Intel Supply Chain
Intel Supply Chain characteristics
10 fabrication plants, located in Ireland, Israel and USA
7 Assembly Test factories in Asia and Costa Rica
14 Distribution Centers throughout the world, including
four retail boxing lines
The manufacturing cycle of a typical Intel product includes at
least one round world trip
Intel ships ~1.9 million shipments per year averaging
550 kilos per day
Intel Supply Chain has ~2,500 people in 14 countries.
Supplier Fabrication Plant Assembly Test Boxing, Customer
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The Intel Network
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Intel’s Influence in the Supply Chain
Leader in internet negotiations; used for virtually all freight
contracts and negotiations.
Instrumental in establishing the High Tech Shippers Coalition
as a forum for influencing governmental policies.
Helping to establish direction for RosettaNet proliferation
through leadership in RosettaNet consortium.
An original founder of Technology Asset Protection Association
(TAPA) and active in leadership positions in all geographies.
Transportation Materials & Manufacturing Engineering group
has patented thermo-forming solutions that have saved
millions in freight and packaging costs.
• Intel was ranked number 11 of the “Top 25 Supply
Chain Companies” by AMR Research in 2005.
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Freight Spending and Geo Demand
Q2 Billings Revenue
Q2 Billings Revenue
Imbalance between billings and
consumption drives freight costs 12%
Air cargo represents 78% of 18%
freight spending 51%
59% of freight spends originate 19%
in Asia (~20% from China
3PL’s) Q2 Consumption Revenue
Q2 Consumption Revenue
– Align the “right service / mode” 8%
to the Business Unit needs 26%
– Comprehend total landed costs
in supply chain decisions 33%
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Increase in smaller orders to
more remote locations.
– Security risks
– Delivery reliability
– IT / systems
– Accessibility to tier 2 cities
Intel Global Freight Profile by Weight
Global Freight Profile:
Trade imbalance impacting 3% IntraEurope Eur
costs and delivery reliability. IntraAmericas TransA
la ic 11%
Higher fuel costs passed 1%
through to shippers.
Latin America (LAR)
– LAR sourced primarily via Miami 3PL (84% of 3PL volume)
– Direct shipments to LAR limited to MNC’s only
– Direct shipments expected to increase by 50% ‘05 to ‘06
– Lift capacity remains major issue
– Linearity in uplift capacity (3X demand to supply Sept-Dec)
– Limited landing rights in China
– U-turn requirements for intra-China shipments
– Non-direct flights between Taiwan and China
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Challenge to the Air Cargo Industry
Constantly seek out new ways to improve reliability
– Global consistency with materials handling; i.e. Emerging Markets
– Practice Business Continuity religiously; terror, hurricanes, etc
– Face complexities and challenges as opportunities to get better, not as
immovable barriers that halt progress or raise costs
– Adequate and affordable lift capacity from growth and emerging markets
Cost efficiency and effectiveness
– Segmented services (one solution does not fit our BU needs)
– Fuel efficiency and environmental awareness
– Seamless inter-modal capabilities with customer transparency
– Educate shippers on ways to make your life easier (bid timing, etc)
Work as an industry to create breakthrough innovations,
standards and leverage your collective power.
– Increase collaboration with supply network partners
– Industry associations / leverage your positions government, regulations.
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Intel Supply Chain Vision
Vision: Agile fulfillment capability that is easy for
customers and maximizes shareholder value.
Mission: Increase customer and Intel success by
optimizing supply and demand, and delivering
valued supply chain solutions
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Global Transportation & Logistics
Vision - TransPerfection
“Perfecting the Business of Global Transportation”
Investing in the Evolving a
Growth of our Culture of
Deliver a Supply Chain
Advantage to Intel by:
Right Service at
the Right Cost at
the Right Time
Visible Data for
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Regulations Supply Network Trends – Environmental Scan
Distribution Availability of Logistics Supply
1. Globalization: Growth in emerging markets 1. Air Freight Capacity: Capacity constraints
challenges logistics capabilities, increases impact delivery performance and drive
security risks, and drives up costs. costs up.
2. Inventory Management: Increased requests 2. Fuel: High fuel prices and lack of
for consignment, leaner inventory models, management strategies impact distribution
SKU proliferation. decisions.
3. Network Complexity: Increased outsourced 3. Ocean Port Congestion: Increased ocean
manufacturing, fragmentation of disti channel,
volumes causing long wait times at ocean
direct- and drop-ship models, exponential lane
ports (particularly in China, Japan & West
Regulatory Requirements Technology
1. Security: Challenge network reliability
1. RosettaNet: Enable “plug-and-play”
and shipment integrity (e.g., TSA).
2. Customs: EM challenges & inspection startups and improve data quality.
of cargo on PAX. 2. RFID: Offers benefits for operations
3. Environmental and Packaging: management and security.
Requirements becoming more strict
4. Trucking Regulations: Affecting labor
5. Lithium Ion Batteries: Restrictions
could impact future shipments
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Business Trend Summary-
More intense, not new….
Trend 1: Market and service requirements growing
Trend 2: Supply Chain complexity accelerating
Trend 3: Increased customer expectation:
Trend 4: Getting more difficult to manage
Trend 5: Our growth is in emerging markets
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