Rifat Humayun's presentation discusses Dell's supply chain management. It outlines Dell's direct sales model, focusing on building computers to order with just-in-time inventory and strong supplier partnerships. This allows Dell to customize PCs for customers while keeping costs low. The presentation also examines Dell's customer segmentation, global logistics network, key suppliers like Intel and Microsoft, and how Dell's direct model contributed to its success against competitors like Compaq.

1. “IN THE NAME OF ALLAH,
THE MOST BENEFICENT, THE
MOST MERCIFUL”

2. PRESENTED BY: RIFAT HUMAYUN
SUBJECT : SUPPLY CHAIN
MANAGEMENT
MS MANAGEMENT SCIENCES
RIPHAH INTERNATIONAL UNIVERSITY

4. “THE IDEA OF BEING ALL THINGS TO ALL PEOPLE IS A
THING OF THE PAST”.
MICHEAL DELL.

5. “TO BE THE MOST SUCCESSFUL COMPUTER
COMPANY IN THE WORLD AT DELIVERING
THE BEST CUSTOMER EXPERIENCE”
Mission

6. HISTORY
• Founded by 19-year-old Michael Dell in a dorm
room, grew by more than 50% a year over
1995-1998.
• Dell produces custom build PCs in a matter of
hours and producing no PC component it could
sustain a large portion of PC market comparing
to IBM, HP, Compaq, Hitachi, Sony.

7. • Dell Computer Corporation designs, develops, manufactures, markets, services and
supports a wide range of computer systems, including desktop computer systems,
notebook computers and enterprise systems (includes servers, workstations and
storage products), and also markets software, peripherals and service and support
programs.
• The Company is managed on a geographic basis.
• The three geographic segments are the Americas, Europe, and Asia-Pacific and
Japan.

8. DELL’S SUCCESS
Dell’s success is a combination of:
Direct Sales
Inventory management
Suppliers integration
Together these allow for maximum differences with minimum cost.

9. CORE ELEMENTS OF STRATEGY
• Mass Customization
• Partnership with Suppliers
• JIT(JUST IN TIME)
• Market Segmentation
• Customer service
• Extensive data and information sharing with both supply partners and customers.

10. DELL IN DIRECT MODEL
INDIRECT CHANNELS
Reseller Customized
the PC to customer
requirements,
installed components
and provided
additional service and
support.

11. DELL DIRECT MODEL
The Direct Model
•Direct Sales From the PC
manufacturer to the corporate
customer or consumer.
•Bypassing the dealer channel,
selling directly to consumer
•Focus on Speed of Execution
and Minimum Inventory

12. DELL DIRECT MODEL
• The Direct Model Characteristics
Eliminate costs and risks of carrying large finished good inventories
High velocity
Low-cost distribution
Direct customer relationship
Build-to-order
Just-in-time manufacturing
Products and Services aimed at specific market segments

13. PRODUCT LINE
DesktopsLaptops & notebooks
Mobile phones & Devices
Printers & InkElectronics & Software
HDTVs & Home theater

14. DELL DIRECT MODEL
• Customers And Segmentation
Transactional
Individuals or businesses who make transaction-by-transaction
buying decision - based on the Economics of the purchase
Focus on performance, specification, featured, reviews, awards
Relationship
Based on “total cost of ownership” TCO and price is a secondary
concern. Like business, government or education accounts in
medium-to-large organizations. Focus on service, reliability, vendor reputation and
standardization

15. CUSTOMER SEGMENTATION

16. KEY PRINCIPLES OF DELL
Managers spoke of a few key principles that were fundamental to their business. These
included:
•· Exchange inventory for information
•· Velocity, value and volume
•· Constant change
•· Criticality of coordination
•Knowing the customer is the foundation for creating value
•· Going from the physical to the virtual world creates barriers to entry

17. THREE MODELS OF PERSONAL
COMPUTER INDUSTRY VALUE CHAINS

18. KEY FACTORS TO SUCCESS
• Product feature
• Market share
• Established brand name
• Financial position
• Price Competitiveness
• Low distribution costs
• Shorter delivery time
• Global distribution network
• Support and services

19. • Companies such as Dell that are industry leaders in Internet
commerce will be able to expand their customer base and increase
their business with existing companies at a low marginal cost. They
also can reduce the cost of coordinating their supply chain through
electronic linkages. This will enable them to offer incentives to
customers and suppliers
to do business electronically and continue to drive their own costs
down.

20. SUPPLIERS OF DELL
• There are more than 65 supplier for Dell
• Some of the suppliers
• Logitech
• NVIDIA
• Compeq
• Coolit System
• Delta Product
• Pegatron
• Alpha and Omega

22. SUPPLIERS OF DELL
• Microsoft------ For windows
• Intel----For Micro processor
• NVIDIA------For Graphic chips
• Sony-------For Monitors

23. SUPPLIERS SELECTION AND EVALUATION
• Quality
• Price
• Delivery
• Response to feed back
EVALUATION:
To measure performance uses suppliers score
Cost
Delivery
Availability of technology
Ways in which they did business with dell over the internet.

24. DELL LOGISTICS NETWORK
 Dell’s new and improved design for a channel distribution model:
 Order processing
 Pre-production
 Accessories ready
 Configuration
 Test
 Boxing
 Distribution preparations
 Shipping(transportation)

25. TRANSPORTATION SYSTEM
DESIGN
Optimize inbound and outbound transportation networks
Collaborate with the best logistics and transportation providers
Mode of transportation
 By Ship
 By Rail
 By Air

26. Virtual integration
Innovation on the assembly floor
Disintermediation (cutting out the middleman)
Enhancing customer value
CONTINUED….

28. PRODUCT MIX

30. COMPARISON BETWEEN COMPAQ AND DELL
SALES MODEL

31. THANK YOU.