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Optimizing Inventory Levels Within Intel's Channel Supply Demand Operations

Author

Listed:
  • Brian Wieland

    (Channel Supply Demand Operations, Intel Corporation, Folsom, California 95630)

  • Pat Mastrantonio

    (Channel Supply Demand Operations, Intel Corporation, Folsom, California 95630)

  • Sean P. Willems

    (School of Management, Boston University, Boston, Massachusetts 02215)

  • Karl G. Kempf

    (Intel Corporation, Chandler, Arizona 85226)

Abstract

Intel's Channel Supply Demand Operations (CSDO) organization is responsible for satisfying the boxed processor demands of Intel's vast customer network of distributors, resellers, dealers, and system integrators. In 2005, CSDO began a multiechelon inventory optimization (MEIO) project to improve its efficiency and effectiveness by optimizing inventory levels and locations across CSDO's end-to-end supply chain. This paper describes the project plan, workflows, and results. One year after implementation, total inventory levels were reduced by more than 11 percent; in addition, service levels of products modeled using the MEIO process were eight points higher than products not modeled using this process. The MEIO process continues to be in place at Intel and has resulted in sustained reductions in inventory levels, average service levels exceeding 90 percent, and more than an order-of-magnitude reduction in the number of expedites.

Suggested Citation

  • Brian Wieland & Pat Mastrantonio & Sean P. Willems & Karl G. Kempf, 2012. "Optimizing Inventory Levels Within Intel's Channel Supply Demand Operations," Interfaces, INFORMS, vol. 42(6), pages 517-527, December.
    • Handle: RePEc:inm:orinte:v:42:y:2012:i:6:p:517-527
    DOI: 10.1287/inte.1120.0637
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    References listed on IDEAS

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    1. John M. Bossert & Sean P. Willems, 2007. "A Periodic-Review Modeling Approach for Guaranteed Service Supply Chains," Interfaces, INFORMS, vol. 37(5), pages 420-436, October.
    2. Stephen C. Graves & Sean P. Willems, 2000. "Optimizing Strategic Safety Stock Placement in Supply Chains," Manufacturing & Service Operations Management, INFORMS, vol. 2(1), pages 68-83, June.
    3. Tian, Feng & Willems, Sean P. & Kempf, Karl G., 2011. "An iterative approach to item-level tactical production and inventory planning," International Journal of Production Economics, Elsevier, vol. 133(1), pages 439-450, September.
    4. Salal Humair & Sean P. Willems, 2011. "TECHNICAL NOTE---Optimizing Strategic Safety Stock Placement in General Acyclic Networks," Operations Research, INFORMS, vol. 59(3), pages 781-787, June.
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    Cited by:

    1. Malte Meistering & Hartmut Stadtler, 2020. "Stabilized-cycle strategy for a multi-item, capacitated, hierarchical production planning problem in rolling schedules," Business Research, Springer;German Academic Association for Business Research, vol. 13(1), pages 3-38, April.
    2. Fernando Bernstein & Yang Li & Kevin Shang, 2016. "A Simple Heuristic for Joint Inventory and Pricing Models with Lead Time and Backorders," Management Science, INFORMS, vol. 62(8), pages 2358-2373, August.
    3. de Kok, Ton & Grob, Christopher & Laumanns, Marco & Minner, Stefan & Rambau, Jörg & Schade, Konrad, 2018. "A typology and literature review on stochastic multi-echelon inventory models," European Journal of Operational Research, Elsevier, vol. 269(3), pages 955-983.
    4. Matthew P. Manary & Brian Wieland & Sean P. Willems & Karl G. Kempf, 2019. "Analytics Makes Inventory Planning a Lights-Out Activity at Intel Corporation," Interfaces, INFORMS, vol. 49(1), pages 52-63, January.
    5. Dennis Arnow & Sean P. Willems, 2017. "Practice Summary: Intel Calculates the Right Service Level for Its Products," Interfaces, INFORMS, vol. 47(4), pages 362-365, August.
    6. Gihan S. Edirisinghe & Thamer Almutairi, 2023. "Multi-Echelon Inventory Optimization for Practitioners: a Predictive Global Sensitivity Analysis Approach," SN Operations Research Forum, Springer, vol. 4(2), pages 1-20, June.
    7. Eruguz, Ayse Sena & Sahin, Evren & Jemai, Zied & Dallery, Yves, 2016. "A comprehensive survey of guaranteed-service models for multi-echelon inventory optimization," International Journal of Production Economics, Elsevier, vol. 172(C), pages 110-125.
    8. Tao Lu & Ying‐Ju Chen & Brian Tomlin & Yimin Wang, 2019. "Selling Co‐Products through a Distributor: The Impact on Product Line Design," Production and Operations Management, Production and Operations Management Society, vol. 28(4), pages 1010-1032, April.
    9. Ghadimi, Foad & Aouam, Tarik, 2021. "Planning capacity and safety stocks in a serial production–distribution system with multiple products," European Journal of Operational Research, Elsevier, vol. 289(2), pages 533-552.

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