In 2004, IBM Corp.'s Integrated Supply Chain Group achieved a technological breakthrough by applying its world-class supply-management strategies toward managing its labor pool. Called the Workforce Management Initiative, the strategy saved the company $500 million in its startup phase last year, and is expected to eventually save the company as much as $2.5 billion each year.

Harold Blake, IBM's director of labor optimization says that the goal is to match workers' skills with available opportunities, enabling optimal labor development across all divisions of the company. The three keys to the program are as follows:

1. Link labor to the business strategy Blake had to get general managers to think about the kind of labor that they would need two and three years in the future, as opposed to just one year forecasting, something they were not used to doing. They were also asked to balance labor types for value and flexibility.
2. Create a management system and governance model that demonstrates that the senior leadership believes the initiative is critical to business success.
   General Managers have been given utilization rates and other metrics so that they can better plan workforce investments. Compensation is tied to the metrics.
3. Create a common language to describe the skills and talents of the workforce. Previously, each working group at IBM had their own labels for positions. For example, a "practice leader" in one line of business might be called a "manager" in another. These inconsistencies were eliminated so that human resources could be quickly identified.