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Dell Supply Chain Analysis

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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

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