Dell distribution

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DELL Team member Ritwik Sharma 90 Pratik Patel 62

description

 

Transcript of Dell distribution

Page 1: Dell distribution

DELL

Team memberRitwik Sharma 90

Pratik Patel 62

Page 2: Dell distribution

Founded by: Michael Dell (CEO) in 1984.

The company is well known for its innovations in supply chain

management .

Dell is selling computer systems directly to customers. This direct

business model eliminates retailers that add unnecessary time

and cost, or can diminish Dell's understanding of customer

expectations.

Round Rock, TX, United States of America

INTRODUCTION

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The direct model allows the company to build every

system to order and offer customers powerful,

richly-configured systems at competitive prices

PRODUCTS:- Laptop, Servers, Data Storage Devices, Network

Switches, Software, and Computer peripherals.

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There are more than 65 supplier for Dell

Some of the suppliers

◦ Logitech

◦ NVIDIA

◦ Compeq

◦ Coolit System

◦ Delta Product

◦ Pegatron

◦ Alpha and Omega

Dell Current Suppliers

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Dell choose it supplier carefully and if those

supplier don’t keep up, they are out

Dell goes for bigger supplier

There message is clear: Dell ways or the

highway

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Dell’s new and improved design for a channel distribution model:

Order processing

Pre-production

Accessories ready

Configuration

Test

Boxing

Distribution preparations

Shipping(transportation)

DELL LOGISTICS NETWORK

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Optimize inbound and outbound

transportation networks

Collaborate with the best logistics

and transportation providers

Mode of transportation –

By Ship

By Rail

By Air

“GREEN” INITIATIVES

TRANSPORTATION SYSTEM DESIGN

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Dell has competitive advantage of lowest in the Industry

cost structure, and this cost Structure due in part to DELL

raw materials management strategy.

 e-VMI(Vendor management inventory) and JIT combination of

management techniques

Increasingly zero inventory. Dell receives the exact

material every two hours to fulfill actual customer orders.

Dell’s factories have only 7 hrs worth of inventory .

The original parts are directly sent to the assembly line

STORAGE

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DISTRIBUTION

LENGTH OF SUPPLY CHAIN

Supplier

Factory Warehouse

Customer

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Dell has six production unit : Austin, Texas, USA

Nashville, Tennessee, USA

Eldorado do Sul, Brazil

Penang, Malaysia

Xiamen, China

Limerick, Ireland

Chennai .India

They carry large quantities of different products, to increase their leverage when

dealing with their customers.

90% supplies ordered online using integrated websites of supplier and Dell (B2B).

DISTRIBUTION

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Virtual integration

Innovation on the assembly floor

Disintermediation (cutting out the middleman)

Enhancing customer value

Continued….

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CASH: Dell maintains a negative cash conversion cycle

means the payment receive for product before it has to

pay for material.

COST: Dell’s direct sales and build-to-order model has

achieved superior performance in the PC industry in

terms of inventory turnover, reduced overhead, cash

conversion, and return on investment

Benefits to company by such distribution

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Bypassing the reseller channel that causes further cost

reduction to company.

CRM: Direct customer relationship is the key to Dell’s

business model .

DEMAND FORECAST: Dell additional advantages is try

to forecast demand and ship products based on those

forecasts.

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Tailored offerings from Dell in terms of add-

on products and services.

Very customizable systems at an affordable

rate, since Dell manufacturing builds

specifically for each customer.

Benefits to customer by such distribution

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Dell demand price cut form the component

supplier

Dell - Take the Money and Run

Dell shares fell more than 30 percent over

the five years before the company

announced its sale plans in February

Conflict

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Entering the server business

Dell’s problems caused due to faulty chips on its

computers

Product problem (Power supply)

Dell’s Price Fixing Claims Against Display Panel

Suppliers

Worker Dispute Halts Production at Chinese

Electronics Plant

Difficulties/Challenges

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Different suppliers and partners involved, the location

decisions of these companies naturally vary by company and

location

Many parts and components are manufactured in Asia and

shipped to distribution centers near Dell facilities

This is usually the case for hard disk drives, floppy drives,

power supplies, CD-ROM drives, cables and connectors, and

many add-on cards such as modems, sound cards and video

cards

Difficulties/Challenges(Contd..)

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Fullerton -- a Scottish company from Glenrothes that

does work for Dell and for IBM in Raleigh, NC;

Lightening Beech - a U.S. company that supplies

sheet metal;

Trend Tec--a company that does metal and plastics in

the U.S. and serves Dell and Compaq; and APW,

which bought two Irish companies and does chassis,

plastics, and metal

Example

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For some specific components and peripherals, the locations are as

follows:

◦ Monitors- Europe and Asia (Phillips, Nokia, Samsung, Sony, Acer)

◦ PCBs- Asia, Scotland, and Eastern Europe (SCI, Celestica)

◦ Drives- Asia, mainly Singapore (Seagate, Maxtor, Western Digital)

◦ Printers- Europe (Barcelona)

◦ Box -builds Asia and Eastern Europe (Hon Hai/Foxteq)

◦ Chassis- Asia and Ireland (Hon Hai/Foxteq)

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First, Dell requires that suppliers locate material

within a specified delivery time from its

assembly plants.

Asian suppliers (and U.S. suppliers producing in

Asia, such as disk drive makers) maintain

supply hubs near Dell assembly plants

worldwide, where material is pulled as it is

needed for production.

Dell major impact on its supplier

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Second Dell requires that its suppliers

continually reduce the price they are

charging Dell;

In exchange it agrees to reward these

suppliers with larger orders and longer-term

contracts

Contd..

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Third Dell requires that suppliers have

adequate inventory to supply the needs of

its direct, build-to-order production model

Dell makes extensive use of outsourcing,

but claims it will never outsource the final

assembly of configure-to-order products

Contd..

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Dell only entered the PC business in 1985, it has become a

global company with global production networks spanning

the three major world regions

Dell has organized its operations by region and by country

Headquarters offices, assembly production and call

centers are centralized within each region (although not all

in the same country),

whereas sales, service and support are decentralized to

individual countries.

Conclusion

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Thank You