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

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.

Electronic Data Interchange Communication and sharing of information within the entire supply chain

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

Dell – Supply Chain Key Points Flow of information with all involved parties. Strongest relationship is with the customer.

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.

Dell – SCM System Web Interface Acts as a universal platform for Dells internal databases to communicate with the suppliers external databases Message Broker Layer Handles all the internal communications, Also allows new servers/application to be added to the model without the whole system having to be redesigned. Example of one particular Supplier integrated website (B2B) Web Interface Message Broker Layer

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

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. How Dell uses RFID in is Manufacturing 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 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.

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

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 Boeing will now only deal with Dell computers They have a direct (EDI) link into the order management system which is maintained by Dell This system means it is possible for 30 employees at dell to take care of Boeing 140 000 Pcs, forecasting future purchases and managing current inventory.

Summary Business Strategy Integrate with suppliers i2 SCM systems Dells overall Electronic Data Interchange Integrate with customers Premier Pages Specialized customer database Internal tracking RFID tags I2 SCM system offers Speedier inbound logistics. Better forecasting Reduced inventory Reduced supplier risk Dells EDI also offers Faster better decisions and information flows and streamlined ordering systems Premier Pages offers Greater customer service, loyalty and retention of relationship with customers Reduced barriers to purchase Specialized customer database Also offers more personal relations with Dell and allows fewer people to manage large organisations. RFID tags Allow much greater accuracy during manufacture as well as real time information of progress