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IBM to link Caterpillar with its suppliers

Caterpillar has brought in IBM to handle systems integration on a major manufacturing collaboration initiative.

Caterpillar, the US-based manufacturer of construction and engineering equipment, plans to use i2 Technologies' supply chain applications to share information with its suppliers. The initiative is part of an effort to reduce inventories and shorten manufacturing times.

Integrating Caterpillar's systems with those of its suppliers is the responsibility of IBM's professional services division. According to Bruce Anderson, managing principal for industrial sector consulting at IBM, supply chain collaboration marks a huge opportunity for services firms.

"When you choose to collaborate, you cannot escape the fact that you've now changed the business process," he said. "Different people have to be notified and different actions triggered, and you have to be able to describe those processes to the middleware so it can send things to the right place."

IBM's WebSphere application server will handle the project's middleware functions. Anderson said such projects might also prompt IBM to change the way WebSphere is priced and designed.

"We're going to have to be flexible, because there's no one-size-fits-all way to set up a collaborative network," Anderson said.

Caterpillar plans to start linking suppliers to its network by the end of the year.

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