1. Dell: Unlocking Innovation
Presented by Garikayi, Kieran Habeeb, Omari, Patrick and Jakub.

2. Presenter and Topic Garikayi – Dell’s History and Business Model
Habib – Dell’s Internal Information Systems
Jacob – Dell’s Information Access Requirements
Keiran – Dell’s Management Structure
Omar – Dell’s Supply Chain
Patrick – Dell’s Position in the Future

3. Dell: The Early Days Began in 1984 by Michael Dell
Initially known as PC’s Limited
Changed to ‘Dell’ in 1988
Began selling through website in 1996
2002 Dell expanded its product line
Dell is one of the great success stories of the past decade
The computer company business Michael Dell started while still a student at the University of Texas grew to a multi-billion dollar enterprise guided by the insight that it could bypass computer dealers and could sell directly to customers.
Dell dropped out of school in order to focus full-time on his fledgling business, after getting about $300,000 in expansion-capital from his family.
By Garikayi Brasington Madzudzo

4. Dell Business Model Simple in concept but involves great
complexity and precision in actual execution.
By Garikayi Brasington Madzudzo

5. Build – to - Order Customer configures the product on the web.
Order fulfilled within 36 hours.
From its early beginnings, Dell operated as a pioneer in the “configure to order” approach to manufacturing .
Customers are aided by configuration management software that enables them to choose from a menu of hardware and software options.
Dell´s business model is to let the customer configure the product on the web and fulfill within 36 hours.
Customers are aided by configuration management software that enables them to choose from a menu of hardware and software options
From its early beginnings, Dell operated as a pioneer in the “configure to order” approach to manufacturing — delivering individual PCs configured to customer specifications
By Garikayi Brasington Madzudzo

6. Build-to-Order By Garikayi Brasington Madzudzo
Customers are aided by configuration management software that enables them to choose from a menu of hardware and software options.
In the past computer manufacturers assembled computers based upon what they had in their inventory, on the contrary Dell produces a computer only when the customer requests and pays for the item. In essence, customers funds are used to finance the transaction and this saves Dell millions of dollars in financing costs
By Garikayi Brasington Madzudzo

7. Direct Sales
Dell sells its products to customers using direct sales model via Internet and Telephone network.
The direct sales approach is built on two key elements :
1. direct customer relationships.
2. products and services targeted at distinct customer segments.
Implements a just-in-time manufacturing approach
Traditional computer manufacturers sold their products through retailers, Dell however, created a cost-efficient way to sell their computers by cutting out the middleman and selling their computers directly to their customers
This direct sell method saves Dell 3-5% in inventory cost which would have otherwise been paid to retailers.
To minimize the delay between purchase and delivery, Dell has a general policy of manufacturing its products close to its customers. This also allows for implementing a just-in-time (JIT) manufacturing approach, which minimizes inventory cost
By Garikayi Brasington Madzudzo

8. Dell’s Value Web Model By Garikayi Brasington Madzudzo
Dell´s business model is to let the customer configure the product on the web and fulfil within 36 hours.
-        Customers can check the order status and also get the technical help online
The high-tech components, such as microprocessors and software are provided by firms as Intel and Microsoft, they rely on big players.
-        The low-tech components are provided by small multiple players who compete on prices and availability
By Garikayi Brasington Madzudzo

9. Direct Sales Comparison
Indirect distribution channel of the PC industry
Dell’s direct distribution channel
A comparison of how dell gets its products to the customer in comparison with other suppliers, notice the stages that dell avoids and this leads to great savings and efficient order fulfilment and low prices.
By Garikayi Brasington Madzudzo

10. Advantages Brings new products to market quickly
Increases market share
Achieves high returns on investment in a highly competitive industry.
Successful in minimizing inventory
Cheap prices
Enhances customers satisfaction
By Garikayi Brasington Madzudzo

11. References
Steven, A.: Information Systems, the foundation of E-business. Fourth edition..Prentice Hall, 2002.
Kraemer K., Dedrick J., Yamashiro S.. Refining and Extending the Business Model with Information Technology: Dell Computer Corporation .2000
References for the Dell Business Model by Garikayi Brasington Madzudzo
By Garikayi Brasington Madzudzo

