How Intel boosted supply chain response times

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Intel is in the middle of a multi-year process of supply chain transformation, which has already produced three times faster response times, Simon Barrett, global logistics strategist, told delegates to the 1-2-1 Supply Chain Excellence Summit last week.

He revealed that for Intel, the key to transformation was in entrenching change at the level of management practice.

The high fixed costs of manufacturing computer chips had initially established focus on keeping the factory running at all costs. But closer inspection of the supply chain, its long lead times, and rapidly evolving product prompted a shift towards demand driven operations.

But Barrett said that management innovations were crucial in supporting the many layers of transformation from the top down.

The firm has implemented some tricky principles, such as scrapping obsolete inventory, moving production closer to the customer and decentralising decisions.

Intel reckons that the changes have already resulted in 32 per cent less inventory as well as a massive boost to response times.

Delegates at the summit, which took place in Birmingham, also heard about O2’s reverse logistics strategy from. Telefonica UK’s Paul Kelley, head of supply chain development at O2. He showed how “closing the loop” with returns processing also required drastic changes in the attitudes and ideas around reverse logistics.

And John Currah, supply chain director of G’s Fresh potato producers and Bassey Duke, group logistics manager of IMI made presentations which lead to group wide discussions on how to optimise supply chain in a changing business landscape.

A team from Wincanton lead a workshop examining whether now is the right time for businesses to implement fundamental change. Some 75 of the participating supply chain leaders then discussed the ideas in groups, and eventually voted that yes, now is the right time to invest in change for the future.

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