Intel Organization: Management, Marketing and Goals

Even with a quality range of products and services, success can bring a company unforeseen consequences. Intel is currently experiencing a shortage of CPUs due to excessive demand for PC chips, which started in 2018. Clients, such as Hewlett Packard, become affected by disparities in inventory, and the origin of capacity is a critical issue (Alspach). While Intel had been hoping to normalize their inventory levels by the end of 2020, the rise of computer usage during COVID has undoubtedly kept the strain at a noticeable level.

New products and processes can often be expensive and take years to develop but are necessary, especially in machinery and electronics. Developments have long-lasting effects in terms of both profits and technology. Years ago, while working on 10nm process technology, Intel realized that the defect statistics were too high to consider it effective (Shilov). Unwilling to scrap their production, Intel put great efforts into improving the 10nm and has seen a 20% increase in performance over the last couple of years.

Modern best practices and social responsibility have led Intel to acquire some of its resources in more ethical ways. Computer and electronics manufacturers use various minerals, some of which are known as ‘conflict minerals’. Such named resources, including tin, titanium, and gold, are often mined in and around the Democratic Republic of Congo in areas controlled by local militia. These minerals’ profits can finance violent conflicts, so many companies and government organizations have formulated plans to source such minerals elsewhere. For over ten years, through its Responsible Minerals Program, Intel has pursued ways to support sustainable mineral suppliers in the region without adding funding to local violence or labor abuses.

Intel has manufacturing plants (or fabs) in China, Israel, Ireland, Malaysia, Vietnam, and the United States. With Asia producing over 80% of the world’s semiconductors, Intel has made it a priority to invest in developing jobs within the United States. For Intel to have a more efficient supply chain, the company wants to make sure that they work closely throughout Intel to ensure they have a strategy that integrates solutions across all levels. Intel recognizes that supply chain management is critical to how their business operates and is always willing to take suggestions and make changes.

Some demands that are essential to Intel are increases in product mixes and volume, shorter delivery times, increased responsiveness to change requests, more efficient and cost-effective performance, etc. Intel partners with the internal business teams to redesign these processes to deliver more efficient information systems. Intel’s IT efforts have helped increase their supply chain responsiveness and productivity while reducing process cycle time and inventory levels.

Intel also recognizes that their supply chain - the combination of people, technology, processes, information, and resources used to make their materials and components into finished goods and services, is vital to their success and critical to how their customers see them as a company. A big part of why Intel decided to restructure its supply chain approach is because they wanted to try to improve internal efficiency by increasing responsiveness. Part of the redesign was to eliminate or add to 15 of the 21 steps they already had in place.

 A significant change they did was redesigning their ERP platform. That change led to a 92% reduction in ERP customizations, a 92% cost reduction for implementing maintenance releases, a 40% reduction in the number of servers, and a 260% increase in capacity by consolidating applications on servers based on the latest “Intel Xeon” processors. With all these changes, Intel expects a return on investment of 124 million USD. Since 2008, Intel’s supply chain transformation has resulted in outstanding savings and improvements in business acceleration, responsiveness, and efficiency. In conclusion, Intel's supply chain has gone through a complete transformation through the years, and it brought them closer to their corporate supply chain vision. With these solutions, they are better equipped to support changes in the market.

Whether the customers are external or internal, customer satisfaction is essential for any business. Satisfaction is linked with responsiveness; not having good customer responsiveness can lead to low customer satisfaction. Intel IT helps retail stores process transactions with limited lag time. Intel knows that transactions are direct revenue to the business, especially in retail, and want the customer to have instant gratification. “In fact, research has found that for each second a website takes to load, the cart abandonment rate climbs by 7%. And according to Google engineers, even a 400-millisecond lag is too long for site visitors.” (Intel. sg, Industry Strategic Challenges). When Intel adds hardware or software, they must prove that the performance rises at a low company cost. To capitalize on increasing data volumes, Intel must deliver fast response time to keep those businesses competitive.

Intel designs and manufactures most of its products in its own factories worldwide, using more than 10,000 suppliers in more than 100 countries. Intel’s strategy of having an abundance of parts, equipment, materials, and services for factories and offices, balances their goal of reducing supplier-related environmental and social footprint. Intel needs to ensure that they provide businesses with the most technologically advanced, cost-effective, resilient, and predictable supply chain to balance the supplier-related environment and the social footprint (CORP).

Intel wants to incorporate supplier ownership in their own sustainability strategies and objectives. Intel wants suppliers to act in responding to requests from their customers. There are four steps that Intel is using for this plan to run smoothly. The first step is to demonstrate an executive commitment to facilitating suppliers in prioritizing the implementation of sustainable social and environmental practices. The second step is to incorporate this into strategic planning and evolution. For suppliers to build into their strategic plans, they must identify where business objectives and sustainability risks and opportunities coincide. The third step is to capture value from the audit process. 

To identify areas for improvement, target root causes, and learn from external advice, suppliers need to rely on information from audits and assessments. The fourth and final step is to communicate challenges and progress proactively. Suppliers use information from the disclosed performance against social and environmental criteria. Using this information, suppliers can reduce the demand for audits and engage other stakeholders.

With this information and four-step process, Intel found that the audits suppliers were often using that they were lagging in the labor section of code compliance. With this information, Intel chose to improve these areas by requiring GRI metrics on human rights and labor so that suppliers can now start tracking their performance and make changes where they see fit.