Michael Dell
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Michael Dell founded Dell Inc. in 1984 with $1000 and built it into a global technology company through a direct sales model. Dell commits to building direct relationships with customers to understand their needs and customize computers accordingly. Dell also focuses on supply chain management and builds computers based on actual customer orders rather than forecasts to minimize inventory costs. Through segmentation, Dell tailors its offerings to different customer groups. Dell's success demonstrates the value of innovation, collaboration, and accepting risks and failures that come with change.
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Michael Dell
- 1. Michael Dell Presented By: Jigisha Dave Submitted To: Prof. Sakunt Jadav
- 2. “It’s amazing to me that our competitors think the customer is the dealer.” Michael Dell “Sales Leader: Tops in Global Basis.”
- 3. Introduction • Michael Dell: “The only constant thing about business is that every-thing is changing. We have to take advantage of change and not let it take advantage of us.”
- 4. Introduction about Michael Dell • Michael Saul Dell (born February 23, 1965) is an American business magnate and the founder, chairman and chief executive officer of Dell Inc. • He is the 44th richest person in the world, with a net worth of US$14.6 billion in 2011.
- 5. Introduction • • • Michael Dell is the chairman of the Board of Directors of Dell, the company he founded in ’84 for $1,000. With an unprecedented idea---build relationships directly with consumers (born in February ‘65). Dell’s commitment to consumer value, to the team, to being direct, to operating responsibly and, ultimately to winning. Continues to differentiate Dell from other companies.
- 6. Dell Inc.- Company Intro • CEO: Michael Dell • Registered as 'PC's Limited‘ in 1984 • From his condominium in Austin, TX • Capital: $1,000 • Sold IBM PC-compatible computers
- 7. • Known for its innovative customer service and product custom configuration • Dell’s collaboration with other computer software companies has allowed it to become a leader in CRM • It is not an inside-out company but outside-in
- 9. Mission “To be the most successful computer company in the world at delivering the best customer experience”
- 10. Dell Business Strategy • Faster inventory turnover and reduced inventory levels • Incorporate new technologies and components into its product offerings. • Online support to onsite customer-dedicated systems
- 11. Highlights for direct model and crm • Contacting with the customer directly & capturing as much information as possible • Eliminating middlemen • Building computers based on customer’s needs. • Engaging with customer on each touch point as productive & efficient as possible.
- 12. Dell’s Direct Model • • • • • • Direct relationship, most efficient path Low cost and best value Built to order Customized systems Superior, tailored service and support Highest quality and most relevant technology
- 13. Dell’s Value Web Model
- 14. Why SCM is so Important in PC business • Material costs • Improving SCM • Changing technology • Rely on market forecasting to drive Production. • Technological breakthroughs cause very short Product life cycles .
- 15. Competitors’ Disadvantages vis-à-vis Dell • Need to hold inventory • Have to pay suppliers first • Caught with short supplies • Stuck with excess inventories • Product time to market is critical.
- 16. Dell’s Competitive Advantages Dell is having one of the best SCM in the world. • 90% supplies ordered online using integrated websites of supplier and Dell (B2B). • 95% of suppliers situated very close to assembly plant hence coordination is easier. • Dell’s factories have only 7 hrs worth of inventory for most items whereas industry wise it is around 10 days. • 15 suppliers provide almost 85% of all supplies. • Dell gets paid by customers and then pays to its suppliers.
- 17. i2 SCM S/W package • i2 serves almost 70% of the SCM market. • 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 . • Instead of forecasting the daily supply needed, Dell receives the exact material every two hours to fulfill actual customer orders. • Tracks backlog numbers, stock status and supplier commitments
- 19. Business To Business (B2B) Model • Business model for dealing with large business entities. • Server- to- server communication over internet integrating both supplier & buyer system. • Shopping online with customer’s ERP Procurement Application with simultaneous upgradation. • No duplicate information entry. • Easy process, less cycle time, less errors.
- 20. Dell’s Objectives With B2B Integration • To quickly integrate customers who are capable today. • Built a solution to integrate any customer who supports open industry standard of XML,EDI • To help customers built a B2B solution for rapid deployment & connectivity. • Providing hardware, software & consultation to help build a system which not only connects to Dell but even to other suppliers.
- 21. DELL’S CRM STRATEGY Make segmentation and identify customers Listen to their customers Learn from customers Each member is a student who is responsible of learning from the customers.
