Dell Supply Chain


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Talks about how dell has used MIS and Information technology to get a leadership position ...(though its not a leader now)

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  • Dell Supply Chain

    1. 1. MIS @ DELL NAME ROLL NO Pranav Bhardwaj 6 Amit Kumar 20 Ashish Modani 26 Tarun Shetty 47 Anuj Pratap Singh 48 S. Karthik 53
    2. 2. Dell at a Glance <ul><li>Globally 2 nd in computer hardware design, manufacturing and distribution with a market share of around 16%.(HP is 1 st with 19%) </li></ul><ul><li>Founded by Michael Dell in 1984. </li></ul><ul><li>1987 --first computer systems company to offer next-day, on-site product service . </li></ul><ul><li>Greater than $50 Million sales per day through the internet with yearly revenue of $55.908 Billion with employee base of 78,000. </li></ul><ul><li>Ventured in areas of storage products, workstation systems, online technical support, appliance servers, network switches, standards-based point-of-sale offering for retail customers, recycling . </li></ul><ul><li>Shipped more than 10 million systems in a single quarter (Q4, FY06) </li></ul>
    3. 3. Dell’s Direct Model <ul><li>Direct relationship, most efficient path </li></ul><ul><li>Low cost and best value </li></ul><ul><li>Built to order </li></ul><ul><li>Customized systems </li></ul><ul><li>Superior, tailored service and support </li></ul><ul><li>Highest quality and most relevant technology </li></ul>
    4. 4. Dell’s Value Web Model
    5. 5. <ul><li>Material costs account for 74%($21 billion) a year for dell. </li></ul><ul><li>Improving SCM by 0.1% has bigger impact than improving manufacturing process by 10% . </li></ul><ul><li>Changing technology obsoletes Materials’ value by almost 1% per week . </li></ul><ul><li>Rely on market forecasting to drive Production. </li></ul><ul><li>Technological breakthroughs cause very short Product life cycles . </li></ul>Why SCM is so Important in PC business
    6. 6. <ul><li>Need to hold inventory at each step in value chain . </li></ul><ul><li>Have to pay suppliers first before getting paid from customers . </li></ul><ul><li>Caught with short supplies of hot products- lost sales. </li></ul><ul><li>Stuck with excess inventories of slow selling products . </li></ul><ul><li>With about 2,000 product transitions a year, the ability to reduce product time to market is critical. </li></ul>Competitors’ Disadvantages vis-à-vis Dell
    7. 7. Dell’s Competitive Advantages <ul><li>Dell is having one of the best SCM in the world. </li></ul><ul><li>90% supplies ordered online using integrated websites of supplier and Dell (B2B). </li></ul><ul><li>95% of suppliers situated very close to assembly plant hence coordination is easier. </li></ul><ul><li>Dell’s factories have only 7 hrs worth of inventory for most items whereas industry wise it is around 10 days. </li></ul><ul><li>15 suppliers provide almost 85% of all supplies. </li></ul><ul><li>Dell gets paid by customers and then pays to its suppliers. </li></ul>
    8. 8. <ul><li>Dell chose i2 Technologies for its SCM system. </li></ul><ul><li>i2 serves almost 70% of the SCM market. </li></ul><ul><li>Every 20 sec the S/W aggregates orders, analyzes material requirements ,compares Dell’s on-hand inventory with its suppliers’ inventory and then creates a supplier bill of material to meet its order needs . </li></ul><ul><li>Instead of forecasting the daily supply needed, Dell receives the exact material every two hours to fulfill actual customer orders. </li></ul>Dell Chooses i2 SCM S/W package
    9. 9. Dell ERP Debacle
    10. 10. Dell’s Ans to ERP G2 Architecture The G-2 architecture enables company to run “best-of- breed applications” rather than only a single enterprise system.
