Dell Supply Chain ManagementS.Mamatha Himabindu

DELL was founded by Michael Dell in his University of Texas-Austin dorm room in 1984.

Simple Business Model: “Eliminating the Retailers from the Sales Channel and Selling Directly to Customers” at lower than market average prices.

Reached one of the top 5 in 1993, and Became Number 1 in 2001.

3 Manufacturing facilities in the United State:

Austin, Texas; Nashville, Tennessee; Winston-Salem, North Carolina

Dell’s revenue for the last 4 quarters totaled $56 billion and with 65,200 employs world wide.

Other than Personal computers Dell also include workstations, servers, storage ,monitors, printers, handhelds, LCD TVs, projectors.

Contract Manufacturing:

The phenomenon of contract manufacturing began in the 1980s

Contract Manufactures were responsible for producing materials/unassembled components in less expensive regions and shipped to OEM factories

By late 1990s, more & more contract manufactures began some level of manufacturing/assembly for their customers

According to Alameda,California-based technology CM was worth $90 billion and by 2001 it was doubled $178 billion

Original Equipment manufacturers(OEMs) chose to let CM own & manage part of manufacturing for

Capability

Manufacturing Compititiveness

Technology

By 2005, almost all the desktop PCs sold in the US were initially produced by CM in China

Depending on the level of manufacturing competency and cost some manufactures do everything from manufacturing all the way to shipping fully assembled products

Dell was one of the few American companies that still retained manufacturing facilities in the US

As Dell Customize according to their customers. So, CM in china produce and ship half assembled products to Dell’s factories

Dell factory associates perform further product fulfillment building in the customized components including the processor, memory, hard drive , speaker, etc..

Installing the necessary s/w application, performing final unit testing and then delivering the fully assembled & functional product

Level % versus Level 6 Manufacturing:

Degree of assembly can be broken into 10 levels. The higher the level, the more fully integrated it is.

Level 5 includes PC chassis , floppy disk drive and fan depending on the chassis configuration

Level 6 manufacturing, the supplier installs the motherboard in the chassis

When a contract manufacture in china produces an L6 desktop PC chassis, yet which is not a functional unit and still requires customized parts such as the processor, memory, hard drive, speakers

The contract manufacturer ships the L6 chassis from china to Dell’s factories in the United States and Ireland and then Dell finishes Level 10, a fully assembled and functional product

Some of the dell products such as handhelds and printers are manufactured to Level 10 by contract manufactures.

L5 manufacturing has higher overall manufacturing and logistics than L6

Causes

Chipset supplier decommit or supply issues

Quality/engineering issues

Dell forecast accuracy

New product introduction

Thank You