12. greg skrovan


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12. greg skrovan

  1. 1. International Air Cargo Forum and Exposition September 2006 Greg Skrovan Intel Corporation Intel Transportation Supply Chain
  2. 2. The Intel you think of…
  3. 3. The Intel that is a…
  4. 4. Intel Supply Chain <ul><li>Intel Supply Chain characteristics </li></ul><ul><li>10 fabrication plants , located in Ireland, Israel and USA </li></ul><ul><li>7 Assembly Test factories in Asia and Costa Rica </li></ul><ul><li>14 Distribution Centers throughout the world, including four retail boxing lines </li></ul><ul><li>The manufacturing cycle of a typical Intel product includes at least one round world trip </li></ul><ul><li>Intel ships ~ 1.9 million shipments per year averaging 550 kilos per day </li></ul><ul><li>Intel Supply Chain has ~ 2,500 people in 14 countries . </li></ul>Supplier Fabrication Plant Assembly Test Boxing, Storage and Cross docking Customer
  5. 5. The Intel Network Europe America Asia
  6. 6. Intel’s Influence in the Supply Chain <ul><li>Leader in internet negotiations; used for virtually all freight contracts and negotiations. </li></ul><ul><li>Instrumental in establishing the High Tech Shippers Coalition as a forum for influencing governmental policies. </li></ul><ul><li>Helping to establish direction for RosettaNet proliferation through leadership in RosettaNet consortium. </li></ul><ul><li>An original founder of Technology Asset Protection Association (TAPA) and active in leadership positions in all geographies. </li></ul><ul><li>Transportation Materials & Manufacturing Engineering group has patented thermo-forming solutions that have saved millions in freight and packaging costs. </li></ul><ul><li>Intel was ranked number 11 of the “Top 25 Supply Chain Companies” by AMR Research in 2005. </li></ul>
  7. 7. Freight Spending and Geo Demand <ul><li>Imbalance between billings and consumption drives freight costs </li></ul><ul><li>Air cargo represents 78% of freight spending </li></ul><ul><li>59% of freight spends originate in Asia (~20% from China 3PL’s) </li></ul><ul><li>Challenges: </li></ul><ul><ul><li>Align the “right service / mode” to the Business Unit needs </li></ul></ul><ul><ul><li>Comprehend total landed costs in supply chain decisions </li></ul></ul>
  8. 8. Network Complexity <ul><li>Emerging Markets: </li></ul><ul><li>Increase in smaller orders to more remote locations. </li></ul><ul><li>Unstable logistics infrastructures. </li></ul><ul><ul><li>Security risks </li></ul></ul><ul><ul><li>Delivery reliability </li></ul></ul><ul><ul><li>IT / systems </li></ul></ul><ul><ul><li>Accessibility to tier 2 cities </li></ul></ul><ul><li>Global Freight Profile: </li></ul><ul><li>Trade imbalance impacting costs and delivery reliability. </li></ul><ul><li>Higher fuel costs passed through to shippers. </li></ul>Intel Global Freight Profile by Weight 8
  9. 9. Emerging Markets <ul><li>Latin America (LAR) </li></ul><ul><ul><li>LAR sourced primarily via Miami 3PL (84% of 3PL volume) </li></ul></ul><ul><ul><li>Direct shipments to LAR limited to MNC’s only </li></ul></ul><ul><ul><li>Direct shipments expected to increase by 50% ‘05 to ‘06 </li></ul></ul><ul><li>China </li></ul><ul><ul><li>Lift capacity remains major issue </li></ul></ul><ul><ul><ul><li>Linearity in uplift capacity (3X demand to supply Sept-Dec) </li></ul></ul></ul><ul><ul><li>Limited landing rights in China </li></ul></ul><ul><ul><li>U-turn requirements for intra-China shipments </li></ul></ul><ul><ul><li>Non-direct flights between Taiwan and China </li></ul></ul>