    11. 11. RFID @ DELL
    12. 12. What is RFID <ul><li>RFID stands for Radio Frequency Identification Devices. </li></ul><ul><li>RFID is a 3 part technology consisting of: </li></ul><ul><li>A reader </li></ul><ul><li>A receiver with decoder </li></ul><ul><li>A Transponder </li></ul>
    13. 13. RFID applications
    14. 14. RFID at Dell - Manufacturing <ul><li>Tracking code and Computer assembly instructions are added to the tray. </li></ul><ul><li>This determines the specific line to which the tray should go to. </li></ul><ul><li>At every stage of the assembly, the tags are read by the antenna for specific instructions. </li></ul>
    15. 15. RFID at Dell - Shipping <ul><li>Once assembled and tested, production information is inserted into the tags and sent to a shipping station. </li></ul><ul><li>At the shipping station, the RFID tag transfers data to the control PC. </li></ul><ul><li>This control PC uses this information to print the appropriate label. </li></ul>
    16. 16. Benefits of RFID <ul><li>Production stops have reduced dramatically. </li></ul><ul><li>Labor can be allocated by minimizing repetitive activities. </li></ul><ul><li>Returns due to wrong shipping of products have been minimized. </li></ul>
    18. 18. Reduction of TCO <ul><li>Dell aims to reduce TCO for its customers by improving its IT systems: </li></ul><ul><li>To meet corporate objectives. </li></ul><ul><li>Keep costs to a minimum. </li></ul><ul><li>Reduce Complexity. </li></ul>
    19. 19. THE SCALEABLE MODEL <ul><li>A shift from proprietary technologies to in house Dell capabilities. </li></ul><ul><li>‘ Pay as You Go’ model. </li></ul>
    20. 20. Benefits of the ‘Scalable’ Model <ul><li>Increase performance and availability by scaling incrementally </li></ul><ul><li>Minimize management overhead. </li></ul><ul><li>Improve utilization rates. </li></ul><ul><li>Preserve capital. </li></ul><ul><li>Reduce TCO </li></ul>
    21. 21. Delivering High Performance <ul><li>2 Global Centers with 72 Dell PowerEdge 6650 servers. </li></ul><ul><li>Dell uses Oracle 9i Database with Real Application Clusters (RAC) running on Red Hat Linux Advanced OS for servers. </li></ul><ul><li>Servers help carry out 5 million transactions a day </li></ul>
    22. 22. Delivering High Performance - Storage <ul><li>Dell uses Dell/EMC Fibre Channel SAN (Storage Area Network) </li></ul><ul><li>This helps: </li></ul><ul><li>Store and retrieve critical information. </li></ul><ul><li>Helps it scale easily and thus enabling it to accommodate any increase in storage system. </li></ul>
    23. 23. Dell’s Factory Planner Solution <ul><li>Manages 250 suppliers who handle 4000 components. </li></ul><ul><li>Calculates schedules. </li></ul><ul><li>Estimates surplus parts in the factory and in the supplier inventory. </li></ul><ul><li>Places orders, which are delivered within 90 minutes! </li></ul>
    24. 24. Reliability <ul><li>A single database is run on a cluster of Dell servers running on Intel processors. </li></ul><ul><li>This ensures that the minute a server is down, another server automatically comes up and takes over. </li></ul>
    25. 25. B2B @ DELL
    26. 26. Business To Business (B2B) Model <ul><li>INTRODUCTION </li></ul><ul><li>Business model for dealing with large business entities. </li></ul><ul><li>Server- to- server communication over internet integrating both supplier & buyer system. </li></ul><ul><li>Shopping online with customer’s ERP Procurement Application with simultaneous up gradation. </li></ul><ul><li>No duplicate information entry. </li></ul><ul><li>Easy process, less cycle time, less errors. </li></ul>
    27. 27. Dell’s Objectives With B2B Integration <ul><li>To quickly integrate customers who are capable today. </li></ul><ul><li>Built a solution to integrate any customer who </li></ul><ul><li>supports open industry standard of XML,EDI </li></ul><ul><li>To help customers built a B2B solution for rapid deployment & connectivity. </li></ul><ul><li>Providing hardware, software & consultation to help build a system which not only connects to Dell but even to other suppliers. </li></ul>
    28. 28. B2B e-Commerce Solutions <ul><li>Connection to more than 20 different industry E-procurement (ERP) tools & usage of standard formatting protocols. </li></ul><ul><li>Example- Ariba, Peoplesoft, SAP, EER, Peregrine,etc. </li></ul><ul><li>Basic division into 2 parts: </li></ul><ul><li>Supplier hosted solutions </li></ul><ul><ul><ul><li>Dell will host the catalog . </li></ul></ul></ul><ul><ul><ul><li>Customers will access their own custom catalog to retrieve their personalized configurations. </li></ul></ul></ul><ul><ul><ul><li>Catalog maintenance by sales representatives. </li></ul></ul></ul>
