amongst other things, involved migrating management of the supply chain off a solution "piggybacked" on a SAP platform based in Singapore and designed to deal with the whole South-East Asian region.

The local division now has its own SAP-based solution, developed with the aid of several external specialist SAP consultants.

Lenovo's local chief executive Alan Munro added his division was also seeking a new vendor to manage distribution of Lenovo products from the company's China-based manufacturing plants to Australia.

"Currently we use five vendors for that, and it's quite complex, and it's not as efficient or effective as it needs to be," he said this morning.

Munro said while the supply chain re-engineering process had started 12 months ago, it had "accelerated" since the acquisition.

The chief executive and his team also received help on the reorganisation from IBM's Business Consulting Services Group, specifically partner Greg Morris.

"I engaged an external consultant to come in and look at how we operate as a business internally," said Munro, adding the aim was to find out if his division was as internally efficient and effective as it needed to be in its new identity as a PC company "as opposed to being part of a large corporate like IBM".

"He came up with 12 recommendations, and we're implementing all of them," he said.

"As an IBM, the supply chain is important, but it's only important to a part of the business," he said. "It's not important to the software part of the business or the services part of the business."

"To a PC business, it's core to being successful," he added, noting the re-engineering process had not been without "glitches" and "bumps along the road".

Stepping up to the plate
Munro said one of the challenges his division had faced was the loss of IBM's local higher management structure.

"The leadership team we had inside Lenovo [the Australian division] was a middle management team inside of a large corporate -- IBM," he said.

"We needed to develop leadership skills to stand up as a company on our own. So we spent a lot of time over the last 9 months really, building up skills in the leadership team, and that continues to be a focus."

Lenovo is likely to make a strong branded push into Australia's consumer PC space early next year to coincide with its sponsorship of the February winter Olympics in Italy. There are no plans to offer any of the non-PC products Lenovo offers in China.

The company's marketing director Peter di Pietrantonio acknowledged the introduction of the Lenovo brand would require "significant reassurance" to consumers who Munro admitted "had never heard" of it before.