Dell-operations excellence
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Dell pioneered a direct sales model that eliminated retailers. This allowed Dell to customize PCs based on customer orders, maintain low inventory levels, and quickly incorporate new components. Dell also directly partnered with suppliers to gain supply chain efficiencies. However, Dell may need to provide more diverse products and consider indirect sales channels or mediators to supplement its direct model.
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Dell-operations excellence
- 3. Leadership Problem Teamwork solving IMS-DAVV-MBA FT
- 4. Improves the organization by focusing on Improving Needs of the customer Empowering employees Optimizing existing activities in the process. IMS-DAVV-MBA FT
- 5. OE'S main objective is to reduce operation cost and wastes, without affecting quality, time delivery and cost of products and services one has to offer. IMS-DAVV-MBA FT
- 6. Operational Excellence stresses the need to continually improve by promoting a stronger teamwork atmosphere. Safety and quality improvements for employees and customers lead towards becoming a better enterprise. IMS-DAVV-MBA FT
- 8. An American multinational computer technology corporation based in 1 Dell Way, Round Rock, Texas, United States. Develops, sells and supports computers and related products and services Named on its founder Michael Dell Third largest PC Maker in the world, after HP and Lenovo 41st on Fortune 500 List™. IMS-DAVV-MBA FT
- 9. Traditional Operating Cycle Assembly of PC by Service and support PC Makers (to Fill activities Provided Manufactured Manufactured Purchase By PC order from Suppliers to PC Users by of PC’s Component of PC’s Component and Keep Users reseller (or some PC By Suppliers By Suppliers distribution Channel Makers – IBM to PC stock) users OPERATIONAL CYCLE AT DELL Service and Support Customized Assembly activities Provided to Manufactured of PC’s By PC PC Users either by of PC’s Component Makers as Orders Purchase By PC user PC Makers (via By Suppliers from PC Buyers come Telephone, fax, Email in ) etc IMS-DAVV-MBA FT
- 10. Putting it All Together IMS-DAVV-MBA FT
- 11. Dell basically builds computers to fulfill orders, rather than keeping it for inventory This reduces inventory costs IMS-DAVV-MBA FT
- 12. An order is highly customizable at Dell Because of this, the customer has a large variety of product to choose from. Therefore a customer may get the closest alternative for his demand IMS-DAVV-MBA FT
- 13. Dell directly partnered with its main suppliers Prominent advantages like ◦ Enhanced Branding ◦ Getting volume of Components needed for supply ◦ Developing the brand DELL as an industrial standard, so as to have its own engineers to assist its customers IMS-DAVV-MBA FT
- 14. Dell's just-in-time inventory emphasis yielded major cost advantages and shortened the time it took for Dell to get new generations of its computer models into the marketplace. New advances were coming sofas in certain computer parts and components (particularly microprocessors, disk drives, and modems) that any given item in inventory was obsolete in a matter of months, sometimes quicker. Having a couple of months of component inventories meant getting caught in the transition from one generation of components to the next. Moreover, there were rapid-fire reductions in the prices of components —most recently, component prices had been falling as much as 50 percent annually (an average of 1 percent a week). IMS-DAVV-MBA FT
- 15. Selling direct to customers gave Dell first hand intelligence about customer’s preferences and needs, as well as immediate feedback on design problems and quality glitches. Management believed Dell's ability to respond quickly gave it a significant advantage over rivals, particularly over PC makers in Asia, that made large production runs and sold standardized products through retail channels. Dell saw its direct sales approach as a totally customer- driven system that allowed quick transitions to new generations of components and PC models. IMS-DAVV-MBA FT
- 16. Online Integration with both be supply partners Use of Real-Time, Online transaction processing systems to minimize operational and inventory costs. Customer Support and Problem Solving using DELL’s online support system IMS-DAVV-MBA FT
- 17. Accurate Sales Forecasts Direct contact with Institutional Customers Predicting accurate level of sales in advance about directly connected customers. IMS-DAVV-MBA FT
