Intel’s “Just Say Yes” program and dynamic selection of the  right push, pull, or hybrid model

Intel’s business revolves around manufacturing technology and operations. Intel factories turn raw silicon wafers into complex and advanced integrated circuits. These integrated circuits are either delivered to customers as finished goods or subsequently used in the assembly of products such as CPUs, graphics processing units (GPUs), memory units, communication controllers, motherboards, wireless devices, and solid-state drives (SDDs). It holds more than 50% market share for microprocessors.

Source:

Source: ITCandor, 2012

Approximately 30 global warehouses handle the warehousing and delivery to customers of the products, shipping about 1 million PC units per day and fulfilling over 750,000 orders per year (Statistics of January 2012).

Definitely efficient supply chain management is critical to Intel’s success. Intel’s IT plays crucial role in maintaining the supply chain. In 2005 Intel executives received direct feedback from customers about the dissatisfaction in order fulfillment process. In response to this, Intel launched “Just Say Yes” program.

In the beginning of the program, IT data analytics were used to develop awareness of the steps involved in the current processes and create a baseline understanding of the situation. The data points included the number of times a given order changed—an average of six times—and what percentage of orders shipped without changes—only 1 percent. Combining the knowledge from the data analytics with customer feedback, the supply chain organization defined for elements of the goal

•             Improve Intel’s ability to respond quickly and positively to change order requests

•             Respond to customers within 24 hours with a committed dock date (CDD), which entailed committing to a date for product availability and having products available in the warehouse within three days

•             Reduce inventory levels

•             Reduce errors in demand forecasting

Just Say Yes program evolved in later years by setting up new goals and implementing innovative strategies. It led to achieving a better Inventory Management process. Simulation and modeling capabilities helped planners to predict inventory needs and helped to decrease the likelihood of excess inventory. Intel could implement inventory optimization to right-size safety stock buffers across the entire supply chain eliminating complex interdependencies, long lead times, demand uncertainty, and supply volatility. All efforts resulted in reduction of excess inventory and an improvement in customer service levels.

Just say Yes program is explained here by Tony Romero of Intel Corporation
http://www.youtube.com/watch?v=EWiqyf631cg

The presentation can be found here.

http://www.slideshare.net/loracecere/supply-chain-insights-global-summit-2013-leadership-in-action-tony-romero-from-intel-corporation

Another detailed discussion of Intel's inventory management strategies:

Results:

-          50% improvement in ramping up a new manufacturing process,

-          65% shorter lead times

-          50% faster order to delivery

-          300% faster response to customers

-          32% Inventory reduction

-          16-21% productivity increase.

Continuing with the make-to-stock (push) model for traditional CPU product, Intel is implementing pull and hybrid models to support some new product market segments.

Pull model offers the below benefits:

• Responsiveness increases

• Reduced inventory and product obsolescence in new and changing markets that require higher SKU counts

• Customer responsiveness levels can vary

Intel also implementing processes to dynamically select the right push, pull, or hybrid model based on product type and product life cycle.

Primary Source: IT@Intel White Paper: Transforming Intel’s Supply Chain to Meet Market Challenges

http://www.intel.com/content/dam/www/public/us/en/documents/best-practices/transforming-supply-chain-to-meet-market-challenges.pdf