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Technology Thomas Ridings School of Engineering - Warwick University ES4C9 – Supply Chain Management – Mike Flatt Supply Chain Management

Technology Thomas Ridings School of Engineering - Warwick University ES4C9 – Supply Chain Management – Mike Flatt Supply Chain Management

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Page 1: Technology Thomas Ridings School of Engineering - Warwick University ES4C9 – Supply Chain Management – Mike Flatt Supply Chain Management

Technology

Thomas RidingsSchool of Engineering - Warwick UniversityES4C9 – Supply Chain Management – Mike Flatt

Supply Chain Management

Page 2: Technology Thomas Ridings School of Engineering - Warwick University ES4C9 – Supply Chain Management – Mike Flatt Supply Chain Management

Dell – Overview• The company was founded by Michael Dell in 1984.

• In 1987 they were the first computer systems company to offer next-day, on-site product service.

• Shown to be 2nd in Computer hardware design, manufacture and distribution (2010) with a market share of 18.5%.

• Annual revenue of around £40 billion employing 76 500 employees.

• One of the few PC companies to offer a direct sales model.

Page 3: Technology Thomas Ridings School of Engineering - Warwick University ES4C9 – Supply Chain Management – Mike Flatt Supply Chain Management

Electronic Data InterchangeCommunication and sharing of information within the entire supply chain

Page 4: Technology Thomas Ridings School of Engineering - Warwick University ES4C9 – Supply Chain Management – Mike Flatt Supply Chain Management

Dell – Direct Sales Model• Sell direct to customer through their online store• This is true for all Customers

– Large Corporate Enterprises– Home pc-users

– Advantages• The intermediary steps that may add time and cost are eliminated• Dell is directly linked to its customers

Page 5: Technology Thomas Ridings School of Engineering - Warwick University ES4C9 – Supply Chain Management – Mike Flatt Supply Chain Management

Dell – Supply Chain

• Key Points• Flow of information with all involved parties.• Strongest relationship is with the customer.

Page 6: Technology Thomas Ridings School of Engineering - Warwick University ES4C9 – Supply Chain Management – Mike Flatt Supply Chain Management

Dell – SCM System• Why is the SCM system so important?

– For Dell material costs account for 74% (29.6 billion) of annual revenue.– Improving SCM by 0.1% has a bigger impact than improving

manufacturing process by 10%.

• Dell uses i2 Technologies for its SCM system.– Dell employs i2 technologies software package to run the SCM system.– Every 20 seconds the software runs a stock analysis for both Dell and its

suppliers it then creates a bill of materials specific to each supplier.– This system gives Dell a delivery time of roughly 2 hours, and removes the

need to run daily forecasts.– This system is true for 90% of Dells orders which are placed inside

integrated websites specifically designed for each supplier (B2B)– The system integrates with Dells extensive EDI to give the entire supply

chain live sales information.

Page 7: Technology Thomas Ridings School of Engineering - Warwick University ES4C9 – Supply Chain Management – Mike Flatt Supply Chain Management

Dell – SCM System

• Example of one particular Supplier integrated website (B2B)– Web Interface – Message Broker Layer

Page 8: Technology Thomas Ridings School of Engineering - Warwick University ES4C9 – Supply Chain Management – Mike Flatt Supply Chain Management

Radio Frequency Identification DeviceWireless system that works in conjunction with the IT infrastructure to help with the tracking of objects.

Page 9: Technology Thomas Ridings School of Engineering - Warwick University ES4C9 – Supply Chain Management – Mike Flatt Supply Chain Management

Dell – RFID• RFID Technology is employed in Dells larges manufacturing

plant (Xianmen, China).– Each order placed online has a tray allocated specifically for that order.

– Each tray is embedded with RFID technology so exact information regarding the product can be attained from the orders database.

– At every stage of the production the tags are read to define the manufacturing process for that particular station.

• RFID Technology is also used for Shipping.– Once assembled and tested, production information is assigned to each

tag and the product is sent to the shipping station.– Here the tag transfers all the production data the orders database.– The database then prints the label specific to that particular order including

all the shipping details stored within the database.

Page 10: Technology Thomas Ridings School of Engineering - Warwick University ES4C9 – Supply Chain Management – Mike Flatt Supply Chain Management

Dell Customer Relations ManagementLarge corporate customers make up 85% of dells revenue the CRM system is designed to maintain these relationships

Page 11: Technology Thomas Ridings School of Engineering - Warwick University ES4C9 – Supply Chain Management – Mike Flatt Supply Chain Management

Dell – Premier Customer• Corporate Customer account for 85% of Dells revenue.

– Each organization/ customer has a specialized site within the Dell premier framework.

– Access to products and information is tailored to each customer.

– Allows pre-approved setups to be ordered• This cuts down on internal paperwork as the order is automatically routed to manager for

approval.

– This system also allows access to dells own on-line technical support.• Over 500 000 pages of information

– Can also hold specific software configurations for each customer or each internal department.

• Dells maintains a special database of its top 50 customers worldwide.

– It allows real time access to an entire companies records including current/previous orders, support requests, invoice request, etc

– This system has had great results eg. Boeing

Page 12: Technology Thomas Ridings School of Engineering - Warwick University ES4C9 – Supply Chain Management – Mike Flatt Supply Chain Management

SummaryBusiness Strategy•Integrate with suppliers

• i2 SCM systems• Dells overall Electronic Data Interchange

•Integrate with customers• Premier Pages• Specialized customer database

•Internal tracking• RFID tags