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Dell ppt... 2012mba17

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Dell ppt... 2012mba17

  1. 1. Component manufacturer DELL Comp Corp Distributor Final customer Components Order Product
  2. 2. Dell Computer’s direct model departed from the industry’s historical rules on several fronts:  Company outsourced components  Eliminated retailers  Took customized orders  An integrated supply chain
  3. 3.  Dell utilizes a direct-distribution model to sell about $50 million per day online, half of its sales.  From June 2007,started placing its products in Wal-Mart.  In December 2007, Dell chose WPP, to create a new agency to handle $4.5 billion over next three years.
  4. 4. ©2009 Pearson Education, Inc. Publishing as Prentice Hall  Dell operates in B2B and B2C environments in 140 country markets.  Maintains 60,000 custom Web storefronts for major corporate buyers.  Allows online customers to build their own systems and uses the information to guide new product development.
  5. 5. REVOLVERS • Used to compensate for long lead times • Each of the revolvers is shared by several suppliers who pay rents for using their revolver. • Dell does not own the inventory in its revolvers
  6. 6.  Dell sets target inventory levels and records suppliers deviations from targets.  Dell withdraws inventory from the revolvers as needed.  It uses a quarterly supplier scorecard.
  7. 7. LOGISTICS  Dell chose i2 Technologies for its SCM system.  Every 20 sec they analyzes material requirements ,compares Dell’s on-hand inventory with its suppliers’ inventory.  Instead of forecasting the daily supply needed, Dell receives the exact material every two hours to fulfill actual customer orders.
  8. 8. Design of supply chain for optimal flexibility and predictability  Transportation from suppliers to hubs. This takes approximately 30 days.  Movement between hubs and Dell factory . Time taken is about 2 -5 days.  From factory and merge centres, transhipment of final machine is done. Time taken is about 1-7 days depending upon customer.