Analytics Makes Inventory Planning A Lights-Out Activity at Intel Corporation
Intel, which employs more than 100,000 people in over 70 countries around the world and has an annual revenue of $60 billion, implemented a fully automated Multi-Echelon Inventory Optimization (MEIO) based inventory target-setting system managing $1 billion daily in finished goods inventory representing over $40B a year in sales. Algorithm-derived inventory targets at Intel are accepted by planners +99.5 percent of the time and have simultaneously driven higher customer service and lower inventory levels resulting in over $1.3B in gross profit since 2014. In addition, customers are delighted: since MEIO was implemented at all of Intel’s vendor managed inventory hubs in 2012, customer satisfaction has never been higher and Intel has landed in the top-10 of Gartner’s Supply Chain Top-25 every year. Faculty in the department of Business Analytics and Statistics at the University of Tennessee, Knoxville and the supply chain software company Logility also contributed to this project.