From internal enterprise processes to external business transactions with suppliers, transporters, channels and end-users, Supply-Chain Management is the system of purchasing, producing, and delivering product to customers. Traditionally, Supply-Chain Management has meant factories, assembly lines, warehouses, transportation vehicles, and time sheets. Today's Supply-Chain management is a highly complex, multidimensional problem set with hundreds of thousands of variables for optimization. e-Commerce has changed the very foundations of manufacturing in virtually every industry. Modern-day Supply-Chain Management is the e-Commerce of manufacturing. An Internet-enabled supply chain may have just-in-time delivery, precise inventory visibility, and up-to-the-minute distribution-tracking capabilities. Technology advances have enabled supply chains to become strategic weapons that can help avoid disasters, lower costs, and make money.

Engineers at Intel Corporation have been refining Supply-Chain Management processes to provide greater flexibility in planning, sourcing, making, and moving products globally with greater efficiency and lower costs. The nine papers in this issue of Intel Technology Journal (Volume 9, Issue 3) describe in detail the science of how Intel manages product supply and demand globally. This ability, which transcends science, is the magic, art, and heart of Intel core competency.

Orchestrating product transitions across Intel is challenging yet vital. The first paper describes how Intel engineers address product transitions risk and uncertainty based on a planning approach consisting of three methods; the Product Transition Index (PTI), the Transition Playbook, and the Transition Dashboard. Based on case studies, the PTI is a structured and repeatable method for evaluating the state and impact of market, product, and marketing factors. The Playbook then helps the organization identify and determine how to respond to risks in a rapid and coordinated manner. The Dashboard guides navigation through the Playbook.

The next three papers look at procurement. The second paper is on capacity planning for expensive equipment with very long lead times and high costs. Using a model similar to options instruments used by financial markets, Intel purchases options for capital equipment. Options give Intel the right to purchase an equipment tool in a reduced lead time at a certain pre-determined price. These options were originally developed for lithography suppliers since lithography tool lead times are long while they are subject to multiple changes in product demand.

The third paper is on an open architecture standard called OPENSTAR* for semiconductor test equipment. The OPENSTAR architecture is a standardized infrastructure definition used for combining instrumentation from multiple suppliers into a common platform. The goal of this effort is to leverage standards at the instrument interface level (power, cooling, communication, and device interfacing).

The fourth paper looks at a plan to create a unified global procurement solution. The program, termed “e-Procurement,” focuses on the global end state and targets three focus areas: tools, people, and processes. e-Procurement has a single global Enterprise Resource Planning (ERP) system as its foundation. An Internet negotiations tool was introduced to achieve additional cost savings and negotiation efficiencies.

The next two papers are on manufacturing. At each of its manufacturing plants and across the virtual factory, Intel is constantly adjusting product mix, manufacturing equipment (or tool) requirements, and overall business processes. This has dramatically impacted our ability to meet product demand and capacity utilization within both 200 mm and 300 mm Fab/Sort Manufacturing (FSM) and Assembly/Test Manufacturing (ATM). The fifth paper discusses optimization techniques that help automate different decision-making processes and provide common methodologies to collaborate and discuss optimal solutions. These models have saved Intel a great deal in capital cost over the past five years.

The sixth paper is on new automated data systems and optimization tools based on Linear Programming used to manage multiple divisions and stages of Intel’s supply chain. These tools balance requirements to satisfy demand, achieve inventory targets, and remain within production capacity to reduce costs and satisfy demand across Intel’s supply chain. They have been developed to evolve the planning process and facilitate continuous improvement while maintaining visibility to the logic and data flow. Planning time has decreased dramatically; supply costs have been reduced; and demand satisfaction has improved.

The next two papers are on logistics. The seventh paper describes a new way of optimizing Intel Corporation's supply chain, from factories to customers. The methodology uses statistical methods to characterize the order distributions of customers and the distribution of times to ship products from different points in the supply chain (factories to customers).

The eighth paper is on the RosettaNet* standard based on XML-based protocols to facilitate secure electronic exchange of trading entities over the Internet. Over the past five years, Intel has aggressively pursued utilizing RosettaNet to support its supply chain. The paper reviews the success Intel had in building new business processes using the e-Business infrastructure of RosettaNet. Also, the future of Business-to-Business (B2B) exchanges and the next generation of B2B architecture are discussed.

The final paper looks at using Radio Frequency Identity (RFID) technology in supply-chain operations. Intel’s supply network organization formed a unique collaboration with a major Original Equipment Manufacturing (OEM) customer to run a proof-of-concept experiment utilizing RFID tags in the combined supply chain of Intel’s Malaysian assembly/test facility and the OEM’s Malaysian laptop assembly plant. The paper chronicles this path-finding project from inception to completion and shipping of over 70,000 CPUs to the OEM customer in a four-week period.

In only a few years, the very fundamentals of manufacturing have changed dramatically. Modern-day Supply-Chain Management is the e-Commerce of manufacturing. Technology advances have enabled supply chains to provide greater flexibility in planning, sourcing, making, and delivering products globally with greater efficiency and lower costs. Intel is a star at today's supply-chain optimization and this ability is one of Intel’s key strategic assets.