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Entries in manufacturing (2)

Wednesday
04Nov2009

Intel slashes logistics costs by 80% for their new Atom chips

Intel's new Atom chip costs one fifth the cost from Intel's other chips and required a new supply chain design with substantially reduced costs. They achieved this by revaluating every assumption and focusing on ways to reduce inventory levels. 

For its traditional chips, Intel operated on a nine-week order cycle time with with many order changes from their customers which led to higher inventory levels and sub optimized factories.  Intel focused on shifting to a make-to-order model with firm orders accepted and then delivered in two weeks instead of nine.

One of the challenges that Intel faced with this paradigm shift was overcoming the instilled industry perceptions about the make-to-order model.  With the success of this initiative, Intel is now looking at implementing the new approach to the traditional chip's supply chain.

http://www.scdigest.com/ASSETS/ON_TARGET/09-11-04-3.PHP?CID=2911

Thursday
16Jul2009

Lessons learned from Boeing’s Dreamliner Sourcing Problems

 

I read a recent from Adrian Gonzalez about not only the lessons learned from the Boeing 787 Dreamliner program, but discusses some of the supply chain capacity issues that we may experience.

Starting in 2007, Boeing experienced a shortage of nuts and bolts used to assemble the Dreamliner and the root cause of the problem was the reduction of fastener capacity in the aerospace industry following September 11, 2001.  The lesson learned is that it is easier to cut capacity and takes time to add it back, an implication for our current situation since as the economy recovers, manufacturers may face a similar issue.

Another interesting learning point relates to Boeing’s recent acquisition of Vought’s Aircraft Industries'South Carolina facility where Vought builds the rear fuselage and tail-cone sections of the Boeing’s 787 Dreamliner airplane. Did Boeing outsource too much for the Dreamliner program and what is the right balance between outsourcing and maintaining operations in house? This is a change in direction and Boeing must desire more direct control over critical sourcing.

http://logisticsviewpoints.com/2009/07/13/boeings-787-dreamliner-supply-chain-lessons-and-questions/