Supply Chain

Supply Chain Superstar Headed to Jail

March 30, 2010

"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.

About the Author

Dave Blanchard Blog | Senior Editor

Focus: Supply Chain

Email: [email protected]

Follow on Twitter @supplychainDave

Call: 216-931-9794

Contributing Editor Dave Blanchard provides the IndustryWeek audience his expertise in lean supply chain, reporting on topics from logistics, procurement and inventory management to warehousing and distribution. He also specializes in business finance news and analysis, writing on such topics as corporate finance and tax, cost management, governance, risk and compliance, and budgeting and reporting.

Dave is also the chief editor of Penton Media’s Business Finance and editorial director of Material Handling & Logistics.

With over 25 years of experience, Dave literally wrote the book on supply chain management, Supply Chain Management Best Practices (John Wiley & Sons, 2010), and is a frequent speaker at industry events. Dave is an award-winning journalist and has been twice named one of the nation’s top columnists by the American Society of Business Publications Editors.

Dave received his B.A. in English from Northern Illinois University, and was a high school teacher prior to his joining the publishing industry. He is married and has two daughters.