driving supply chain excellence helping intel’s customers go faster stuart pann intel corporation...

Driving Supply Chain Excellence

Helping Intel’s Customers Go Faster

Stuart PannIntel Corporation

Vice President, Technology and Manufacturing Group,General Manager, Customer Fulfillment, Planning and

Logistics

Microsoft Hi-Tech Summit Oct 20072

Extending Intel Architecture …

Notebook Desktop Server

PLATFORMS

PerformancePerformance/Watt

User Valued Features

Common Element: The Internet

MID

Ultra Low PowerSufficient Performance

Extreme Integration

CEUltra

Low-Cost PC


CE (Internet

)

Mobile Internet Device

Ultra Low Cost

PC

Common Elements: Run the Internet, Low Power, Low Cost

~$10B ~$10B ~$10B

Market Opportunity

2011 Unit TAM > 100’s Million Units

Source: Intel Forecast


OEM/Disti/Retail

Su

pp

lier

’s S

up

pli

er

Cu

sto

mer

’s C

ust

om

er

DistributorFab SortAssembly

Test

UnitsDieWafers Units

ODMManufacturer

Dealerassembly

Capital EquipmentSupplier

Indirect MaterialSupplier

Distributor

Intel’s Supply Network


OEM/Disti/Retail

Su

pp

lier

’s S

up

pli

er

Cu

sto

mer

’s C

ust

om

er

DistributorFab SortAssembly

Test

UnitsDieWafers Units

ContractManufacturer

OEMFabricator

Capital EquipmentSupplier

Indirect MaterialSupplier

Distributor

Intel’s Supply Network

17 Fabs

6 Assembly / Test sites

100,000 Products

95,000 Unique Customers

70,000 Genuine Intel Dealers

270 New Product Versions


RESPONSIVENESS Critical for an Agile Supply Chain

and to respond to changing market dynamics


Why is Responsiveness Important…

Custom

ers

overs

tate

orders

We try to

“shape the

demand”

We

pla

n t

o

ord

ers

Customers change orders

We re

act to

last m

inute

changes

• Inventory costs• Stock-out costs• Responsiveness

• F/S & A/T utilization• Planning HC

S/D Performance

The Change Orders The cycle

0

5

10

15M

Requested

9+ weeks

5-8weeks

0-4weeks

14M

Accomodated

7M

Weekly volume

>9

Weeks from shipment

5-80-4

73%

22%

5%


BLUE DOT: ATM Build Signal

(Mix of Family/Sku Level)

Key decision points in manufacturing

F/S A/T Finish

ADI/TRDI CWSFGI

Hub

Hub

Boxing site

AGGREGATED HUB FORECAST

REPLENISHMENT ORDERS **Finish & Ship signal**

~9-16 wks ~2 wks 1 day ~1 wk

JUDGED DEMAND + INVENTORY TGTS Signal to start Wafers

JD + INVTRY TGTS For Materials & ATM Capacity

At Forecast Item level

GREEN DOT:CW/SFGI Build Signal

(Sku Level)

Red DOT: Fab Build Signal(Family Level)


Forecast Accuracy is key but hard

Principles of Forecasting– Forecasts are usually wrong– Aggregation improves accuracy– Longer horizons have lower accuracy– The best supply chains have the fastest responsiveness

Rome 357 A.D.

The Roman Emperor Constantine issued an edict forbidding anyone “to consult a soothsayer, a mathematician or a forecaster… May curiosity to foretell the future be silenced forever”


Applying semiconductor manufacturing techniques to the supply chain

Simple and highly visible metrics Cycle time reduction Pareto analysis Yield curves

Complemented by investments in tools and people


Customer Requests

PastMarket is short capacity…

Current/Future Market is over capacity…

What do you want? I can sell what I get… I want volume

I want what sold last week… I want flexibility

When do you want it? Tell me when I can get it. Today.

What does reliability mean?

Do what you told me you would do so I can plan

Make sure you have what I need tomorrow

What does collaboration mean?

I have a department dedicated to constrained

suppliers

I can get what I need from multiple suppliers

Past vs. Current/Future: The Market


Past vs Future: The Metrics

Manufacturing Metrics Past Future

OutputOutput MaxRamp Max

Flexibility: Able to shift among

families/SKUs

Costs Capital Capital and Inventory

ScheduleMetrics

Meet “Commit”Flexible ResponseInventory Ranges

Factory Focus Max YieldCost of Complexity

Cycle TimeMax Yield


The programs to implement change

Say “Yes”

Respond to customer requests in 1 business day

Commits toCustomers

Matching Real

Orders With Real Demand

Customer Planning Reengineering (CPR) Change fulfillment from selling capacity to building what customers will buy. Achieve

market standards for availability, responsiveness, service, and staffing as measured by “say yes with less inventory.”