12. DELL INFORMATION SYSTEMS
WHY WE NEED INFORMATION SYSTEMS..
Dell also uses information to manage relationships with
customers.
Senior managers need information to help with their business planning
Middle management need more detailed information to help them monitor and control business activities
Employees with operation roles need information to help them carry out their duties.
By Habib Munir Babba

13. Dell: Information System
Transaction Processing Systems (TPS)
Decision Support Systems (DSS)
Expert Information Systems (EIS)
Order Management Information Systems (DMIS
Office Automation Systems (OAS)
By Habib Munir Babba

14. Transaction Processing System
Manage customer relationships
Broker between customer and 3rd party maintainers
Call-Centre uses system to troubleshoot customer problems
Develops computerised FAQ’s (Frequently Asked Questions)
Dell also uses information to manage relationships with customers. It outsources customer service but operates as broker between the customer and the third-party maintainers (TPMs) that actually provide service. Dell’s call center service people trouble-shoot the customer’s problem and trigger one electronic message to ship the needed parts and another to dispatch a TPM to the customer. As a result, Dell knows the kinds of problems customers face, the parts causing the problems, and the performance of its TPMs. Dell uses this information to develop computerized
sets of frequently asked questions (FAQs) and problem solutions, to train service representatives.
By Habib Munir Babba

15. Order Management System
Order routed to finance department
Payment approved, order referred to engineering
Transferred to plant, with order specification
Order checked against inventory
Production begins.
order is first routed to the finance department, where the
customer’s means of payment is checked. If approved,
the order then goes to engineering, which reviews it to be
sure that the desired configuration is technically feasible.
Then it goes to the plant, where a worker receives a printout
of the order, with complete information on hardware
and software configuration and any special requirements.
The order is then checked against inventory to ensure that
the required parts are available in the build area
By Habib Munir Babba

16. Dells Success: How IT Helped
The contribution
of IT to operational efficiency is reflected in measures
related to procurement and inventory, manufacturing production,
cash management, and administrative overhead
The contributions of Dell’s IT investments to the firm’s performance are difficult to disentangle systematically from the other inputs to production and from the many process innovations continually made at all stages of the value chain. However, it is clear that IT and the information it provides, along with process improvement, have contributed to Dell’s exceptional performance. The contribution of IT to operational efficiency is reflected in measures related to procurement and inventory, manufacturing production, cash management, and administrative overhead.
By Habib Munir Babba

17. Dell - Information Access Requirements
Unique business model
Connecting participants
Real-time response
Virtual integration
Based on:
Refining and Extending the Business Model with Information Technology: Dell Computer Corporation – Kraemer K., Dedrick J., Yamashiro S., The Information Society 16:5-21, [15/01/12]
The Impacts of Information Technology, the Internet, and Electronic Commerce on Firm and Industry Structure: The Personal Computer Industry – Dedrick J., Kraemer K., [14/01/12]
by Jakub Gieryn

18. Unique business model: knowledge drives sales
Trends
Technology
Know-how
Competition
by Jakub Gieryn

19. Connecting participants : team effort to sell & service
by Jakub Gieryn

20. Real-time response: key to customer care
by Jakub Gieryn

21. Virtual integration
by Jakub Gieryn

22. Dell: Management Structure
Strategic
Tactical
Operational
Here at Dell, we have 3 different management levels. Strategic, Tactical and Operational. We believe, the Strategic level is WHAT’ we aim to do. Tactical is HOW we do it and Operational is us ‘DOING’ it.
By Kieran Saeed

23. Strategic Level Prioritise customer satisfaction Disdain inventory
Fully customised PC’s
At the Strategic level it is important for us to ensure that our customers receive the best service we can possible offer. Our focus is on what the customer wants. We offered fully customisable PC’s where the customer was able to choose what they wanted and how they wanted their PC.
By Kieran Saeed

