Supply Chain Management
Network Design in the Supply
A strategic framework for facility location
Gravity methods for location
Plant location models
1. Network Design Decisions
Facility role: What role should each facility play? What processes should be performed at each facility?
Facility location: Where should facilities be located?
Capacity allocation: How much capacity should be allocated to each facility?
Market and supply allocation: What markets should each facility serve? Which supply sources should feed each facility?
(How many plants, DC’s, retail stores, etc. to build?)
Designs, develops, manufactures, markets, services and supports a range of computer systems, including
enterprise systems (servers, storage and networking products and workstations), notebook computer systems,
systems software and peripherals.
Services that help maximize information technology (IT), rapidly deploy systems and educate IT professionals and consumers.
Financing alternatives, asset management services and other customer financial services for its business and consumer customers in the United States through Dell Financial Services L.P., a joint venture between Dell and CIT Group, Inc.
The Company is generally managed on a geographic basis: the Americas, Europe and Asia Pacific-Japan.
Founded in 1984
Employs 83,000 people worldwide
Revenue: 60.70 B
Enterprise Value: 19.2 B
Profit Margin: 3.36%
Founded by Michael Dell
Assemble & market own PCs
Sell through retail outlets
Withdrawn from retail
back to retail channel
Focus on delivering the best possible customer
experience by directly selling computing products
and services online
– Direct customer relationship
– Products and services targeted at distinct customer segments
– Lean manufacturing
– Just-in-time production
– Close relationship with suppliers
6% cost advantage
Detailed customer knowledge
Limited customer reach
Need for strong brand
Go to retail channel in 2007
Market share decreases
– PC shipment unit share : HP 19.1%, 3.9% over Dell.
– 1st quarter, 2007, HP: 28.2% market growth, Dell: -6.9%
Dell’s former CEO Kevin Rollins resigned, Michael
– "The direct model was a revolution. It's not a religion,"
A lot of customers still want to see and touch before
putting down their hard earned money
PC Market Shares in 2013 (US)
PC Market Shares in 2013
– Companies buying at least $1M annually (Fortune 1000)
– 60-70% of total sales
– Devoted sales representatives
– Small & medium enterprises
– Individual customers (home & office)
Public & international customers
Order -> configuration
Kitting: chassis + spec sheet
– Cables, connectors, motherboard, memory from inventory
– Other required modules (HD, CD-ROM, DVD, etc.)
Power & test
Business Process Improvement
– Various models share components
15 key suppliers (85% of materials)
World class quality
Warehouses 15 mins away from Dell factories
2 hours of inventory
– 2hrs for assembly
Generic Business Strategies
Cost leadership: focus on gaining advantages by reducing its economic costs below the costs of its competitors
Economies of scale
- volume of production
- specialized machines
- cost of plant & equipment
- employee specialization
Please join StudyMode to read the full document