SM KM Consignment Model

• Supplier Consignment Training 1 Agenda • Overview of SM KM Consignment Model – Current vs Consignment Model • Consignment Execution Process Flow • Consignment Flow – Roles & Responsibilities 2 Current Model Supplier PO Intel Warehouse PO Kiting Consumption Price Effective Invoice generated Materials shipped PO has price Materials received Supplier sends Invoice Business Process Flow 3 Consignment Model Intel Supplier Kiting Warehouse Scheduling Agreement ( MAR Delivery Report ) / PO PO Consumption Materials shipped Materials received PO’s are “priceless” Payment/ Price Effective Consumption Report generated Supplier downloads Consumption Report - Invoicing is necessary Business Process Flow 4 Consignment Model – Materials and Data Flow Intel Kulim WIP MRP DEMAND LINE SHARE/BLANKET PO SUPPLY-LINE CONFIRMATION KANBAN PULL LINE-READY COMPONENTS Materials Warehouses STOCK STATUS SHIPMENT ALERT CONSOLIDATED SUPPLIER SHIPMENTS Kulim Hub INVENTORY VISIBILITY : Intel’s Inv. Visibility Supplier’s Inv. Visibility COMMODITY MGMT. MONTHLY CAPACITY PLANNING FORECAST SUPPLIER Data Flow Material Flow 5 Consignment Execution Flow 6 Objective • To walk-through the Consignment execution flow at Intel. – Process Flow – System/Tools 7 Aspects of Consignment • • • • • • Roles & Responsibilities – Buyer, Supplier Forecasting/ Replenishment – MAR Delivery Schedule Procurement – Purchase Order ( PO ) Mechanics of Consignment – Consignment Tracking Number – Product Receipts – Consumption/Withdrawal – Payment Consumption & Quota Arrangement Reports 8 Buyer Roles & Responsibilities • • • • • • Scheduling Agreements/Purchase order releases will be issued by the factory based on weekly ARM or PO requirements. Buyer to run Consignment Management Reports and reconcile to Accounts Payable & Supplier (if required) for payment resolution due to pricing error or qty error. For any consigned inventory variance during cycle count, buyer to work with supplier on reconciliation & agree with the inventory number. Inventory adjustment can only be made upon agreement. For any sudden demand increase, buyer will request for inventory replenishment or pull in PO. For EOL or excess consigned inventory, buyer will work supplier for RTV. Scheduling Agreement/ PO issued is priceless. 9 • • • • • • • • • Supplier Roles & Responsibilities For non-ERS Suppliers, need to convert to ERS. To deliver weekly shipment to Intel Kulim per MAR Delivery Schedule report or PO. Shipment need to conform to barcode compliance. • P/N, Qty, Lot#/ Batch#/ Date Code, Expiring Date & PO Shipment need to be attached with Packing List • Qty by Batch # For first 2 weeks’ shipment of consignment implementation, need to be labeled with ‘SM Consignment Material’ on each outer carton. Supplier will run Consignment Management Detail Report on weekly basis and reconcile to Intel Payment Tracker using Intel system Invoice Document number. Suppliers are to send invoices to Intel Malaysia and have the invoice referenced to the Intel system invoice document number as it is a legal requirement to have hardcopy invoices from suppliers. On weekly basis, Supplier will notify the Buyer for any discrepancies in Consignment Details report who in turn will escalate in the following manner: • Pricing Errors - Buyer will investigate and notify Accounts Payable of any changes. • Quantity Errors - Buyer will investigate the system of record and reconcile, then notify Accounts Payable. Consignment Management Reports are “Intel Confidential” and should be treated as such. 10 Forecasting/Replenishment • On a weekly basis, Intel will provide suppliers with a rolling 26 week (ARM) forecast that indicates weekly requirements needed to maintain production at Intel factory. The suppliers will provide written confirmation response