Post on 29-Nov-2014
description
© Dell Inc. - 2003
Supply Chain Excellence
2© Dell Inc. - 2003 Supply Chain Management
Dell’s Product Portfolio
Precision Workstations
PowerEdge Servers
PowerVault&
Dell|EMC Storage
OptiPlex Desktops
Latitude Notebooks
Software &Peripherals
PowerConnect Switches
3© Dell Inc. - 2003 Supply Chain Management
~80%Corporate & Institutional ~20%
Consumer
Customer Base (Revenues)
Revenue by Region
70%Americas
11%APAC
19%EMEA
Global Manufacturing Austin, Texas, USA
Nashville, Tennessee, USA
Eldorado do Sul, Brazil
Limerick, Ireland
Penang, Malaysia
Xiamen, China~41,800 employees worldwideRevenue $38.4B (last 4 qtrs.)
Dell Facts
Revenue by Product• Desktops = 51%• Enterprise = 21%• Notebooks = 28%
4© Dell Inc. - 2003 Supply Chain Management
Suppliers Customers
Direct Model
• Continuity of Supply
• E-business Collaboration
• Technology Leaders
• Low-cost Manufacturers
• Best Customer Experience
• Low Cost Efficiency & Highest Quality
• Partnering/Virtual Integration
• Product Quality
• Price for Performance
• Customization
• Reliability, Service and Support
• Latest Technology
5© Dell Inc. - 2003 Supply Chain Management
The Power of Virtual Integration
• Dell acts as the single point of accountability while focusing on our core competency – custom-configured computing solutions.
• Seamless integration with best-in-class partners leverages their core competencies for the benefit of Dell’s customers.
Software E-Business
ServicesTechnologyBLUECURRENTEMC²
SOLUTIONSOLUTIONCustomer
6© Dell Inc. - 2003 Supply Chain Management
1991
0
50
100
Day
s S
ales
Inve
nto
ry
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 Q103
10
20
30
40
60
80
70
90
5
15 X
Inventory Management Experience
7© Dell Inc. - 2003 Supply Chain Management
Cost
Quality
Delivery
Worldwide Procurement Regional Materials
Shared responsibility
Separating contracting from commerce
Procurement Responsibilities….
8© Dell Inc. - 2003 Supply Chain Management
Execution
Planning
Strate
gy
Intense Focus through:• Separate internal organizations• Supported by unique processes and systems• Looking at a different parts of the inbound supply chain• Dealing with different people at the supplier
Continuity of Supply
Low inventory does not equal Supply IssuesBut it does equal operational efficiencies…
Time Horizon: Beyond lead-time 3 days to order lead-time 0 to 3 daysOrg (people): Worldwide Procurement (6X) Regional Materials (4X) Factory (X)Supplier Interface: Executive Operations SLC
9© Dell Inc. - 2003 Supply Chain Management
Quickly Make Product after Sale = Cost Advantage
ConsistentSupply
Globally
Immediate Response to Customer Needs
LowestCost Consistently
Customer Benefits
Time
Co
st
of
Co
mp
on
en
ts
Today
Customer Places Order
Dell Procures Components, Assembles, &
ShipsDell Cost
VAR Gets Product from
Distributor
Channel Inventory
3 Weeks Ago
Distributor Gets Product from
Mfr
4 Weeks Ago
Mfr Assembles Product
6 Weeks Ago
Mfr Buys Components
8 Weeks Ago
Cost to Competitors
Mfr Inventory
10© Dell Inc. - 2003 Supply Chain Management
Velocity = Direct Demand Feedback
1) Dell facilities act as Manufacturing Centers, not Warehouses – only inventory needed for next 2 hours of orders is on site
2) Provides direct signal of Dell customer demand for suppliers
3) Dell’s performance to customer orders is directly linked to our suppliers’ level of support
4) Absolute synchronization between manufacturing and sales keeps the process balanced.
SLCDell
Manufacturing
Buy-to-Plan Build-to-OrderS
up
pli
ers
Material requested to build customer orders
All material is tied to a customer order – nothing is built without an order.
“push” “pull”
Cu
sto
mer
s
11© Dell Inc. - 2003 Supply Chain Management
Quarterly Business Review (QBR)
Quality
Cost Leadership
Performance to Targets Structural Cost Analysis Advantaged Pricing Internet Negotiation
Service
Technology/Time To Volume
Continuity of Supply
Warranty Cost VLRR, 90-day FIR Process Capability 5 Sigma
Product Leadership Roadmap Alignment Joint Qualification RTS Predictability
Corrective Action Global Support Failure Analysis Quality Metrics
Supply Chain Optimization Capacity/Capability Globalization Flexibility
Senior leadership involvement
Data driven discussion/ decisions
Identify actions/ commitments
Mutual agreement of future performance targets
Measure and reward performance
12© Dell Inc. - 2003 Supply Chain Management
Continuous Improvement
1. DefineWhat’s the problem?
Who can fix it?What’s the process?
2. MeasureCan I explain a problem
with data?
3. AnalyzeWhat’s the real problem?
4. ImproveLet’s improvethe process!
6. ReportTell others.
5. ControlDid we improve?
Did we save money?
BPI
Model
• Initial Six Sigma efforts started in 1994.
• Formal “belting” process in manufacturing - 1998.
• Company-wide program started in 2000.
• Master Black Belt focused on supplier BPI beginning 2001.
• Foundation for Dell’s Winning Culture Initiative.
• Over $1B saved during life of program …
Business Process Improvement
Certification Levels• Yellow Belt• Green Belt• Black Belt• Master Black Belt
13© Dell Inc. - 2003 Supply Chain Management
Low Cost LeaderDell consistently provides superior value
Dell’s low operational costs mean lower prices for customers:
• State-of-the-art supply chain management
• Efficient technologies:• Dell.com• Support.dell.com• Globally available Premier Pages
Operating Expense Over Time (% sales)
8%
10%
12%
14%
16%
18%
20%
22%
24%
26%
28%
Q1 CY02 Q2 CY 02 Q3 CY 02 Q4 CY 02
14© Dell Inc. - 2003 Supply Chain Management
CompetitivePricing
CompetitivePricing
DrivesMarket Share
DrivesMarket Share
EfficientModel with Lowest
Cost Structure
EfficientModel with Lowest
Cost Structure
HelpDrive
SupplierBusiness
HelpDrive
SupplierBusiness
Pass cost savings on to customer
Pass cost savings on to customer
Competitive pricing ignites demand
Competitive pricing ignites demand
Lower cost drives Increased demandLower cost drives Increased demand
Industry's most efficient
procurement, manufacturing and distribution
process
Industry's most efficient
procurement, manufacturing and distribution
process
Dell’s Direct Model = Perpetual Success
15© Dell Inc. - 2003 Supply Chain Management
• Organize around Customers – “Be Direct”
• Manage Business Fundamentals – cash\expenses
• Stick to Core Competencies – leverage partners
• Focus on Velocity – compress time
• Continuous Improvement – cultural mandate
• Simplify Complexity – “Easy as Dell”
• Critical Ingredients = People and Processes
Dell’s Strategies for Success
Structural advantages – part of Dell’s DNA …
16© Dell Inc. - 2003 Supply Chain Management
Thanks!
SCM@Dell - Velocity Matters!