The Dell Supply Chain Transformation

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The Dell Supply Chain Transformation

  1. 1. Powerpoint Templates THE DELL’s SUPPLY CHAIN TRANSFORMATION by Roslinda Perangin-angin
  2. 2. OUTLINE <ul><li>Webinars broadcasted by </li></ul><ul><li>Dell Background </li></ul><ul><li>The Case for Change </li></ul><ul><li>Supply Chain Segmentation </li></ul><ul><li>Dell’s Segmented Supply Chain </li></ul><ul><li>Keys to Successful Transformation </li></ul><ul><li>The Supply Chain Television Channel (www.sctvchannel.com) </li></ul>
  3. 3. Dell Background: <ul><li>Dell by the Numbers </li></ul><ul><li>Fortune 40 Company </li></ul><ul><ul><li>$61.5 billion FY11 Revenue*: $4.1billion FY11 Operating Income** </li></ul></ul><ul><li>Online Leader </li></ul><ul><ul><li>65 customer interactions per second; 5.4 million discussion per day; 2 billion interactions annually </li></ul></ul><ul><li>Corporate Responsibility </li></ul><ul><ul><li>Ranked #1 on Newsweek’s 2010 list of the Greenest Companies in America </li></ul></ul><ul><ul><li>Received the 2010 Greneest Supply Chain Award in China </li></ul></ul><ul><li>IT Services Leader </li></ul><ul><ul><li># 1 healthcare services provider; support over 50% of U.S. hospitas and 60% of classrooms; top provider to U.S. colleges and universities </li></ul></ul><ul><li>Partner to Business </li></ul><ul><ul><li>98% of Fortune 500 do business with Dell. #1 PC provider to large enterprises and public sector organizations. #1 computer provider to SMB’s </li></ul></ul>
  4. 4. Dell Background (cont’d): Dell’s Products
  5. 5. Dell Background (cont’d): <ul><li>Enterprise Solutions & Service Transformation </li></ul><ul><li>Extending core capabilities and growing solutions mix </li></ul><ul><li>Continue to expand enterprise services, solutions and storage </li></ul><ul><li>capabilities </li></ul><ul><li>Making sustained organic and inorganic investments while building </li></ul><ul><li>an IP portpolio </li></ul><ul><li>Creating optimal solutions for customers that are Open, Capable, and </li></ul><ul><li>Affordable </li></ul>
  6. 6. The Case for Change: <ul><li>Dell’s Supply Chain </li></ul><ul><li>Procurement </li></ul><ul><li>$38 billion annual supply chain purchase </li></ul><ul><li>$2 billion annual diverse supplier spend </li></ul><ul><li>Inventory Management </li></ul><ul><li>9 days sales inventory </li></ul><ul><li>-33 days cash conversion cycle </li></ul><ul><li>Global Reach </li></ul><ul><li>180 countries served </li></ul><ul><li>Manufacturing </li></ul><ul><li>5 Dell owned factories globally + extensive partner network </li></ul><ul><li>Provide factory customization to thousands of customers everyday </li></ul><ul><li>Logistics </li></ul><ul><li>> 1 systems shipped per second </li></ul><ul><li>47+ supply chain nodes </li></ul>
  7. 7. The Case for Change (cont’d): Dell’s Supply Chain Transformation
  8. 8. Supply Chain Segmentation <ul><li>Customer Value Proposition </li></ul><ul><ul><li>Product Innovation </li></ul></ul><ul><ul><li>Product Selection and Availability </li></ul></ul><ul><ul><li>Price and Brand </li></ul></ul><ul><ul><li>Value Added Services </li></ul></ul><ul><ul><li>Customer Experience </li></ul></ul><ul><li>Product characteristics </li></ul><ul><li>Channels to market </li></ul>
  9. 9. Supply Chain Segmentation (cont’d) Customer Value and Operations Strategy
  10. 10. Supply Chain Segmentation (cont’d) <ul><li>The Challenges </li></ul><ul><li>Mismatch between the strategies suggested by different </li></ul><ul><li>customer value propositions, product characteristics & </li></ul><ul><li>channels </li></ul><ul><li>- Push vs Pull </li></ul><ul><li>Different products, channels and customer types require </li></ul><ul><li>different supply chain strategies </li></ul><ul><li>- Stores vs Online </li></ul><ul><li>- Individual Consumers vs Corporate </li></ul><ul><li>Need to take advantage of synergies accross different </li></ul><ul><li>segments </li></ul><ul><li>- Reduce Complexity </li></ul><ul><li>- Benefit from Economies of Scale </li></ul>
  11. 11. Supply Chain Segmentation (cont’d) Channel Type: Retail vs Online
  12. 12. Supply Chain Segmentation (cont’d) Channel Type: Corporate Client vs Individual Consumers
  13. 13. Supply Chain Segmentation (cont’d) Case Study: The PC Industry – Retail vs Online
  14. 14. Supply Chain Segmentation (cont’d) Characteristics of Push and Pull Supply Chain
  15. 15. Dell’s Segmented Supply Chain Evolve the Supply Chain
  16. 16. Dell’s Segmented Supply Chain ENGAGE THE ENTIRE ORGANIZATION Transformation is End-to-End
  17. 17. Dell’s Segmented Supply Chain Americas Fulfillment Nodes – Direct Ship
  18. 18. Dell’s Segmented Supply Chain Americas Fulfillment Nodes – Retail/Channel
  19. 19. Dell’s Segmented Supply Chain Americas Fulfillment Nodes – Build to Stock
  20. 20. Dell’s Segmented Supply Chain Americas Fulfillment Nodes – Current State
  21. 21. Keys to Successful Transformation
  22. 22. Keys to Successful Transformation <ul><li>Focus on Goals </li></ul><ul><li>Provide customers choice they value </li></ul><ul><li>Transform end-to-end </li></ul><ul><li>Chart a clear course and benefit </li></ul><ul><li>Simplify products </li></ul><ul><li>Eliminate complexity </li></ul><ul><li>Get better, faster, simpler </li></ul><ul><li>Relentless focus on continuous </li></ul><ul><li>Engage the entire organization </li></ul>

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