Description
Intel has faced increasing gross margin challenges in recent years as it seeks to transform from a personal computer-centric company to a data-centric company. Challenges have included higher costs, lower manufacturing yields, greater inventory obsolescence, and growth in lower margin businesses. Understanding the power and influence within the supply chain, Intel faced the challenge head-on by establishing its “Maximizing Margins” program tasked to deliver 1% of gross margin impact a year for Intel. Since 2014, the effort has delivered 450 margin improvement projects totaling $2.3 billion, including supply improvement initiatives, capacity and factory ramp optimization, external supply negotiations, materials cost reduction, yield and throughput time improvements, and new logistics and reverse logistics offerings. The initiative has transformed Intel into an indispensable partner that is actively driving key supply chain decisions and now delivering greater than 1% of gross margin improvement annually. Presented at the 2019 ASCM Conference--Las Vegas, Nevada.