Intel Quality System Handbook: QMS and Culture Analysis

Introduction

The catalyst of Intel's ability to continually innovate in its existing businesses—and to successfully branch into entirely new ones including networking, security, and video-optimized chipsets—is highly dependent on the company's ability to ingrain quality management through every supplier, production, design-in, and service process. For Intel to innovate, it must put quality at the center of its organization and continually work to exceed its own rigorous standards of performance (Leip, 32, 33). Intel is a very metric-driven culture that thrives on the use of metrics, including yield management rates of its memory and microprocessor foundries, as well as capacity utilization and yield management metrics of performance (Intel, et al.).

Every enterprise faces the need to innovate to survive, yet many have varying levels of urgency about translating innovation into profitable products and services. Intel has a particularly strong sense of urgency about keeping innovation and quality tightly synchronized with each other (English, 44). The Intel Quality Management System (QMS) and Supplier Continuous Quality Improvement Program (SCQIP) are two foundational programs designed to further support and strengthen the innovation processes at Intel, while also ensuring the core value proposition of the company—state-of-the-art quality products—is consistently met (Intel, et al.). Quality is therefore the foundational element of the value proposition and serves as a very strong catalyst of innovation within Intel. The intent of this analysis is to evaluate how Intel has been able to galvanize its value proposition around quality management, while at the same time capitalizing on the strength of Moore's Law as a unifying concept of its product development strategies.

How Intel Successfully Engrained Quality into Their Culture

Intel's values and supporting behaviors form the foundation of how the company translates its high regard for quality into a consistently well-executed value proposition and a high level of innovation. At the center of these values and supporting behaviors is the belief that quality is the single greatest differentiator, and that entire markets can be defined not only by the speed of innovation but by excellent quality levels as well. This is a unique aspect of Moore's Law that is not often discussed; yet the ability to deliver exceptionally high-quality products over time at the pace this law quantifies continues to transform Intel and its profitability. Intel's values and supporting behaviors include customer orientation, discipline, quality, risk-taking, creating a great working environment, and results orientation. Taken together, these factors are what Intel relies on to keep its culture focused on quality management and the many metrics associated with it.

Intel has found a strong correlation between creating a culture that values measuring quality management initiatives—and ensuring accountability for results—and the ability to remain financially resilient despite recessions, as illustrated by its revenue performance data from 1999 to 2009.

Intel's core values of customer orientation, discipline, quality, risk-taking, creating a great working environment, and results orientation also lead to consistently higher levels of product quality by infusing autonomy, mastery, and purpose into the organization. These three factors are responsible for long-term learning within the organization (Ramsey, 12, 13). Intel has specifically designed its culture to support these factors as part of its core values and behaviors (Intel, et al.). What emerges is an agile, values-based platform for optimizing organizational structure around quality management. All of these factors are also designed to provide Intel with the ability to move quickly to capture the benefits of Moore's Law.

Intel Manufacturing's Use of Metrics to Manage Quality and Compliance

Intel Manufacturing's compliance and quality management initiatives are heavily centered on Six Sigma DMAIC and Total Quality Management (TQM) techniques and methodologies (English, 2004). The metrics generated from Six Sigma DMAIC, TQM, and compliance initiatives include capacity utilization, yield measurements, Defect Parts Per Million (PPM), and Voice of the Customer (VoC) feedback from the DMAIC process. Additionally, scorecards are generated for reliability and durability measures. All of these factors are critical during the New Product Development and Introduction (NPDI) process. Overlaying quality management onto the NPDI process provides a structured framework for ensuring that quality standards are met from the earliest stages of product development through to final launch.

Conclusion

Intel's manufacturing operations are centered on compliance and quality management, with Six Sigma DMAIC and TQM initiatives used for managing BPI, BPM, and BPR initiatives. The metrics generated from measuring these processes are used to keep manufacturing quality at the center of Intel's unique value proposition and its approach to serving Original Equipment Manufacturer (OEM) customers. Metrics of yield and performance of foundries are based on the minimum quality levels of each processor, memory component, or networking component produced. Foundries are monitored in real time with respect to their yield, with quality levels serving as the metric that dictates how much production will be sold.