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Supply Chain Insights Global Summit 2013 - Leadership in Action - Tony Romero from Intel Corporation

Supply Chain Insights Global Summit 2013 - Leadership in Action - Tony Romero from Intel Corporation



Supply Chain Leadership in Action: Intel Corporation ...

Supply Chain Leadership in Action: Intel Corporation

Intel is an industry leader in supply chain planning, customer fulfillment, logistics and the building of supply chain talent. Tony will share insights on the building of global processes to sense and respond to customer needs and improve supply chain resiliency.

Tony Romero, General Manager of the Customer Fulfillment, Planning and Logistics Group (CPLG) for Intel Corporation.



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  • Technology LeadershipLeading Manufacturer of Computer, Networking & Communications Products9 Fabs in 4 countries; 1.1Bu+ HK+MG shipped; 14 nm fabs ramping80,000 technical roles, 10,400 Masters in Science, 5,200 PhD’s, 4,000 MBA’sManufacturing Scale166 Sites and 579 Buildings in 63 Countries$54B in Annual Revenues from Customers in Over 120 CountriesOver 100,000 EmployeesAgile and Responsive Supply ChainWorld class supply chain: Gartner rating from 16 to 11 to 7 to 5 in 2013Best in industry have 77% Customer Delight, semiconductor average is 53%Excellence in Supply Chain Continuity during global disruptionsSocial ResponsibilityRanked #46 on Fortune’s 100 Best Companies to Work For ListInvests $100 Million Each Year in Education Across More than 70 CountriesThe Single-Largest Voluntary Purchaser of Green Power in the United StatesMore than One Million Hours of Volunteer Service in Our Communities in 2011
  • Intel’s Technology and Manufacturing Supply Chain is vast and reflects the SC complexity of a global presence.On the Sourcing and Procurement side of the business, we are managing upwards of 10,000 suppliers across 100 countriesOur Technology and Manufacturing Engineering team builds and ramps our fab network consisting of 9 fab and 7 assembly test facilities.All of this SC infrastructure churns out over 5K unique products that we ship to over 3K locations annually.From a volume perspective, we are managing upwards of 1 million orders a year with nearly 3M unique shipments.So orchestrating the complexities of this is no small challenge and it’s never been more important to leverage these collective assets as a competitive advantage for Intel.
  • Internal Alignment (Partnership) Inward facing alignment and partnership Focused on addresses lateral process across different functional group within Intel – SMG, MMBP, CPLG, Fab/ATM Network Be more efficient Result: Got more efficient, but lacked strong external results, not world class recognized supply chainOutward Facing Responsiveness (Just Say Yes Campaign) Customer Responsiveness and Delivery Performance Created strong common goals across function business organizations Focused on customer perception of performance – responsiveness and delivery performance Was a turning point for Supply Chain improvements Gained global recognition for supply chain improvements Gartner #16DetailsJUST SAY YESExcellence in the supply chain is not just a nice-to-have feature, it's critical to have it, especially in semiconductormanufacturing where complexity is part and parcel of the process. Unfortunately, such a lofty state wasn't always the caseforIntel.From Intel’s perspective, customer responsiveness, inventory optimization and asset utilization are the three components of a top-notch supply chain. An unwanted situation is for these elements, or the people managing them, to compete rather than work together.. That was sometimes prior to our Just Say Yes supply chain transformation. Take responsiveness to customer demand, for example. We built a metric called "percent-yes-in-one-day," While not a standard supply chain metric, it was designed to track change requests: customer demands to alter product orders in some manner, cancellations, swaps, whatever. The metric reflects "how many of those change-order requests that we said 'yes' to within one day." Not many, as it turned out. Something else - something internal - had to change.In 2007, we instituted a SC program called "Just Say Yes." It was the beginning of radical shift in the supply chain paradigm at the company. And now? Customer responsiveness has tripled, order fulfillment lead-times have improved by 25 percent and delivery to customer dock "has gone up by several tens of units and is at world-class levels now."The most important thing, is that the results occurred while decreasing inventory 45 percent from peak levels set in 2006. "It's a pretty amazing accomplishment. It's been a long and difficult journey. The paradigm shift radically affects the way we think about the supply chain.“ -Supply Chain Brain, May 7, 2010Next focus is cost, speed, agility and new market supply chain excellence
  • Order Fulfillment Lead Time = From the time a customer places an order until the time it hits their doc.Cycle Time – The time it takes us to move material from Customer Forecast (initial Demand signal) to Customer Dock (Delivery)Delivery Performance AMB – Perfect Order = Arrives on the right date, in the right quantity, with quality you expect (paperwork, damage, labels)
  • The great supply chains are customer-driven or demand-driven. It’s about understanding what people need and being able to respond faster with the right mix of products, the right cost, the right quality, to the right locations around the world. This fits very well with Intel’s move to providing great user experiences as well as great products.

