To a person who is not "up" with the latest high tech terminology, a phrase like How AMD Bakes its 65 Nano Barcelona Cakes seems almost like nonsense. Giving near-nonsense a chance can pay off at times, and this article in technology journal The Inquirer contained a neat case study in two very different approaches to operational excellence taken by Intel and AMD.
Intel is the giant of the semiconductor world and AMD is the challenger chasing it. Being the incumbent with resources and market share, Intel dominates through momentum while AMD is more nimble. Says the article:
Intel has a strategy of copy exact. Basically, whatever the technology is, it is rolled out to the relevant fabs exactly the same way. AMD has a more "on the fly" approach and experiments in real time on the production lines.
Intel has many fabs, while AMD has one. Fabs cost billions to build, so neither firm is fab-building their way to operational excellence.
AMD has no luxuries, it has to produce stuff with what it has.
That's a great reason to do kaizen. In an echo of the definition of Just in Time and doing more with less, the manufacturing system called APM allowed AMD to [...]make only the chips needed and continuously tweak them. When your back is to the wall, and any mistake means death, you can do amazing things.
Describing the wafer manufacturing process like baking a cake, the article summarizes the difference between AMD and Intel as one in which AMD has the ability to make changes to settings during the baking process and perform experiments while Intel can not. The quicker, more flexible system that responds to feedback improves faster than a system based on scale. It's a classic case of the fast taking a bite out of the slow.
The article calls this an approach a "continuous small scale improvement program". I can spell it in five letters: kaizen.
The AMD operational excellence strategy lets them make what they need, when they need it in the right quantity (as much as their forecasting is "right"). The article says:
AMD claims it does not start a wafer without an order in hand, if you sell something before you make it, you almost never end up with depreciating parts in the warehouse.
Pretty impressive if their definition of an "order" is an actual paying OEM or end customer rather than something that exists in the production planning cyberworld.
This strategy of speed and flexibility for achieving operational excellence has helped AMD increase productivity by 31% and start 1,000 more wafers per week while lowering time through the process. Stock has fallen 40% also according to the article.
Intel didn't get to be as successful as they are by doing production poorly. But that it doesn't matter how good you are. Time flows and how fast you can improve is the key to survival. Intel's operational excellence strategy of "copy exactly" would be excellent if what you was copied had been through kaizen recently.
