Dell Supply Chain Analysis
lysDell Supply Chain Analysis
Group 11: Mentor: Heidi C. Dreyer Sep-09-2012
Outlines
• What’s direct model? • Dell’s position in PC market; – Dell’s competitive strategies; – Implied demand uncertainty analysis; • Dell’s supply chain capabilities; – Facilities; – Inventories; – Transportations; – Information; – Sourcing; – Pricing; – Responsive supply chain; • Strategic fit; • Limitations; • Challenge and proposals for emerging markets;
What’s Direct Model?
Several supply chain models in push/pull view
Make to stock(HC, Lenovo)
Build-to order (Direct Model)
Push production
Pull production
Dell’s Position in PC market
Service level: high customization, etc
Competitive Strategy: Dell chooses the customers who prioritize
Variety: high product variety Quality: reasonable quality
Price: reasonable price Lead time: approximately one week
Implied Demand Uncertainty
Impact of customer needs on implied demand uncertainty
Conclusion: The competitive strategy in meet high variety and service level contribute to Dell’s high implied demand uncertainty.
Dell SC Capabilities
1.Facilities
2.Inventory
3.Transportation
4.Information
5.Sourcing
6.Pricing 7.Customer service
Facilities
• Location: Regional approach, suppliers’ facilities built next to door • Capacity: Lowest raw material shipping time, perform intended functions, little excess capacity will be more efficient per unit; high-utilization facility difficult to respond to demand fluctuations ， customer could conveniently send orders via internet and telephone. Summary: Dell’s facilities strategy reduce inbound shipping time, and the logistics cost, and increase service level.
Inventories
• Safety Inventory: on-site inventories to copy with the next few hours of orders • Seasonal Inventory:
• Level of Product Availability(time): High Level and just-in-time Delivery 4 days across the entire operation Summary: Dell’s low inventories strategy
Group 11: Mentor: Heidi C. Dreyer Sep-09-2012
Outlines
• What’s direct model? • Dell’s position in PC market; – Dell’s competitive strategies; – Implied demand uncertainty analysis; • Dell’s supply chain capabilities; – Facilities; – Inventories; – Transportations; – Information; – Sourcing; – Pricing; – Responsive supply chain; • Strategic fit; • Limitations; • Challenge and proposals for emerging markets;
What’s Direct Model?
Several supply chain models in push/pull view
Make to stock(HC, Lenovo)
Build-to order (Direct Model)
Push production
Pull production
Dell’s Position in PC market
Service level: high customization, etc
Competitive Strategy: Dell chooses the customers who prioritize
Variety: high product variety Quality: reasonable quality
Price: reasonable price Lead time: approximately one week
Implied Demand Uncertainty
Impact of customer needs on implied demand uncertainty
Conclusion: The competitive strategy in meet high variety and service level contribute to Dell’s high implied demand uncertainty.
Dell SC Capabilities
1.Facilities
2.Inventory
3.Transportation
4.Information
5.Sourcing
6.Pricing 7.Customer service
Facilities
• Location: Regional approach, suppliers’ facilities built next to door • Capacity: Lowest raw material shipping time, perform intended functions, little excess capacity will be more efficient per unit; high-utilization facility difficult to respond to demand fluctuations ， customer could conveniently send orders via internet and telephone. Summary: Dell’s facilities strategy reduce inbound shipping time, and the logistics cost, and increase service level.
Inventories
• Safety Inventory: on-site inventories to copy with the next few hours of orders • Seasonal Inventory:
• Level of Product Availability(time): High Level and just-in-time Delivery 4 days across the entire operation Summary: Dell’s low inventories strategy