Supply Chain Insights Global Summit 2013 - Leadership in Action - Tony Romero from Intel Corporation Supply Chain Insights Global Summit 2013 - Leadership in Action - Tony Romero from Intel Corporation Presentation Transcript

  • Supply Chain Insights Global Summit #SCISummit September 2013, p.1TM
  • Supply Chain Insights Global Summit #SCISummit September 2013, p.2TM
  • Supply Chain Insights Global Summit #SCISummit September 2013, p.3TM Technology Leadership Extending leadership through innovation Manufacturing Scale Making significant investments and have the scale to deliver Agile and Responsive Supply Chain World-class Supply Chain delivering what customers want Social Responsibility Caring for the planet and its people This decade we will create and extend computing technology to connect and enrich the lives of every person on earth 3
  • Supply Chain Insights Global Summit #SCISummit September 2013, p.4TM Intel’s Manufacturing Supply Chain 3,300 Ship To Locations 24 Global Warehouses 7 Assembly/Test Facilities 920,000 Orders Per Year5275 SKUs 4M ft2 Manufacturing Space10,000 Suppliers in 100 Countries 9 Fabs in 4 countries Orchestrating an increasingly complex environment
  • Supply Chain Insights Global Summit #SCISummit September 2013, p.5TM 2005 2011-2013+ Supply Chain Leadership Journey 2007-2010
  • Supply Chain Insights Global Summit #SCISummit September 2013, p.6TM Strong Results in Core PC Business Source: Intel Avg. Lead Time Days 2008 2012 75% OFLT PERFORMANCE RESPONSIVENESS 30% DELIVERY PERFORMANCE 2008 2012 RELIABILITY Perfect Order % AGILITY 50% CYCLE TIME
  • Supply Chain Insights Global Summit #SCISummit September 2013, p.7TM Evolving to Win New Business • Deep Customer Understanding and Business Unit Engagement • Matching Supply Chain investment to business needs and maturity • Modular, configurable Supply Chain solutions enabling TTM and reach
  • Supply Chain Insights Global Summit #SCISummit September 2013, p.8TM In Closing… • Supply Chain leadership both a commitment and a journey • Metrics driven approach created world class Supply Chain • New markets are requiring configurable, customizable solutions with the ability to scale • Great supply chains are demand-driven
  • Supply Chain Insights Global Summit #SCISummit September 2013, p.9TM September 2013, p.9TM Supply Chain Insights Global Summit #SCISummit
  • Supply Chain Insights Global Summit #SCISummit September 2013, p.10TM Supply Chain Horizon Horizon 4 Horizon 3 Horizon 2 Horizon 1 Development Introduction Growth Maturity Decline PLC Theme Explore Launch Scale Optimize EOL/Exit Horizons Theme "Anticipate & Plan" "Good Enough" "Innovate" "Support" "Harvest" Business Unit Needs (Demand) Determine Customer’s Requirements Deliver samples Ready the S.C. to Establish Market Presence Scale the S.C. to Extend Market Presence Optimize the Balance between Cost and Responsiveness Honor Contractual Obligations Supply Chain Response Enable TTM and “path to profitability” in S.C. requirements Build New Capability (Prime the Inv. Pipeline; Logistics infrastructure in place) Initiate the Feedback Loop via R.L. Expand Capability to new regions, products/inventory, customers Deliver Sustaining S.C. infrastructure (logistics, inv., planning, etc.) Enable EOL Minimize Scrap Risk Cost Reduction Opps Network Design Contract T&Cs SKU/Inventory Mgt Warr/Returns Model 3PL & Depot Procurement Process Set Up for Cost & Controls IT Systems: B2B & Planning Cost Optimization: • Freight • Warehouse • Inventory • People • Systems Apply Key Learnings to Horizon 4 Projects Scale Back Capability Disinvest HC dedicated to Optimization TTM Cost Optimization
  • Supply Chain Insights Global Summit #SCISummit September 2013, p.11TM TTM Affordability Capability & Reach Configurable Solutions 90%+ of solutions designed from “off the shelf” SC capabilities Next Generation Computing Rapid Deployment Solutions configured and deployed to meet business needs in 30 days or less Be Competitive Redefine Si/SOC affordability model using ESPX as a lead vehicle; drive learnings back into “Core” New capabilities: • X-org external manufacturing option/model(s) • Modular (cloud) B2B,B2C ERP connectivity solutions • Multi-element fulfillment (FG, S/W, services on one PO) New capabilities: • Active benchmarking intelligence, data & metrics • End-to-end SoC/Foundry SC cost models/targets • Inventory, planning models/tools New Capabilities: • Flexible resource model w/o adding h/c • MM/BOM, CMF set up (days) • Product classification ; import, export licensing (GTT, weeks)
  • Supply Chain Insights Global Summit #SCISummit September 2013, p.12TM Customer Value Metrics Name Description Freq. Calculation Target Performance 1. Hub Utilization Measure of Customer’s use of Intel’s VMI Hub service Monthly / Quarterly Percent of Customer CPU shipments shipped through VMI 60% 52% 2. Allocation Utilization Measure of short term forecast to actual shipments Quarterly Current week (w) shipments versus previous week (w-1) ending allocation 80% 85% 3. Perfect Order Measure of Intel’s order process performance – 3 components Monthly / Quarterly Weighted average of 3 PO components 78% 79% On Time (40%) Measure of Intel’s ability to meet shipment commitments Monthly / Quarterly Intel committed shipment date based calculation. 98% 98% Quality (20%) Quality based measure of Intel’s ability to meet shipment quality requirements Monthly / Quarterly # of issues divided by DN line items X 1mln 99.8% 99.65% Response to Forecast (40%) Measure of Intel’s ability to respond to Customer demand submissions (supply linearity + supply availability) Monthly / Quarterly Percentage of skus with acceptable response (90%+) over 8 week horizon. 70% 70.5% 4. RMA Measure of Intel’s timely response to RMA requests Quarterly Percentage of DNs under SLA; Call to credit based; 95% 96% 5. Inventory Measure of Customer’s on hand inventory Quarterly Percentage calculation of avg IOH to Quarter shipments, Cost of IOH 10% (+ $ component) 10.9% 6. TPT Measure of impact of Intel service levels (Hub + Logistics) Quarterly Monitored as a percent of shipments within given days of TPT. Status ILLUSTRATIVE PURPOSES ONLY