Factory Responsiveness

Real time schedulingReplenishment

Aggressive Inventory Management

Computing Infrastructure – Standards, DSS, Integration


Several of our major initiatives need quick End-to-End Business integration with customers, supply chain partners and suppliers.

Huge opportunity to harness richer data and knowledge across the supply chain

Focus Needed – Products that enable quick End-to-End Business Network

Integration– Open standards and connectivity across different

enterprise systems

B2B Collaboration and Connectivity


Data Flow

Physical Flow

Many transactions & data exchanges are manual today

Intel PDC Hub Customer

Planners Analysts

WH Transfers• 2x wkly• Manual in SAP

Forecast• Weekly• Via excel

Order• Daily• Via excel

Replenishment Signal• Manual calcs via excel• Manual signal

Backlog

Hub Inventory Management• Manual via excel

Inventory• Daily• Via excel

Hubs need to be setup Customer site by site deployments

Factories and inventory readiness

Factory

Demand

Inventory

As Is


Data Flow

Physical Flow

Transactions & data exchanges automated

Intel PDC Hub Customer

Planners

Customer Analysts

Forecast• Weekly via B2B• SAP SCM

Order• Daily• Via B2B

Replenishment Signal• Automated calcs• Via SAP SCM

Demand Signal• Via SAP SCM & DSS• Allocations/Assurance

Hub Operations

Inventory• Via B2B into SAP SCM

Hubs setup Customers deployed

Factories ready

Factory

Demand

To Be

Inventory Management


Computing Infrastructure – Coupled with Business Processes

Bill of Materials (BOM)

Product DataItem & Characteristics

Planning Operational Data

Product Create & Maintain App

TMG ApplicationsTMG Applications

TMG ApplicationsPlanningApplications

TMG ApplicationsTMG ApplicationsFactory & Enterprise

Applications

Solvers

Data

Key Attributes:Single point of data entry

Single version of the “truth”Common nomenclature

Easy access to informationHigh levels of data quality


Enterprise Intel Databases

AssemblyFab Sort Test DistributionEquipment& MaterialsSuppliers

Global Distributed Data Bases

Transparent data pipeline across the Supply Chain critical to decision making and agility

Microsoft Hi-Tech Summit Oct 200719Intel is a registered trademark of Intel Corporation or its subsidiaries in the United States and other countries.

0%10%

20%30%

40%50%60%

70%80%

90%100%

858 860 1260 1262 1264 1266Forecast

% W

ind

ow

s

0

50

100

150

200

250

To

tal

Win

do

ws S

erv

ers

% of Servers Running Windows Total Windows Servers

Win/IA Server OS Penetration by Process Technology

Mission Critical Computing: Intel Runs on IA

Intel Architecture / Microsoft OS backbone well proven to run high volume manufacturing


Dashboards

Change Control

Systems

Intel Knowledge Management & Collaboration Strategy based on SharePoint

Knowledgecapture templates

Customized Workflows

Navigate contentrepositories

Secure andSearchable

Codify UserBiz process

Embed in internal user orgs

Globally distributedMfg content

SpecsOthers …


Enlisting the organization

People are the key to successClear MetricsTransition Change ManagementWorldwide communication


The Results

Oct

-06

Nov-0

6Dec

-06

Jan-

07Feb

-07

Mar

-07

Apr-0

7M

ay-0

7Ju

n-07

Jul-0

7Aug

-07

Sep-0

7

Responsiveness

Res

po

ns

iven

es

s

Responsiveness Improvement

Sep-0

6

Oct-06

Nov-0

6

Dec-0

6

Jan-

07

Feb-0

7

Mar

-07

Apr-0

7

May

-07

Jun-

07

Jul-0

7

Aug-0

7

Sep-0

7

Oct-07

S1

% A

chie

vin

g D

eliv

ery

Dat

e T

arg

et

Delivery Performance

- Improved responsiveness to customer requests

- Improved delivery performance

- Reduced inventory levels last quarter by 600M$

- Kept headcount flat- And drove organizational

health survey scores above Intel averages


Changing the way we workThe Intel office pilot

Objective: Create new office environments which are more conducive to the way we work– Create open, collaboration and community spaces– More privacy options and closed conference rooms– Get rid of underutilized office space – increase interaction and energy levels


Flex Zone


Summary

Focus on a few key metrics that can be use to enlist a worldwide organization

Apply techniques from manufacturing to the entire supply chain

Data standards are key to integration and scale

Invest in the people

driving supply chain excellence helping intel’s customers go faster stuart pann intel corporation...

Documents

microsoft hitech summit

intel forecast slide

logistics slide

lowcost pc slide

intels customers

forecast accuracy

unique customers

change orders