Dell Case Study Smis

7/24/2019 Dell Case Study Smis

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Case Study


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INTRODUCTION

Dells operation strategy is based on a build-to-order production system.

Dell relies on unique supply chain strategy that gathers large volume ofcustomer information through its direct sales model.

To successfully forecast demand, Dell maintains a constant flow of data in

two information loops: one between customers and the Dell sales team,

and the other among sales, procurement, and suppliers.

The information Dell receives from suppliers tells its sales team what

products it can effectively promote.

To successfully forecast demand, Dell maintains a constant flow of data in

two information loops: one between customers and the dell sales team, and

the other among sales, procurement and suppliers.

Dell started out as a direct seller, first using a mail order system and then

taking advantage of the internet to develop an online sales platform


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ey points of Dell incredible rise

Disintermediation.

!nhancing customer value.

"rocess and operations innovation.

#et data do the driving.


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Approach

Identify Customer Values

Dell used historical customer knowledge from contracts, survey results,

business intelligence $%&' data and platform sales to begin its customer-centr

view of value.

Understand Strengths

(nderstanding customer value

&dentifying core competencies

(nderstand the !)ternal !nvironment


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Contd

Chart Clear Course and Beneft

Confgured by Dell CustomerConfguration

Product variety o! "i#h

Custo$i%ation i$ited Based on custo$er

value&orecast Accuracy "i#h o!

'olu$e (yConf#uration

"i#h o!

Cost o) ost sale o! "i#h


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Contd

*n#a#e the *ntire Or#ani%ation


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Results

Dell*s transformation yielded both financial and qualitative gains:

+tronger connection to customers

omple)ity reduction

&mproved internal collaboration

ost reduction

&mproved forecast accuracy


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Critical Success Factors

Dell identified three critical success factors:

+tart with customer value!)ecutive sponsorshipDedicated !

Lessons Learned

ccording to /r. 0oakes, 1Dell*s industry-leading supply chain

history has given us the skills to be agile and fle)ible. &t*s this history

that provides the framework and skills to reach the ne)t levels of

success and supply chain leadership.1


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Co$ponent

+anu),

PC+anu)act

urer

Distri(utor

-ResellerOrder

ProductProduct

&orecas

t

Co$ponent

Co$ponents

+icroA#e.Co$puCo$

Cor

cus

Traditional 2build to stock value chain3


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Co$ponent$anu)actur

er

D*Co$pCorp

Distri(utor

&icust

Components

Order

Product

D!## direct /D!#


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D!## D&4!T /D!#

Dell Computers direct model departed from the industrys historical rules on severa

fronts:

The company outsourced all componentsbut performed assembly.

&t eliminated retailersand shipped directly from its factories to end

customers.

&t too customi!ed orders for hardware and software over the phone or via the

&nternet.

&t designed an integrated supply chainlinking Dells suppliers very closely to its

assembly factories and order-intake system


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&mplementation of +upply hain

segmentation.

"hase # Vision$design % +kill required are outside-in perspective focus

on customers, knowledge of market and other industries, end-to-end supply

chain design and business acumen.

"hase & Change management % +kill adapted where process design,

+i) +igma e)pertise, data analytics, systems optimi5ation 6 communicatio

"hase ': (rchestrating the ecosystem ) Denotes a continuously

evolving organi5ation focused on translating customer needs to supply chai

capabilities


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ross Department ommunication

The broader the span of communications, the more simplified theneeds to be.

To ensure long-term, cross-functional collaboration, Dell integrat

chain design into e)isting product design processes and created a

review process,

"hased releases drive step-function improvements, rather than co

ad7ustments.


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Dell Case Study Smis