Dell uses a build-to-order inventory model where it receives customer orders and money before building products to ensure customization. It uses "revolvers" or supplier warehouses near its assembly plants to buffer long supplier lead times. Dell also uses a "value chain" program for collaborative information sharing with suppliers. This just-in-time model reduces costs from avoiding excess inventory and obsolete goods while allowing Dell to introduce new products and target low prices.

1. INVENTORY
MANAGEMENT
An inventory management on Dell Corporation

2. OUTLINE
 What is inventory management?
 Reasons for keeping inventory in Industry or Company
 Background of DELL
 Products of dell & product lines of Suppliers
 Mission statement of DELL
 Dell business model & Business functions of DELL
 Inventory model of DELL &- instrument of DELL inventory
management
 Verify discussion of instrument of dell inventory management
-Build to order
-Revolver
-Value chin program
 Advantage of this model & Increasing opportunity of DELL
product
 Conclusion

3.  Inventory management is a discipline and
primarily about specifying the shape and
placement of different types of goods in
stocked. It is required at different locations
within a facility or within many locations of a
supply network to precede the regular and
planned course of production and stock of
materials.

4. There are five basic reasons for keeping an inventory.These are –
 Time -The time present in the supply chain, from supplier to user at every stage, requires
that you maintain certain amounts of inventory to use in this lead time.
 Seasonal demands: demands varies periodically, but producers capacity is fixed.This
can lead to stock accumulation, consider for example how goods consumed only in
holidays can lead to accumulation of large stocks on the anticipation of future
consumption.
 Uncertainty - Inventories are maintained as buffers to meet uncertainties in demand,
supply and movements of goods.
 Economies of scale - Ideal condition of "one unit at a time at a place where a user needs
it, when he needs it" principle tends to incur lots of costs in terms of logistics. So bulk
buying, movement and storing brings in economies of scale, thus inventory.
 Appreciation inValue - In some situations, some stock gains the required value when it is
kept for some time to allow it reach the desired standard for consumption, or for
production.

5. Background of DELL
 Dell is a multinational computer technology company based
in Round Rock, Texas.
 Michael Dell is the founder and CEO of Dell Technologies
and started the company in 1985.
 In 1992 Fortune magazine included Dell computer
corporation in its list of the world’s 500 largest companies
 In 2015, Dell was the third largest PC vendor in the world
after Lenovo and HP Inc.
 In 2016, Dell was the No. 1 shipper of PC monitors in the
world.

6.  Desktop computers
 Notebook computers
 Network servers
 Scanners
 Printers
 Workstations
 Storage products
 Dell offers a total of 1.6 million different
possible production figurations for all its.

7. Product lines SUPPLIERS
 MICROSOFT - for Windows
 INTEL - for micro processors
 NVIDIA - for Graphic chips
 SONY - for monitors
 Also There are 7 technology leaders now working together under DELL. they are
for Innovative PCs & devices
for IT solutions
for software development

8. Security
solutions
&
Cloud solutions
Business mobility

9. DELL BUSINESS MODEL
 Dell operated as a pioneer in the “configure to order”
approach to manufacturing - delivering individual PC
configured to customer specifications
 To minimize the delay between purchase and delivery,
Dell has a general policy of manufacturing its
products close to its customers.
 Low inventory is another signature of the Dell
business model - a critical consideration in an
industry where components depreciate very rapidly.

10.  Customer satisfaction: Dell satisfies their customer by
providing their superior customer service.
 Team satisfaction: Management and employees of
Dell inc. are committed to cooperating as a team for
the purpose of profitability and gratification of a job
well done.
 Community Satisfaction: Dell provides jobs in a clean,
safe, environmentally sound atmosphere and be an
active participant in community affairs.

11.  Direct Sales
 Inventory Management
 Supplier Integration

12. INVENTORY MODEL OF DELL &- INSTRUMENT
OF DELL INVENTORY MANAGEMENT
 Dell has follow VENDOR-MANAGED-INVENTORY (VMI)
arrangement with its suppliers
 Suppliers decide how much inventory to order & when to order
while Dell sets target inventory levels & records suppliers’
deviations from the targets.
 Dell withdraws inventory from the revolvers as needed -- on
average every two hours
 It uses a quarterly supplier scorecard to evaluate how well each
supplier does in maintaining this target inventory in the revolver.
 Build to order
 Revolver
 Value chin program

13. BUILD TO ORDER
 Dell first receives the order and the money and only
then starts to build, using that money to purchase
from supplier
 Therefore there is customization of products for each
and every customer.
 While other companies had to guess, DELL knew
exactly what its customers wanted before
manufacturing the product
 Others had to maintain inventory as there existed
middlemen, so to supporter seller and retail channels.

14. REVOLVERS
o To compensate for long lead times & buffer against demand
variability, Dell requires its suppliers to keep inventory on
hand in the revolvers.
o Revolvers or supplier logistics centers (SLCs) are small
warehouses located within a few miles of Dell’s assembly
plants
o Each of the revolvers is shared by several suppliers who pay
rents for using their revolver
o Dell does not own the inventory in its revolvers; this
inventory is owned by suppliers .

15. VALU CHIN PROGRAM
 Value Chain is intended to extend Dell’s successful
direct-sales approach back in to the supply chain
 The goal of it is increasing the speed and quality of
the information flow between Dell and its supply
base
 The portal, valuechain.dell.com acts a secure
extranet for Dell suppliers to collaborate in managing
the supply chain
 Dell envisions using this site to exchange with
suppliers current data, forecasted data, new product
ideas, and other dynamic information

16. ADVANTAGE OF THIS MODEL
 Returns grew Slightly as the carrying costs and obsolete
stock is avoided.
 Saves LARGE amounts of money on purchasing
components because the component prices drop by 3
percent per month
 Reduces handling cost. Common factors that drive up
holding costs include opportunity costs, increased rent
required for the space of the inventory, higher premiums to
insure the inventory, and cost of obsolete goods.

17.  Introducing many new products to its product
line.
 selling low cost, low price computers to PC
retailers .
 Dell cuts out the retailer and suppliers
directly to the customers. It uses information
technology and Customer Relationship
Management approaches to capture data and
its loyal customers.

18. Conclusion
Vendor Managed Inventory gives the vendor (DELL) in
a vendor/customer relationship the ability to monitor,
plan and control inventory for their customers. Also
consumers benefit from knowledgeable store staff who
are in frequent and familiar contact with manufacturer
(vendor) representatives when parts or service are
required.
Store staff have good knowledge of most product lines
offered by the entire range of vendors. They can help
the consumer choose from competing products for
items most suited to them and offer service support
being offered by the store. With VMI, businesses
maintain a proper inventory, and optimized inventory
leads to organizational efficiency.