- 27. Online support:
- 29. Sales force CRM Media presence
- 31. Segmentation • Backbone of Dell computers • Based on segmentation, company takes its positioning and modifies its offerings for each segment’s customers. “An Important element of virtual integration with customers is segmentation. The finer the segmentation, the better able Dell is to forecast what customers are going to need and when. Then coordination of flow of strategic information comes to stage all the way back to suppliers, effectively substituting information for inventory”
- 32. • Focusing on Personal Users – In the early 2000s, Dell attempted to diversify its business by targeting personal consumers, such as families and students that needed to purchase computers • Dell's Retail Strategy – In the fall of 2007, Dell announced partnerships with major computer retailers, including WalMart, Best Buy and Officeworks
- 34. Marketing Mix • • • • Product - Customization Price - Reasonable Place - location strategy Promotion - "Be Direct"
- 35. Ad Agency • In 2007 BBDO to Working Mother Media • Continue Change in Slogan – “Work it Out” – “Yours is here”
- 36. Dell Dude • Benjamin Bowmar Curtis • an American actor and former spokesman for Dell Computers. • from 2000 to 2003. • "Dude, you're getting a Dell.“ • The campaign was a huge success and not only helped bring prominence to Dell, but to Curtis as well.
- 38. • social media content: You do not own the content you create… your customers do Producing content via the same social media tools your customers use allows 3 things: 1) Makes your content sharable 2) Gets your content to customers where they are 3) Gives you a reason to connect with fans
- 39. SOCIAL WEB STARTING TO EVOLVE How do we reach customers in different social networks? We’re still in the early stages of the social web Shared ID options Dell on other sites Forrester’s Five Eras of the Social Web Jeremiah Owyang
- 40. Zero Concept at Dell • • • • • • Zero time organization Zero value-gaps, Zero-learning-gaps, Zero-management-gaps-gaps, Zero-process-gaps, and Zero inclusion-gaps.
- 41. CSR - Green initiatives • Establish a product-recycling program. • On February 6, 2007, the National Recycling Coalition award. • Dell Bans E-Waste Exports • Bamboo — Nature's Eco-Friendly Packaging Solution
- 43. LESSONS FROM MICHAEL DELL 1. Every customer is important, regardless of size 2. Innovation is incremental and continual 3. Innovators are their own market research departments 4. Collaboration leads to the best ideas 5. Customers want to help their peers 6. Don’t decide alone for your customer
- 44. LESSONS FROM MICHAEL DELL 7. Participation is powerful 8. Follow through is the middle name of collaboration 9. Become your own incubator 10. Realize that innovation and collaboration are cousins
- 45. Success Mantra – Michael Dell • “When you get a business that changes very quickly, you get some of that naturally.” • “You just have to change. To be successful, what you have to do is have an acceptance of risk and you have to be pretty explicit about that, because if you don’t accept risk, you don’t get any innovation. And that means part of risk is you have to accept failure because not everything works.”
- 46. Conclusion “Be willing to take risks and change,” if you want to stay successful
Editor's Notes
- at each step in value chain .before getting paid from customers .of hot products- lost sales.of slow selling products .With about 2,000 product transitions a year, the ability to reduce
- Since its inception, Dell has thrived by challenging conventional business wisdom. By taking direct-to-customer and build-to-order techniques to a global scale, Dell has earned a reputation for delivering exactly the right products on schedule, and at a competitive price. The result is that Dell does not begin assembling a single computer until the company has an order from a specific customer. The order may be for an individual, a small business looking for a few PCs, or a major corporation or government agency that needs thousands of specially-configured servers, storage products, notebook computers orother products delivered to field locations worldwide. Everyassembled computer has a waiting customer and a short lead-time delivery date. The success of this approach is reflected in Dell's expected US$6.5 billion growth this year. As the company has grown, so has the challenge of balancing evolving computer preferences and demand with a volatile marketplace for the materials and components the company needs to build the computers. To compound the problem, changing technology obsoletes those materials sometimes as rapidly as 2% of value per week. In true Dell fashion, the company chose a completely new solution for an old problem and once again reinvented its supply chain. Here's how it works. Through a suite of web-based applications, Dell is now linked with its core suppliers. This new system automatically converts Dell's sales orders into materials requirements. These requirements are then instantly communicated to suppliers, whose stocking locations are situated no more than thirty minutes from the Dell factory. Those suppliers use an Internet portal to view therequirements and confirm their ability to commit their own inventory to Dell as the orders are placed. As Dell factories receive orders and schedule assemblies, a "pull" signal to the supplier triggers the shipment of only the materials required to build current orders, and suppliers deliver the orders directly to the appropriate Dell assembly lines. The factory schedule is refreshed every two hours. As a result, when actual demand varies from forecasted demand, all suppliers, factories and logistics providers are quickly and concurrently notified and can adjust their own inventory allocations and production accordingly. Dell's inboundinventory is kept to a minimum, its non-ordered finished goods inventory is kept at zero, customer orders are immediately sent upon completion and customers receive what they ordered on the promised date. The efficiency of Dell's solution has been lauded by business and technology publications alike:"Dell's new approach takes the concept of just-in-time operations to new levels. The company's most efficient factories . . . order only the supplies required to keep production running for the next two hours. As the two-hour clock winds down, suppliers-who keep gear in a warehouse near Dell's factories-are electronically told what to deliver so Dell can build the next two hours' worth of computers."