DELL Supply Chain.

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Presentation transcript:

DELL Supply Chain

Company Background Founded in 1984 Employs 53,000 people in 80 countries Revenues in excess of $49 billion Net income over $3 billion Market Capitalization greater than $91 billion

Cash & Revenue Management

Customer Segmentation 1989 stopped selling via retail channel 1997 decided to dedicate a team to consumers Segmenting gives them ability to forecast better

Dell’s Supply Chain Strength in: Flow of information Flow goods

Manufacturing Sites

Push/Pull System Push/Pull boundary located in the SLC Mass Customization

Just-In-Time Manufacturing Components arrive JIT 6 Hrs. to manufacture products Organized into work cells Assemble value-added products Standardized and modular components

Inventory Low inventories with high turnover 2 weeks in hub, turnover 100 times/yr. 2 hrs. in factory, turnover 4 times/day Hubs are vendor managed Utilize demand shaping Centralized vs. decentralized systems Postponement

Strategic Alliances Requires suppliers to meet stringent performance goals Provides suppliers with training and development Focused on reducing inventory throughout supply chain

Collaborative Forecasting Continuously rebalances demand with supply Use ValueChain to share real-time information Multiple suppliers for each component Supplier representation on-site

Quality Quarterly Business Reviews Data driven decisions Identify actions / commitments Agreement on future performance targets Measure and reward performance

Quality Quick response time to customer feedback and quality issues High levels of customer satisfaction Process capability of 5 sigma On-time-delivery rate = 84%

Distribution Strategy Direct Model Tenets - Ship to Target & Deliver to Target. Ship to Target - Order to shipment. Deliver to Target - Customer actually receives the goods. Lead Time Reduction

Internet and E-business Dell structure for e-commerce International e-commerce Online sales and support

Communication “The ability to directly disseminate and react to information is core competency.” Michael Dell directly communicate several layers down to find out what happened? Micromanagement?

Obstacles 2002 labor lockout of West Coast Docks “When a labor problem or an earthquake, or a SARS epidemic breaks out, we’ve got to react quicker than anyone else.” Shipping partners gave them a warning China has ability to duplicate direct model

Summary

End