Download - Supply Chain Insights Global Summit 2013 - Leadership in Action - Tony Romero from Intel Corporation
Supply Chain Insights Global Summit #SCISummit September 2013, p.1TM
Supply Chain Insights Global Summit #SCISummit September 2013, p.2TM
Tony RomeroGeneral Manager of the Customer
Fulfillment, Planning and Logistics Group
Intel Corporation
Supply Chain Leadership in Action:
Intel Corporation
Supply Chain Insights Global Summit #SCISummit September 2013, p.3TM
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
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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
Supply Chain Insights Global Summit #SCISummit September 2013, p.5TM
2005 2011-2013+
Supply Chain Leadership Journey
2007-2010
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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
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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
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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
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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
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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)
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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