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

Supply Chain Insights Global Summit #SCISummit September 2013, p.1TM


Tony RomeroGeneral Manager of the Customer

Fulfillment, Planning and Logistics Group

Intel Corporation

Supply Chain Leadership in Action:

Intel Corporation


Technology Leadership

Extending leadershipthrough innovation

ManufacturingScale

Making significant investments and have the scale to

deliver

Agile and ResponsiveSupply Chain

World-classSupply Chain delivering

what customers want

SocialResponsibility

Caringfor the planetand its people

This decade we will create and extend computing technologyto connect and enrich the lives of every person on earth

3


Intel’s Manufacturing Supply Chain

3,300 Ship To

Locations24 Global

Warehouses

7Assembly/Test

Facilities

920,000 Orders

Per Year5275 SKUs

4M ft2 Manufacturing

Space10,000Suppliers in

100 Countries

9 Fabs in

4 countries

Orchestrating an increasingly complex environment


2005 2011-2013+

Supply Chain Leadership Journey

2007-2010


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


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


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.9TMSupply Chain Insights Global Summit #SCISummit


Supply Chain HorizonHorizon 4 Horizon 3 Horizon 2 Horizon 1

Development Introduction Growth Maturity DeclinePLC Theme Explore Launch Scale Optimize EOL/ExitHorizons Theme "Anticipate & Plan" "Good Enough" "Innovate" "Support" "Harvest"

Business Unit Needs(Demand)

Determine Customer’s

RequirementsDeliver samples

Ready the S.C. toEstablish Market

Presence

Scale the S.C. to Extend Market

Presence

Optimize the Balance between

Cost and Responsiveness

Honor Contractual Obligations

SupplyChain

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


TTM

Affordability

Capability & Reach

Configurable Solutions90%+ of solutions designed from

“off the shelf” SC capabilities

Next Generation Computing

Rapid DeploymentSolutions configured and deployed to

meet business needs in 30 days or less

Be CompetitiveRedefine 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)


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

QuarterlyCurrent 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

QuarterlyPercentage of DNs under SLA; Call to credit based;

95% 96%

5. Inventory Measure of Customer’s on hand inventory QuarterlyPercentage 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)

QuarterlyMonitored as a percent of shipments within given days of TPT.

Status

ILLUSTRATIVE PURPOSES ONLY