    29. 29. <ul><li>&quot;PunchOut&quot; - authenticated access to the customer's catalog at Dell from the customer's Internet browser to facilitate shopping </li></ul><ul><li>Order Requisition - shopping cart data pulled back into the customer's ERP system and workflow processing </li></ul><ul><li>Electronic Purchase Order - sent back to Dell for automated order processing </li></ul><ul><li>PO Acknowledgement - response returned to customer </li></ul>
    30. 30. <ul><li>Buyer Hosted Solutions: </li></ul><ul><li>Most complex and require resources, time and effort to implement. </li></ul><ul><li>Catalog information exported to a spreadsheet or file and either sent to the customer directly for inclusion in their own system or moved to the E-Procurement vendor's network to be utilized and accessed there. </li></ul><ul><li>Information can become outdated so regular updates required. </li></ul><ul><li>Customer bears a large burden of catalog maintenance. </li></ul>
    31. 31. Supplier vs. Buyer <ul><li>Supplier </li></ul><ul><li>Pros: </li></ul><ul><li>Real-time Data Updates </li></ul><ul><li>Data Accuracy </li></ul><ul><li>No Double Entry </li></ul><ul><li>Integrated Electronic Transaction </li></ul><ul><li>Allows supplier to manage complexity of valid configurations </li></ul><ul><li>Cons: </li></ul><ul><li>Requires XML Communication Capability . </li></ul><ul><li>Customer gets a different look and feel from every 'Punchout' supplier </li></ul><ul><li>Buyer </li></ul><ul><li>Pros : </li></ul><ul><li>Works well for commodities with limited configurations </li></ul><ul><li>Catalog Preview Management </li></ul><ul><li>Consistent look and feel among different suppliers </li></ul><ul><li>Cons : </li></ul><ul><li>Data Accuracy </li></ul><ul><li>Catalog Management </li></ul><ul><li>Manual Data Update and Order Receipt (sent in email) </li></ul>
    32. 32. Engaging With Dell <ul><li>In order to maximize customer opportunities through B2B integrations, Dell has identified the primary criteria for quick, successful integrations. These are divided into two parts: </li></ul><ul><li>Purchasing Focus: </li></ul><ul><ul><ul><ul><ul><li>Developed or are developing an e-commerce strategy. </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Larger numbers of orders . </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>More standardized configurations. </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Centralized procurement. </li></ul></ul></ul></ul></ul>
    33. 33. Engaging with Dell Contd. <ul><li>Technology focus: </li></ul><ul><li>Dell's solutions are best designed for customers with some of these capabilities: </li></ul><ul><ul><ul><ul><ul><li>Punch out capabilities in their ERP or access to an authenticated intranet. </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Dedicated development teams. </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>ERP systems that can use or translate XML. </li></ul></ul></ul></ul></ul>
    34. 34. Dell- Customized for the Customer
    35. 35. <ul><li>Corporate customers account for almost 85% of revenue. </li></ul><ul><li>Large corporate customers access Dell website called dell premier which is a customized version of </li></ul><ul><li>Access to product and service information tailored to a particular company. </li></ul><ul><li>Can order PCs directly from a menu of </li></ul><ul><li>configurations pre-approved by the company without going through normal purchasing channels or paperwork. </li></ul>Dell Premier
    36. 36. <ul><li>Orders put on Premier are automatically routed to higher managers for approval which eliminated paperwork and delays. </li></ul><ul><li>Access to Dell’s own on-line internal technical support tools which is actually used by Dell’s Support personnel when a customer calls for help. </li></ul><ul><li>Premier sites can integrate with - Microsoft (Biztalk) </li></ul><ul><li>Oracle, Peoplesoft , SAP ,etc . </li></ul>Dell Premier contd.
    37. 37. <ul><li>The Dell Premier sites includes more than 500,000 pages of information and facilitates greater knowledge transfer. </li></ul><ul><li>Gives detailed info on all the configurations(h/w and s/w) present in the customer’s pc which helps in quick decision making for customer if going for upgrades. </li></ul><ul><li>The same configurations info helps Dell to make repeat business with customers by offering products specifically to them. </li></ul>Dell Premier contd.
