Академический Документы
Профессиональный Документы
Культура Документы
Agenda
Introduction to Dell Computers
that develops, manufactures, sells, and supports personal computers and other computer-related products
Started in Michael Dells dorm room in 1984
Grossed $75 million dollar sales in 1985 Made the fortune 500 in 1992 Ranks 2nd in computer sales Changed how computers were sold
A. Direct Sales
A direct sales system allows DELL to:
Cut Costs Develop exactly what customers want Build relationships with customers
B. Build to Order
A build to order system allows DELL to:
Increase inventory velocity Minimize inventory cost Minimize the need for forecasting
C. Supplier Integration
Supplier integration allows DELL to maximize the
year) for Dell. Improving SCM by 0.1%has bigger impact than improving manufacturing process by 10% Changing technology obsoletes materials value by almost 1% per week.
Dells advantages
90% of supplies ordered online using websites of
suppliers and Dell. 95% of suppliers are situated very close to the assembly plant. Dells factories have only 7hrs worth of inventory for most items whereas industry average is around 10 days 15 suppliers supply nearly 85% of the products. Dell gets paid by the customers and then pays to the suppliers.
manufactured Advantages:
Avoids obsolete inventory Helps bring new products faster to market than
Postponement
Build-to-Order Strategy used
from customer and credit cleared Allows for customization. Results in shorter lead time. Dell has 3-4 days of finished inventory as compared to 30-45 days for most of its competitors
Modularity
Organization of complex products by
decomposing it into smaller portions that can be managed independently. Increases opportunity for postponement of final product Slots available within CPU casing to fit different types of components from various suppliers Large number of product variations possible Also assists the reverse supply chain by ease in breaking down components
concentrate on customers and supply chain Inventory replenished 3 times a week Forecast information shared by Dell with vendors to ensure timely supply Inventory held in small warehouses near Dell plants called Revolvers
Dell's systems. It helps to gather real time information about inventory level of suppliers Dell in exchange provides direct signals of customer demand to suppliers and shares current and market shifts. Dell purchases blocks of space on regularly scheduled flights from Asia, where majority of suppliers factories are located. Helps in expedited shipments Feedback is provided by Dell every quarter. Supplier is given a scorecard comparing it against industry peers on cost, quality, reliability and continuity of supply. Training and development provided to suppliers to improve their processes
UPS : Third party Logistics provider
Handles most of shipping of Dell computers Responsible for bringing together CPU, keyboard, and
integrated within their ERP Helps in demand estimation and smoothening fluctuations For customers, compatibility of computers reduces maintenance costs
Demand Management
Dealing with certain components
Direct Selling enables real-time collaboration and
synchronization between sales and manufacturing. Synchronization helps Dell to respond quickly to customer demand. If demand exceeds supply company works with third parties to expedite supply of drives, power supplies. If supply side issues cannot be resolved Dell uses demand side alternatives by changing product promotion on its Web portal in minutes to shift customer demand. Eg: When inventory for a component runs low, Dell runs a promotion on another substitute part of equal or greater quality. This helps shift customer demand from standard ordering patterns
Manage Timing of orders
Continuous monitoring of orders in the scheduling queue If backup goes above 2 days, it asks its sales force to pull off
customer demand
empowering employees. There is communication from the top management even to the employees many levels below. Dell employees are empowered to take decision so that no opportunities for meeting customer requirements are lost. The Internal collaboration is made possible by the powerful Information Technology system. Dell uses s/w provided by i2 technologies for its SCM system. Every 20 sec the s/w aggregates orders, analyses material requirements, compares Dells on-hand inventory with its suppliers inventory and then creates a supplier bill of material to meet its order needs.
Financial Fundamentals:
It is the operating margin that is important to Dell. Dell managers update, check, analyse and report
designed to continuously listen for, reward and implement ideas that can make a difference to regular operations. Dell follows methods such as Simplified Idea Generation (SIG). Dell has seen more than 1000 SIG projects submitted
across US, Canada, Japan, China and Australia where people can experience Dells products. Reasons: HP gained market share faster in notebooks because of presence of Retail outlets Low internet penetration in India and China two of the biggest and fastest growing markets. Cater to psyche of customers in markets like India wherein customers believe it only when they see it.
Thank You