  10. 10. Challenge to the Air Cargo Industry <ul><li>Constantly seek out new ways to improve reliability </li></ul><ul><ul><li>Global consistency with materials handling; i.e. Emerging Markets </li></ul></ul><ul><ul><li>Practice Business Continuity religiously; terror, hurricanes, etc </li></ul></ul><ul><ul><li>Face complexities and challenges as opportunities to get better, not as immovable barriers that halt progress or raise costs </li></ul></ul><ul><ul><li>Adequate and affordable lift capacity from growth and emerging markets </li></ul></ul><ul><li>Cost efficiency and effectiveness </li></ul><ul><ul><li>Segmented services (one solution does not fit our BU needs) </li></ul></ul><ul><ul><li>Fuel efficiency and environmental awareness </li></ul></ul><ul><ul><li>Seamless inter-modal capabilities with customer transparency </li></ul></ul><ul><ul><li>Educate shippers on ways to make your life easier (bid timing, etc) </li></ul></ul><ul><li>Work as an industry to create breakthrough innovations, standards and leverage your collective power. </li></ul><ul><ul><li>Increase collaboration with supply network partners </li></ul></ul><ul><ul><li>Industry associations / leverage your positions government, regulations. </li></ul></ul>
  11. 12. Back-up
  12. 13. Intel Supply Chain Vision Mission: Increase customer and Intel success by optimizing supply and demand, and delivering valued supply chain solutions Vision: Agile fulfillment capability that is easy for customers and maximizes shareholder value.
  13. 14. Global Transportation & Logistics Outsourcing Vision - TransPerfection “Perfecting the Business of Global Transportation” Establishing Cutting-Edge Transportation Management Systems Providing the Right Service at the Right Cost at the Right Time Evolving a Culture of Controls Ensuring Clean, Visible Data for Value-Add Information Investing in the Growth of our People Mission: Deliver a Supply Chain Advantage to Intel by:
  14. 15. Supply Network Trends – Environmental Scan D.A.R.T. Board D istribution A vailability R egulations T echnology Distribution Availability of Logistics Supply Regulatory Requirements <ul><li>Air Freight Capacity: Capacity constraints impact delivery performance and drive costs up. </li></ul><ul><li>Fuel: High fuel prices and lack of management strategies impact distribution decisions. </li></ul><ul><li>Ocean Port Congestion: Increased ocean volumes causing long wait times at ocean ports (particularly in China, Japan & West Coast US). </li></ul><ul><li>Security: Challenge network reliability and shipment integrity (e.g., TSA). </li></ul><ul><li>Customs: EM challenges & inspection of cargo on PAX. </li></ul><ul><li>Environmental and Packaging: Requirements becoming more strict </li></ul><ul><li>Trucking Regulations: Affecting labor and profitability. </li></ul><ul><li>Lithium Ion Batteries: Restrictions could impact future shipments </li></ul><ul><li>RosettaNet: Enable “plug-and-play” startups and improve data quality. </li></ul><ul><li>RFID: Offers benefits for operations management and security. </li></ul><ul><li>Globalization: Growth in emerging markets challenges logistics capabilities, increases security risks, and drives up costs. </li></ul><ul><li>Inventory Management: Increased requests for consignment, leaner inventory models, SKU proliferation. </li></ul><ul><li>Network Complexity: Increased outsourced manufacturing, fragmentation of disti channel, direct- and drop-ship models, exponential lane pair growth. </li></ul>Technology
  15. 16. Business Trend Summary- More intense, not new…. <ul><li>Trend 1: Market and service requirements growing </li></ul><ul><li>Trend 2: Supply Chain complexity accelerating </li></ul><ul><li>Trend 3: Increased customer expectation: responsiveness/expectations/power </li></ul><ul><li>Trend 4: Getting more difficult to manage affordability </li></ul><ul><li>Trend 5: Our growth is in emerging markets </li></ul>