IBM to move purchasing headquarters to China

By Jim Carbone, Executive Editor, Electronics, Purchasing Magazine -- Purchasing, 5/25/2006

IBM says it will move its global purchasing headquarters from WestchesterCountyN.Y. to Shenzhen, China effective Aug. 1

John Paterson, vice president and chief procurement officer for IBM, will re-locate from Somers, N.Y., to China, and run IBM's Global Procurement operations from there. This is the first time IBM has located the headquarters of a global corporate function outside the United States.

The move is designed to help IBM both capitalize on the opportunities in China and help shape them. This requires executive leadership that is focused on deepening IBM's talent pool in the region and developing stronger, more collaborative partnerships with our suppliers, according to an IBM spokesperson.

“IBM is a global company and we have a presence all over the world,” says Paterson. “Over time, some of these areas of the world grow in terms of their importance to us as a market and as a supply base. Clearly that is the case with Asia Pacific. While I am going to China, we view this as more of an Asian move than an explicit China move,” he says.

He notes that IBM has been sourcing in Asia for 40 years. Over that time, the electronics component supply base has expanded from Japan to Korea to Taiwan and now is moving to China and other parts of the world. “That is a strong reason for getting more tightly connected to the supply chain in that region,” he says. However, he says IBM is also moving to China to develop more services suppliers to support IBM’s growing global services business. Such services run the gamut, including software development services and labor.

While the purchasing headquarters is formally moving to China, Paterson says he is the only one transferring to Shenzhen from Westchester.