Problems in the supply of Pentium 4 processors has left Intel with egg on its face after it recently proclaimed the advantages of supply chain management.
With the chip market currently depressed, Intel would choose to be under rather than over stocked, said Gary Barnett, principal analyst at Ovum. "Under supply pushes prices up," he explained.
But he was surprised that the chip maker had apparently been caught on the hop. "Intel tries very hard to manage its supplies," he said. "I've not detected any great surge in demand, so either Intel has underestimated demand or retailers may have lowered their stock levels."
Intel was quick to pinpoint demand as the cause of the current "tightening" in P4 availability. "We have exceeded our planned factory output," said company spokesman Graham Palmer.
On 27 November the chip giant championed its collaboration with i2 and Siemens Business Services to provide an integrated supply chain management package. The solution is available in Europe, and had been designed to simplify supply chain management implementation.
The combination of the tools into one supply chain is expected to shorten lengthy procurement cycles, reduce costly inefficiencies and provide better service to customers, said Tom Gibbs, Intel's director of vertical marketing.
But the company was quick to deny that its shortage of P4s was a result of poor supply chain management. "I don't see this as a supply chain problem. Despite ramping up production very quickly, demand has been very strong," said Palmer.
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