Chain Reactions

Supply Chain Superstar Headed to Jail

"Early last year they were calling him 'The $5 Billion Man' and wondering what he was going to do for an encore," begins an IW article from six years titled "Supply Chain Superstars." The article continues: "This year , he reported more than $7 billion in productivity gains, streamlined efficiency and other cost savings over the course of 2003, and that the company achieved its lowest inventory levels in 30 years."

Pretty impressive numbers, that's for sure. No wonder this guy was being proclaimed a superstar. But who was he? The article continues:

"Bob Moffat's Integrated Supply Chain group within IBM Corp. oversees almost $40 billion of annual spending. The group's activities include everything from raw material procurement to manufacturing, logistics, customer support, order entry and collections for IBM's operations worldwide."

So far, so good. Now comes the money quote (pun not intended... awww, who am I fooling -- of course it's intended):

"'When people work on a supply chain, they work on cost, but it's really how do they take that cost and cash advantage and use it as a competitive advantage or weapon in the marketplace,' says Moffat, a senior vice president who sits on the company's management committee."

What makes that quote so rich with irony is this "where are they now?" update from yesterday's USA TODAY:

"A former senior executive at IBM pleaded guilty Monday to federal charges arising from what prosecutors call the largest insider trading case in hedge fund history. Robert Moffat, 53, of Ridgefield, Conn., pleaded guilty to conspiracy to commit securities fraud and securities fraud, charges that carry a potential penalty of 25 years in prison."

What stands out in the news item is the contention by Moffat's lawyer that "Moffat never engaged in any trading in connection with inside information he gave and he received no money or other financial benefit in return."

Hmmmm. Moffat was the king of return-on-investment when he ran IBM's supply chain, and yet he's claiming that he flushed his career down the toilet and is facing jail time, but he never got any financial benefit in return? Something doesn't add up there.

TAGS: Supply Chain
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