24. Tactical Level Minimum stock Strategically placed warehouses
Agility in staff
36 hours max
There was a time at Dell when the neighbouring companies around us had days of assembled stock. We had 30. We aimed to get it down to 20, and then 10 and eventually we had none at all. We aimed to get the completed computer to the customer in 36 hours maximum and only pay the supplier once the customer has placed the order.
By Kieran Saeed

25. Operational Level Keep staff motivated
Offer technical support, different levels available to buy
Conduct surveys and continue to ask for customer feedback
Allowing staff to buy shares into the company was very popular, at the time. Other similar companies running a similar approach had less than half their staff participating as we did, and we feel this motivates staff to work harder as they are building something of their own. Once a customer
By Kieran Saeed

26. How Dell integrates its supply chain
A Supply Chain encompasses all activities in fulfilling customer
demands and requests
The activities are associated with the flow and transformation of goods from the raw materials stage, through to the end user, as well as the associated information and funds flows.
By Omari Kondo

27. There are four stages in supply chain
The supply network,
The internal supply chain (which are manufacturing plants),
Distribution systems,
The end users.
By Omari Kondo

28. Supply Chain By Omari Kondo
Moving up and down the stages are the four flows: Material flow, service flow, information flow and funds flow.
1) E-procurement links the supply network and manufacturing plant,
2) E-distribution links the manufacturing plant and
3) The distribution network, and
4) E-commerce links the distribution network and the end users.
Dell uses “ Build-to-order” sles model
By Omari Kondo

29. Supply Chain in a Dell way.
Direct ‘Build-to-order’
Dell has been following its unique ‘direct build-to-order’ sales model for more than 20 years. Customers can plan their own configuration and place orders directly with the company via the phone or its Web site. Over the years, Dell’s supply chain efficiencies and direct sales gave it a competitive advantage
Dell Supply chain works as follows:
After a customer places an order,
either by phone or through the Internet on Dell processes the order
through financial evaluation (credit checking) and configuration evaluations (checking the feasibility of a specific technical configuration), which takes two to three days, after which it sends the order to one of its manufacturing plants. These plants can build, test, and package the product in about eight hours. The general rule for production is first in, first out (FIFO), and Dell typically plans to ship all orders no later than five days after receipt. (There are, however, some exceptions. For example, Dell may manipulate the schedule when there is a need to replace defective units or when facing large customers with specific service-level agreements (who have nonstandard quoted manufacturing lead times) for their orders).
In this supply chain, Dell Computer is the captain of the
chain; the company selects suppliers, forges partnerships with other
members of the supply chain, fulfills orders from customers and follows
up the business transaction with services.
Dell has significantly less time to respond to customers than it takes to transport components from its suppliers to its assembly plants. Most of the suppliers are located in Southeast Asia. So it takes about seven days for air shipments and takes up to 30 days by water and ground.
To compensate for long lead times and buffer against demand variability, Dell requires its suppliers to keep inventory on hand
in the Austin revolvers (for “revolving” inventory).
Revolvers or supplier logistics centers (SLCs) are
small warehouses located within a few miles of Dell’s
Dell does not own the inventory in its revolvers;
this inventory is owned by suppliers and charged to
Dell indirectly through component pricing. The cost
of maintaining inventory in the supply chain is, however,
eventually included in the final prices of the
computers. Therefore, any reduction in inventory benefits
Dell’s customers directly by reducing product
prices. Low inventories also lead to higher product
quality, because Dell detects any quality problems
more quickly than it would with high inventories.
By Omari Kondo

30. Challenging Times Dell lost the leading in 2006
In 2006 however, Dell faced several problems. Many customers complained about long delays in supplies. The problem of Sony battery cells in its laptops brought undesirable media hype to the company. Increasing discontent of customers led to a slowdown in sales. Consequently, Dell lost its market leadership to Hewlett-Packard Co. (HP). By 2009 Dell’s Market Share in US and Worldwide (2009) compared to other top PC makers was still under HP.
By Omari Kondo

31. References http://www.casestudyinc.com/dell-supply-chain-case-study
Steven, A.: Information Systems, the foundation of E-business. Fourth edition..Prentice Hall, 2002.
Saunders,R.: Business the Dell Way, 10 Secrets of the World’s Best Computer Business.
By Omari Kondo

