The field of digital technologies has developed significantly, and high consumer demand in this industry determines the need to maintain competent and sustainable supply chains. As an example, the Intel Corporation will be considered based on its logistics strategy and principles of interaction with the target audience. The ingredient branding tactics used by the company make it possible to popularize Intel products and ensure stable sales of computer components. A comparison with another global corporation may allow identifying the unique features of Intel’s supply chain management system. Demand for the company’s products is largely determined by price promotions, and maintaining a stable interest in products sold is a key factor explaining the role of the sustainability of Intel’s supply chain network.
Intel’s Supply Chain Model
Because Intel supplies branded computer components globally, its business model about supply chains may be described as multi-tiered. Before receiving goods by target consumers, the products of the corporation go through a complex delivery system, and to ensure the reliability of these procedures, a clear monitoring system is necessary. In Figure 3, the key stages of Intel’s supply chain are presented and based on this diagram, one can note the multiplicity of all the stages of logistics (“Intelligent Intel® connected logistics platform infographic,” n.d.).
Comparison with Another Supply Chain Model
Since Intel delivers computer components globally, the corporation needs to promote its products through appropriate marketing approaches. As such a strategy, the company uses ingredient branding as a tactical solution that allows attracting the attention of the target audience to specific products but not the entire production line as a whole (“Intel,” n.d.). This approach is typical for Intel’s business, but as applied to the supply chains of many other large companies, it is unlikely to be effective. For instance, Kumar et al. (2016) analyze the business model of Amazon.com, one of the largest online product delivery companies, and note that for this corporation, the e-tailing channel is a key tactical solution. For this organization, this method is optimal because the entire volume of goods is sold via the Internet. For Intel, this solution is unacceptable since, in addition to an online shopping option, the company has numerous outlets that provide significant profits. Therefore, in the context of different approaches to business, both considered supply chain models cannot be interchangeable and are suitable for each specific corporation.
Challenges in Supply Chains and Strategies to Minimize Them
The challenges that Intel faces in maintaining sustainable supply chains are largely caused by a high demand for its products. According to Kim and Davis (2016), the company is forced to cope with a large volume of applications due to the specifications of digital products, and delivery times may be delayed. To overcome this problem, strengthening control at all the stages of the chain is a relevant solution in conditions of a multi-stage logistics system. Another challenge that Kim and Davis (2016) highlight is complicated material sourcing. Since Intel has to produce goods in large volumes, a flawless interaction with manufacturers of raw materials is necessary, which is not always possible to ensure. To address this problem, contacts with trusted suppliers are to be established to eliminate unscrupulous and unreliable partners.
Importance of Aggregate Planning and Demand Forecasting Role
The relevance of utilizing aggregate planning for maintaining Intel’s sustainable supply chains lies in an opportunity to use the forecast of demand for logistics services. As Türkay et al. (2016) argue, this practice allows developing plans for each type of activity, as a rule, in the short term. By grouping specific operational tasks by category, the corporation’s logistics department can forecast demand and, thus, conduct productive cooperation with partners. This approach makes it possible to avoid a shortage or excess of raw materials and contributes to using available production capacity as efficiently as possible.
The role of demand forecasting, in turn, is significant and opens up prospects for planning uninterrupted supply chains. Türkay et al. (2016) remark that forecasting, along with sales monitoring, is a key aspect affecting supply chain sustainability. For Intel, this practice means monitoring all the stages of the logistics process and making plans in the short term by analyzing customer demand to maintain high-performance and error-free cooperation with suppliers of raw materials.
Impacts of Price Promotions on Demand
Price promotion is one of the effective strategies for influencing demand. Elberg et al. (2019) analyze this marketing approach and present the results of their research: about 30% of the involved participants have shown high buying intentions under the influence of discounts (p. 1). For Intel, this strategy is expressed in providing clients with the possibility of wholesale purchases, discounts for regular customers, and other promotions that retain buyers and serve as a tool to attract the target audience. As a result, through an effective pricing policy, a large proportion of consumers are involved, which influences demand positively and contributes to the capitalization of profits.
Maintaining a stable demand for goods is the key to the formation of sustainable supply chains, and the case of Intel proves the relevance of specific drivers, in particular, price promotions. The current multi-tiered business model that the corporation follows is explained by the need for operational control in numerous sections of supply chains. The existing challenges in interacting with suppliers of raw materials can be solved by aggregate planning as a valuable mechanism for supply analysis based on assessing demand prospects in the short term.
Elberg, A., Gardete, P. M., Macera, R., & Noton, C. (2019). Dynamic effects of price promotions: Field evidence, consumer search, and supply-side implications. Quantitative Marketing and Economics, 17(1), 1-58.
Intel. (n.d.). Business Model Navigator.
Intelligent Intel® connected logistics platform infographic. (n.d.). Intel.
Kim, Y. H., & Davis, G. F. (2016). Challenges for global supply chain sustainability: Evidence from conflict minerals reports. Academy of Management Journal, 59(6), 1896-1916.
Kumar, S., Tiffany, M., & Vaidya, S. (2016). Supply chain analysis of e-tailing versus retailing operation – A case study. Enterprise Information Systems, 10(6), 639-665.
Türkay, M., Saraçoğlu, Ö., & Arslan, M. C. (2016). Sustainability in supply chain management: Aggregate planning from sustainability perspective. PloS One, 11(1), e0147502.