-David RocksBusiness Week Behind Dell's information revolution are a series of projectsdesigned to deliver a leading-edge decision-support system coupling i2 Technology's Rhythm Collaborative Planner, Factory Planner and Supply Chain Planner and Dell's direct-sales model to create enhanced planning and scheduling capabilities. The Dell supply chain management program has delivered a business tool that the people at Dell use to interact more efficiently with their suppliers, helping both Dell and its suppliers to respond to the shifting demand in the marketplace. The ultimate objective of this project was to reduce customer lead-time while creating efficiencies within planning and manufacturing operations. The program has delivered a new business capability which: * Simplifies the jobs of Dell employees who are responsible for managing material supply,* Allows Dell to transact business for specific order-drivenpurchases of materials and supplies,* Provides Dell with a global picture of what supply and demand look like at any point in time,* Gives Dell's planners the ability to focus on exception situations, relieving them of the drudgery of examining every possible supply constraint,* Makes it nearly impossible for components to grow obsolete in warehouses, and* Allows Dell to see potential supply constraints earlier and react quickly to correct an out-of-balance situation. In the case of a global shortage, this may mean offering suitable alternatives to its customers to ensure that they receive the products they need when they need them. Customers always receive the latest technology, exactly how and when they need it, all at a competitive price. This commitment to customer service enables Dell to sustain its leading marketplace position. Business-to-business interaction via the Internet is the main pursuit for many companies in today's electronic environment. But Dell's commitment to its enabling technologies and its willingness to rethink traditional ways of doing business makes it the first corporation to fully leverage the potential of the medium. This new system that Dell has created is the first truly private business-to-business exchange with dynamic supply-chain business transacted on the Web. As noted by The Wall Street Journal, Dell now has: "[some] of the most advanced computer assembly plants in the world if measured by integration with the Internet. Up to 50% of the orders flow directly from customers on the Internet to the aptly named 'air-traffic control room' in the plant where procurement, assembly and shipping are managed. It sits directly above the sprawling main plant floor."-John Dodge Innovative applications of technology seen in Dell's solution include:* Use of complex mathematical models to identify and predict supply constraints,* Advanced collaborative techniques using the Web as a communications medium, and* New methods of synchronizing demand and supply to minimizeinventory and material handling, thereby reducing cycle time.<BR>Within the system, customer orders are reviewed and compared to supplier inventory every two hours. Dell then issues pull orders for only the materials needed to complete the next two hours of order-building, a capability that represents an industry best. This extremely short cycle helps ensure that the very latest customer demand picture is being addressed.
- From – I2 SCM ROI i2’s ContributionEvery 20 seconds, Dell aggregates its orders, analyzingthe material requirements. i2 SCM compares Dell’son-hand inventory with its suppliers’ inventory, thencreates a supplier bill of material to meet its order needs.Dell’s suppliers have 90 minutes to pull the neededmaterials and drive them to Dell’s factory. Dell thentakes 30 minutes to unload the truck and place thematerials – in the precise order in which they willbe manufactured – onto the assembly line.Here's how it works. Through a suite of web-based applications, Dell is now linked with its core suppliers. This new system automatically converts Dell's sales orders into materials requirements. These requirements are then instantly communicated to suppliers, whose stocking locations are situated no more than thirty minutes from the Dell factory. Those suppliers use an Internet portal to view therequirements and confirm their ability to commit their own inventory to Dell as the orders are placed. As Dell factories receive orders and schedule assemblies, a "pull" signal to the supplier triggers the shipment of only the materials required to build current orders, and suppliers deliver the orders directly to the appropriate Dell assembly lines. The factory schedule is refreshed every two hours. As a result, when actual demand varies from forecasted demand, all suppliers, factories and logistics providers are quickly and concurrently notified and can adjust their own inventory allocations and production accordingly. Dell's inboundinventory is kept to a minimum, its non-ordered finished goods inventory is kept at zero, customer orders are immediately sent upon completion and customers receive what they ordered on the promised date.