Supply chain forecasting is a tool used in decision making by most businesses to assist in planning, analyze product demand, consumer purchasing patterns, and future economic trends. Forecasting predicts future business outcomes based on events of the past as well as management insights. On the other hand, supply chain planning is an asset coordinated process that optimizes delivery of both services, information, and goods from the supplier to the consumer subsequently balancing demand and supply in the process. The phenomenon further enables companies to create uncertainty scenarios that are in tandem with real-time demand commitments in forecasts development (Blanchard, 2010). As such, these tenets will be discussed in accordance to how they relate to the Intel Corporation; an American multinational corporation and technology company.
Figure 1: The SIPOC Business Model retrieved from https://www.google.com/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0ahUKEwitmpbG5tfWAhUECBoKHWBnCVwQjRwIBw&url=https%3A%2F%2Fwww.edrawsoft.com%2Fsipoc-process-sixsigma.php&psig=AOvVaw2QIjzzmPNo1qVqY7COiUZa&ust=1507235125170048
Delegate your assignment to our experts and they will do the rest.
Intel is an innovative company founded on 18 th July 1968 that manufactures an array of products including Bluetooth chipsets, flash memory, microprocessors, mobile phones, CPUs, among others. The company’s revenue in 2014 was estimated to be 55.870 billion dollars (Intel, 2014). As illustrated in the figure above, Intel Corporation makes use of the SIPOC model which stands for Suppliers, Inputs, Process, Outputs, and Customer. Suppliers include Advantest Corporation, Daewon Semiconductor Packaging Industrial Co., Murata Manufacturing Co., among others. Inputs incorporate the 106, 700 employees inclusive of 12,000 software engineers in different manufacturing sites around the globe. The Intel process includes factory certification and overview, product identification and unit-level traceability, copy exactly from virtual factories, manufacturability design, nonconforming-product control, and environmental citizenship. Some of the Intel outputs or products include the various arrays of Intel Core TM , value processors (Celeron and Pentium), different arrays of Intel Xeon, as well as various arrays of Intel Atom TM, Regarding customers, Intel controls 80% of the microprocessor market share, (Subhadarshini, 2016).
Intel’s supply chain strategy incorporates the Just Say Yes Program of 2008-2010 which improves customer responsiveness through automation of processes and implementation of new supply chain performance metrics. Through the Intel IT team, the company’s supply chain also adopts the standard ERP system which has optimized transportation and customized processes. Additionally, Intel has automated the whole supply chain subsequently reducing both inefficiencies and SCM costs. Moreover, the chain has an automated and dynamic Order Management System that has enabled the company to significantly segment demand signal (Hensley et al., 2012).
Despite the remarkable success of the company’s chain, it is faced by major global challenges. A continuous proliferation of services and goods globally such as smartphones, embedded technologies, tablets, and Ultrabook TM devices present significant challenges to Intel’s supply chain. Also, strict government regulations in Asian countries especially China present unique challenges such as employee strikes that disrupt the supply chain. Natural disasters such as Tsunamis and earthquakes disrupt the supply chain in terms of delayed deliveries. Environmental sustainability issues such as air pollution in China or water pollution in Vietnam call for reactive responses in terms of social responsibility which affects normal business functions and subsequently the supply chain. Finally, the Intel supply chain is significantly affected by emerging markets across the globe through increased customer reach consequently affecting the agility and responsiveness of the chain (Hensley et al., 2012).
Aggregate planning is a fundamental process through which an organization determines optimal levels of production, capacity, inventory, subcontracting, pricing, and stockout over a specific time horizon. Aggregate planning is particularly important to Intel as it ensures satisfaction of demand while maximizing profits beneficial to both the company and its partners. Additionally, aggregate planning benefits Intel and its partners in terms of solving aggregate decisions such as the company’s monthly total production level. This phenomenon is particularly effective within an intermediate time frame of between three to eighteen months thereby optimally utilizing available company facilities. Aggregate planning serves as an operational blueprint through which it establishes parameters used in short-term chain distribution and production decisions. Aggregate planning is equally important to Intel in altering the capacity allocations of its supply chain as well as changing supply contracts thereby increasing responsiveness and agility of the chain, (Chopra & Meindl, 2016).
Demand forecasting is particularly important in the push and pull processes of the supply chain in anticipation of the customer demand. Fundamentally, both Intel and its suppliers require demand forecasting as a component of their strategy to determine and measure their production and inventory levels. In effect, when demand forecasting is collaboratively incorporated in all stages of the supply chain through the Intel IT, the chain becomes significantly effective and responsive subsequently reducing the risks of excess inventory. Moreover, demand forecasting comes in-handy for Intel’s supply chain strategy as it curbs the likelihood of underproducing or overproducing given the narrow sales window (Chopra & Meindl, 2016).
Pricing promotion is a pivotal concept and tool when a company wants to change the demand for its product. Intel controls the lion's share of the semiconductor market based on its crucial pricing strategies. Intel strategically waits for its competitors to set a base price for similar products then through promotion pricing, the company sets a lower price which increases the demand for its products. Additionally, Intel maintains reasonable prices for its products to maintain customer loyalty thereby increasing demand. For products such as chips, Intel has set a premium price which is aimed at targeting consumers opting for high-end models thus creating a specific demand in this respect. In addition, price promotions such as volume discounts are used by bulk manufacturing companies such as Intel to give discounts based on the quantity of products purchased which subsequently increases demand and maintains customer loyalty. According to Intel (2014), Intel makes use of digital advertisements through phones and other electronic devices where consumers are made aware of offers and price cuts. Retrospectively, the phenomenon causes consumers to visit the retail stores to purchase the products, and in the process, they buy other products subsequently increasing demand.
References
Blanchard, D. (2010). Supply Chain Management Best Practices (2nd ed.). Hoboken, NJ: Wiley
Chopra, S., & Meindl, P. (2016). Supply Chain Management: Strategy, Planning, and Operation (6th ed.). Upper Saddle River, NJ: Prentice-Hall
Figure 1: The SIPOC Business Model retrieved from https://www.google.com/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0ahUKEwitmpbG5tfWAhUECBoKHWBnCVwQjRwIBw&url=https%3A%2F%2Fwww.edrawsoft.com%2Fsipoc-process-sixsigma.php&psig=AOvVaw2QIjzzmPNo1qVqY7COiUZa&ust=1507235125170048
Hensley, R., Muthusami, K., Quah, K.C., Wu, J., & Zinsli, M. (2012). Transforming Intel’s Supply Chain to Meet Market Challenges. Intel IT. Retrieved from https://www3.intel.com/content/dam/www/public/us/en/documents/best-practices/transforming-supply-chain-to-meet-market-challenges.pdf
Intel. (2014). The Retailers’ Guide to Creating Personalized Shopping Experiences. Intel, 2014 Guide to Intel Retail Solutions. Retrieved from https://www.intel.com/content/dam/www/public/us/en/documents/guides/retailers-creating-personalized-shopping-experiences-guide.pdf
Subhadarshini, S. (2016). Intel - Business Model. Slideshare. Retrieved from https://www.slideshare.net/SonaliSubhadarshini/intel-business-model
