1. DELL
Supply Chain

2. 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

3. Cash & Revenue Management

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

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

6. Manufacturing Sites

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

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

9. 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

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

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

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

13. 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%

14. 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

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

16. 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?

17. 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

18. Summary

19. End