Cycle-time analysis finds money in debits. (cycle-time reduction principles saves Intel Corp. $200,000 a year from debit memos)

Purchasing, November, 1991

Purchasing-driven cycle-time reduction projects need not be geared toward just production, says Roger Whittier, director of corporate purchasing at Intel Corp. By applying cycle-time reduction principles to debit memos (i.e., the return of bad material to suppliers for credit), Intel was able to cut the process to six days from 72 days. And, it has accelerated collection of almost $200,000/yr.

Whittier and Roger Viera, commodity manager, discovered that the debit memo process was a bureaucratic procedure requiring manual tracking and the generation of a seven-part printed form that crossed such functional areas as the internal customer, purchasing, inventory control, shipping, accounts payable, credit, and the supplier.

"Returning bad material...