- 18. The company talked to its customers frequently about "relevant technology” Dell Selects Silicon Valley to Open Research and Development Center Dell improved efficiency using inputs from its Bangalore research centre IMS-DAVV-MBA FT
- 19. For fiscal 2007, Dell spent $498 million, or 0.9 percent of revenue, on R&D. For fiscal 2008, Dell spent $610 million, or 1 percent of revenue, on R&D For fiscal 2009, Dell’s R&D spending was $665 million, or 1.1 percent of revenue. For fiscal 2010, R&D spending was $624 million, or 1.2 percent of revenue. For the year ending 2011, Dell reported R&D spending of $661 million, or 1 percent of revenue. IMS-DAVV-MBA FT
- 20. Fiscal R & D Expenditure (in million dollars) 2007 498 Expenditure 2008 610 2009 665 700 2010 624 600 2011 661 500 400 300 Series 1 200 100 0 2007 2008 2009 2010 2011 IMS-DAVV-MBA FT
- 21. Through listening, Dell learned that customers want the power to do more with technology. Dell's Next Step: The Social Media Listening Command Center IMS-DAVV-MBA FT
- 22. Build a strong foundation on agile IT with virtualization Data Center Virtualization The benefit of data center virtualization IMS-DAVV-MBA FT
- 23. Dell Knows Dell PCs Dell Saves You Time Dell Can Save You Money Dell Keeps You Protected from Accidents Dell Protects Most Everything IMS-DAVV-MBA FT
- 24. As dell is the fast seller but needs to work on green technology Dell by removing the mediators growing very fast pace but sometimes the indirect contact is necessary It should provide more diverse products IMS-DAVV-MBA FT
- 25. IMS-DAVV-MBA FT
Editor's Notes
- Dell built its computers, workstations and servers to order, none were produced for inventory. Dell customers could order custom built server and workstation based on their needs of their applications.This sell-direct strategy meant that Dell had no in-house stock of finished goods inventories and that unlike competitor using traditional value of chain model, it didn’t have to wait for resellers to clear out their own inventories before it could push new models into market
- Dell believed it made much better sense for Dell Computer to partner with reputable suppliers of PC parts and components rather than to integrate backward and get into parts and component manufacturing on its own. The advantages:Using name-brand component enhanced the quality and performance of Dell PC’s.Getting the volume of components it needed the overall market supply.It feasible to have some of supplier engineers assigned to Dell product design team and for them to be treated as part of Dell.Dell’s long-run commitment to its suppliers laid the basis for just-in-time delivery suppliers product to Dell assembly in Texas, Ireland, Penang.
- Dell was using technology and information-sharing with both supply partners and customers to blur the traditional arm's-length boundaries in the supplier- manufacturer-customer value chain that characterized Dell's earlier business model and other direct-sell competitors. Michael Dell referred to this feature of Dell's strategy as "virtual integration."16 On-line communications technology made it easy for Dell to communicate inventory levels and replenishment needs to vendors daily or even hourly. A number of Dell's corporate accounts were large enough to justify dedicated on-site teams of Dell employees. Customers usually welcomed such teams, preferring to focus their time and energy on the core business rather than being distracted by PC purchasing and servicing issues. Dell gave its large customers access to Dell's own on-line internal technical support tools, allowing them to go to www.dell.com, enter some information about their system, and gain immediate access to the same database and problem-solving information that Dell's support personnel used to assist call-in customers. This tool was particularly useful tithe internal help-desk groups at large companies
- Management believed that accurate sales forecasts were key to keeping costs down and minimizing inventories, given the complexity and diversity of the company's product line. Because Dell worked diligently to maintain a close relationship with its large corporate and institutional customers, and because it sold direct to small Customers via telephone and the Internet, it was possible for the company to keep a finger on the pulse of demand—what was selling and what was not. Moreover, the company's market segmentation strategy paved the way for in-depth understanding of its customers' evolving requirements and expectations. Having credible real-time information about what customers were actually buying and having first hand knowledge of large customers' buying intentions gave Dell strong capability to forecast demand.