    38. 38. Dell e-learning <ul><li>Need for training for continuous product development, while keeping a worldwide sales and service organization up to speed. </li></ul><ul><li>Issues of quality, costs and no re-use </li></ul><ul><li>Eedo's ForceTen chosen as the content development and delivery platform for e-learning programs </li></ul><ul><li>Enabled Dell to own and control their content as well as the development process </li></ul><ul><li>Higher quality training, cost reduction, re-use and translation facility. </li></ul><ul><li>Result : Dell increases sales productivity by 20%, while reducing training development costs by 55% </li></ul>
    39. 39. Authentication Solutions @ DELL
    40. 40. Dell authentication <ul><li>Challenge at hand: </li></ul><ul><li>Integrate authentication and identity management for Microsoft Windows, UNIX, and Linux platforms </li></ul><ul><li>Incorporate this into Microsoft Active Directory across the entire Dell infrastructure </li></ul><ul><li>Solution: </li></ul><ul><li>Vintela Authentication Services from Quest Software deployed with the help of Quest Professional Services </li></ul>
    41. 41. <ul><li>Consolidating authentication and </li></ul><ul><li>identity management systems: </li></ul><ul><li>Multi-Platform Management </li></ul><ul><li>Integration (MPMI). </li></ul><ul><li>Microsoft Active Directory service </li></ul><ul><li>Planning for the future: </li></ul><ul><li>Migrate the local user accounts from each non-Windows system into Active Directory. </li></ul><ul><li>Building a relationship: </li></ul><ul><li>Able to use this product for all costumer related solutions with a guarantee of successful execution </li></ul>Dell authentication contd.
    42. 42. CRM @ DELL
    43. 43. <ul><li>Dell maintains special DB of its top 50 global customer. </li></ul><ul><li>Maintains a Global Data Repository for all of its customer. </li></ul><ul><li>Uses DB compiled by Dun & Bradstreet for 500 global companies for selectively targeting sales efforts . </li></ul><ul><li>Real Time CRM </li></ul><ul><li>When a customer calls in for placing order then customer service links directly to Dell’s Real Time inventory . </li></ul><ul><li>Depending on latest inventory data Dell can : </li></ul><ul><ul><li>Push Available inventory at lower cost. </li></ul></ul><ul><ul><li>Promote latest/new products at higher cost. </li></ul></ul><ul><ul><li>Provide add-on products with discounts . </li></ul></ul>CRM in Dell
    44. 44. <ul><li>Boeing as part of Federal Govt rule cannot use internet for doing business. </li></ul><ul><li>Dell has adapted customized its offering to Boeing’s IT system . </li></ul><ul><li>Dell uses EDI for processing orders from Boeing directly into its order management system. </li></ul><ul><li>30 Dell people take care of Boeing’s 140,000 Dell PCs - forecasting future PC purchases, managing current inventory and securing needed service and support. </li></ul>Why Boeing will only do business with Dell -CRM
    45. 45. Demand Forecasting at Dell
    46. 46. <ul><li>Starting 2005 Dell set up Kiosk locations at Shopping malls across US (Wal Mart Stores and other shopping malls), Canada ,China ,Japan and Australia where people can experience dell products . </li></ul><ul><li>Customers place order for dell products to be delivered later. </li></ul><ul><li>Reasons for going for Hybrid Sales Model </li></ul><ul><li>Biggest competitor HP gaining market share faster particularly in notebooks chiefly because of retail outlets. </li></ul><ul><li>Low internet penetration in India and China –two of biggest and fastest growing markets. </li></ul>Dell losing confidence in Direct internet based sales model ??
    47. 47. Summary of MIS and its Effect in Dell
    48. 48. Acknolwdgements /Sources <ul><li> </li></ul><ul><li> </li></ul><ul><li> </li></ul><ul><li>Wikipedia </li></ul><ul><li> </li></ul><ul><li> </li></ul><ul><li> </li></ul><ul><li>CENTER FOR RESEARCH ON INFORMATION TECHNOLOGY AND ORGANIZATIONS University of California, Irvine. </li></ul><ul><li> </li></ul><ul><li> </li></ul>
    49. 49. THANK YOU