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Intel Supply Chain and Operations Strategy

Intel Supply Chain and Operations Strategy

Unit Title: Supply Chain and Operations Strategy

Unit Aims

The aim of this unit is to develop learners’ understanding of supply chain and operations management, including its scope, impact and importance as well as the strategic decisions that need to be made in today’s world of global supply and global markets, taking into account the major competitive drivers. The unit discusses supply chain and operations management practices and approaches in a range of contexts.

Learning Outcome –  The learner will: Assessment Criterion –  The learner can:
1. Understand key operations and supply chain management concepts, theories and strategies 1.1 Evaluate the concepts and principles of operations and supply chain management.
1.2 Critically discuss the key drivers of effective supply chain management.
1.3 Assess how effective operations and supply chain management can enhance competitiveness.
 1.4 Critically evaluate key decisions made by  businesses to improve their supply chain and operations.
1.5 Critically review the application of different  strategic approaches to supply chain and operations management in organisations.
2. Understand performance measurement approaches and techniques.

 

2.1 Assess the relevance of performance measurement within supply chain and operations management.
2.2 Evaluate various financial, non-financial, single and multi-factor performance measures applicable to organisations.
2.3 Evaluate the selection and application of key performance indicators for effective supply chain and operations management.
2.4 Explain how intra and inter-organisational benchmarking can help organisations improve their supply chain and operations management efficiency.

Case Study: Intel

One of the world’s largest manufacturers of computer chips, Intel needs little introduction. However, the company needed to reduce supply chain expenditure significantly after bringing its low-cost “Atom” chip to market. Supply chain costs of around $5.50 per chip were bearable for units selling for $100, but the price of the new chip was a fraction of that, at about $20.

The Supply Chain Cost Reduction Challenge: Somehow, Intel had to reduce the supply chain costs for the Atom chip but had only one area of leverage—inventory.

The chip had to work, so Intel could make no service trade-offs. With each Atom product being a single component, there was also no way to reduce duty payments. Intel had already whittled packaging down to a minimum, and with a high value-to-weight ratio, the chips’ distribution costs could not be pared down any further.

The only option was to try to reduce levels of inventory, which, up to that point, had been kept extremely high to support a nine-week order cycle. The only way Intel could find to make supply chain cost reductions was to bring this cycle time down and therefore reduce inventory.

The Path to Cost Reduction: Intel decided to try what was considered an unlikely supply chain strategy for the semiconductor industry: make to order. The company began with a pilot operation using a manufacturer in Malaysia. Through a process of iteration, they gradually sought out and eliminated supply chain inefficiencies to reduce order cycle time incrementally.

Further improvement initiatives included:

  • Cutting the chip assembly test window from a five-day schedule to a bi-weekly, 2day-long process
  • Introducing a formal S&OP planning process
  • Moving to a vendor-managed inventory model wherever it was possible to do so

 Supply Chain Cost Management Results: Through its incremental approach to cycle time improvement, Intel eventually drove the order cycle time for the Atom chip down from nine weeks to just two. As a result, the company achieved a supply chain cost reduction of more than $4 per unit for the $20 Atom chip—a far more palatable rate than the original figure of $5.50.Order Now from Course ResearchersTask 1 of 1 Management Briefing

Instructions

 You have secured an advisory position with Intel UK division. You will be briefing mid-level managers on performance measurement approaches and techniques. You will be using the case study and further independent research to ensure the briefing is comprehensive. You report will consist of the following:

1. Evaluate the concepts and principles of operations and supply chain management.

2. Critically discuss the key drivers of effective supply chain management.

3. Assess how effective operations and supply chain management can enhance competitiveness.

4. Critically evaluate key decisions made by businesses to improve their supply chain and operations.

5. Critically review the application of different strategic approaches to supply chain and operations management in organisations.

6. Assess the relevance of performance measurement within supply chain and operations management. management.

7. Evaluate various financial, non-financial, single and multi-factor performance measures applicable to organisations such as Intel.

8. Evaluate the selection and application of key performance indicators for effective supply chain and operations management at Intel.

9. Explain how intra and inter-organisational benchmarking can help organisations like Intel to improve their supply chain and operations management efficiency.
(LO1, AC1.1, 1.2, 1.3, 1.4, 1.5 and LO2, AC2.1, 2.2, 2.3, 2.4)

Delivery and Submission
 1x Word file (circa 4500 words excluding TOC, diagrams, references and appendices)

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