Intel has decided to address the shifts in PC manufacturing model head-on, after build-to-order and configuration-to-order programmes by vendors began to bite into profit margins last year.
It was understood the chip giant was setting up a supply chain management initiative in which it will require access to vendors' material resource planning data to synchronise its output with OEM demand. This will replace phone, fax and EDI transactions with larger customers.
Vendors' buying patterns for processors have changed since the majority implemented BTO/CTO, as demand for PCs is pulled from resellers rather than pushed by manufacturers (PC Dealer, 5 November 1997). As a result, Intel issued a profit warning for the second quarter ending June in which it had to revise earnings forecasts.
The advent of BTO represented a departure for Intel. Previously, the vendor did not have to respond directly to market trends in the way it now has.
Intel refused to go into detail, but a representative said: 'Because of the competitive situation, supply line management is high on our agenda,' he said.
Rana Mainee, AMD European market analyst and planning manager, said Intel has left the time behind when it did not need to respond to the market.
'If Intel were a more insightful company, it would have responded six to nine months ago.'
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