32. How well is Dell positioned for the future?
By Patrick Kayijuka

33. How well is Dell positioned for the future?
2007 Michael Dell returns as CEO
44,000 of Dell’s 103,000 employees in service business (The economictimes)
Acquisition of 14 companies in different domains (health care, and other networking and security services)
An “Enterprise Solutions”
strategy : mixing hardware, software and services
Since the return of Mr dell, the company have changed considerably. From PC business to one that is more into core of information technology and data centre, services. We are Producing bigger gears used in data centre. E.g Server computers, storage, network equipment.
We are also focusing more into services. Nearly half of the total number of employees are employed in services.
With the acquisitions of diverse companies including Perot system, Michael Dell oversees a global corporation that, has become an "enterprise solutions"company targeting the midmarket. The plan is to grow our portfolio of solutions by acquiring more intellectual property . By that, we means pre-packaged combinations of consulting services, hardware, and software -- to serve sectors like healthcare or to address horizontal needs like enterprise-class security. The strategy appears to be working. we have reported the largest revenue increase in the company's history .86%
By Patrick Kayijuka

34. Services and cloud model
Web-based offerings via Dell’s data centres – cloud model.
There isn’t ONE cloud solution.
Our infrastructure to support other companies cloud.
More understanding of health care, financial services, manufacturing and retail
Better help to customer solving problems
We still in the initial stages in cloud computing but cloud is already proving to be a good investment and generates the return fast and easily.
We are building theses cloud services to allow customers to have that as an option. We have the infrastructure so that companies can build their own cloud. We have data centres, software and tools to enable theses cloud to work more efficiently. there's a deeper understanding of healthcare, financial services, manufacturing and retail. So that we can really help customers solve the problems and challenges that they have in their businesses
Our evolution as a company are on the way. Starting with products, going to software and solutions to enlarge our market.
By Patrick Kayijuka

35. Social Media and new market
2 billion social media conversation a year
Engage with customers
Last year, 86% earnings growth
Smartphone ambition
Small and medium enterprises
India and china market
We want stronger social media capabilities. We have large social media listening centre where we listen to 2 billion social media conversation a year. we engage with our customers using social media, as a result, they are buying more from us. This is a great way to stay in touch with our customers, to listen to them and understand them more effectively. We were able to grow our earnings 86% over the last 4 quarters.
As a device company, We're focused on how we can provide complete solutions to the customers. They can include the devices, the security, the systems management and the applications. With windows 8 coming soon into the tablet, we are prepared to supply a large part of those servers, storage and network that feeding all those smartphones devices and tablets. We say that we are going where the customers are. India and china are a huge market for us. Growing fast, they are great success.
By Patrick Kayijuka

36. Dell’s positioning- Conclusion
IT is a $ 3 trillion industry (Economic times)
Only 10 companies have more than 1% share of that $ 3 trillion market
No single firm has more than 5-6% of the total
Dell have 2%
Partnership becomes necessary
Our present and future bet are SOLUTIONS (services)
These numbers indicate that, what we really have in IT industry, is a dispersed market with tonnes of opportunities. So, it is very common for companies to partner together and compete at the same time. Our focus is into Cloud computing and solutions business to allow easy scalability to our customers.
The bet we made on the personal computer was 28 years ago. About 16 years ago, we made a big bet on servers and that's turned out very well. We have a $20 billion enterprise business for servers and moving into services. The big bet that we are making now is how do we solve the IT challenges that our customers face. And that's causing us to grow quite a lot in our business, to evolve beyond products into solutions
By Patrick Kayijuka

37. References Saunders, R. (2000) Business the Dell way. Oxford: Capstone
Dineley D., Knorr E. (n. d.) Michael Dell: We're a 'solutions' company [online] available from < [18 February 2012]
Collins J. (n. d.) Still passionate about the PC[online] available from [17february 2010]
Jayadevan PK (n. d.) Tablets will not replace PCs; they actually do different things: Michael Dell, Chairman & CEO, Dell [online] available from < [17 February 2012]
By Patrick Kayijuka

38. Any questions?