9. Customer places an Order (By phone or through the Internet on www.dell.com) Dell processes the order Financial evaluation (credit checking) Configuration evaluations (checking the feasibility of a specific technical configuration) Sends the order to assembly plant (any one in Austin, or any other) Plants build, test & package the product (about eight hours) Dell typically ship all orders (no later than five days after receipt) www.a2zmba.com 2-3 days through General rule for production is first in, first out SUPPLIERS REVOLVERS CUSTOMERS
13. Customer Local Suppliers Dell Factory Lean Inventory Model…… Revolvers (SLCs) Suppliers 3 days of inventory - Inventory turns of 122 per year Delivery Supplier Owned Dell Owned www.a2zmba.com
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Editor's Notes
Supply Chain Management briefly described: Our planning processes “push” components into a supplier logistics center (SLC) awaiting a “pull” signal generated by the replenishment processes in our manufacturing plants. The SLCs are managed by a third party logistics provider. Inventory in the SLC’s is owned by our suppliers - there is an average of 8 or 9 days worth of inventory in the SLC. Local suppliers provide support through Vendor Managed Inventory programs. The results of this simple yet effective supply chain model is inventory turns of 91.25 (or over 90 times a year). In addition we incur an error and omission expense of only 5 hundredths of one percent, and we have experienced 8X productivity improvements over the last three years. The benefits to you of this case studied model is high quality, fast to market with new features, we build-to-order and don’t have two or three months of inventory in the channel which we’re trying to pawn off when new features are introduced into the market by our suppliers, and lower cost operations means lower priced products.
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