...Running head: Supply Chain concept-JIT Dell Supply Chain concept Just-In-Time JIT 2 Abstract JIT or Just-In-Time a process where inventory is delivered at the time it is needed. This helps an organization from keeping inventory that in time they might not be able to use. Strong communication between the organization and the supplier is crucial to make the process flow smoothly. JIT 3 Dell Supply Chain concept Just-In-Time Dell is the leader in the computer industry for Just-In-Time. The opportunities of JIT for Dell have been the elimination of its warehouses for storage of inventory, being able to deal directly with suppliers and get the finished product to the customer without delay. By using JIT, Dell has been able to eliminate the storage of inventory. Dell is able to accomplish this by not guessing what their customers want but by taking direct orders either over the phone or on-line and having the customer pay using a credit card. Having the product paid for up front helps Dell with inventory because the customer will not be able to change his or her mind. Once an order is placed Dell contacts the suppliers for the inventory that is required, then builds and ships the product to the customers within 4 days. (Pen of a Paranoid, 2009). Dell holds itself to high standard and they also hold their suppliers to a high standard. If you want to be a supplier for Dell you follow their rules. Dell is able to have their suppliers hold inventory...
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...LIVING IN DELL TIME It could have been the unforeseen catastrophe that rocked Dell's world. Instead, it proved to be the moment when Dell's foremost competitive weapon--an unrelenting sense of urgency and speed-ultimately proved itself. Two years ago, a 10-day labor lockout idled 10,000 union dockworkers, shut down 29 West Coast ports extending from Los Angeles to Seattle, and blocked hundreds of cargo ships from unloading the raw materials and finished goods that fuel U.S. commerce. The port closings paralyzed global supply chains, bloodied retailers and manufacturers, and ultimately cost U.S. consumers and businesses billions. Analysts expected that Dell, with its just-in-time manufacturing model, would be especially hard hit when parts failed to reach its two U.S.-based factories. Without warehouses filled with motherboards and hard drives, they figured, the world's largest PC maker would simply find itself with nothing to sell within a matter of days. And Dell knew all too well that its ultralean, high-speed business model left it vulnerable to just such an intolerable prospect. "When a labor problem or an earthquake or a SARS epidemic breaks out, we've got to react quicker than anyone else," says Dick Hunter, the company's supply-chain czar for the Americas. "There's no other choice. We know these things are going to happen; we must move fast to fix them. We just can't tolerate any kind of delay." Fortunately, the same ethos of speed and flexibility that seems to put...
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...DELL "You don't have to be a genius or a visionary or even a college graduate to be successful. You just need a framework and a dream."-Michael Dell Michael Dell wasn't the only young entrepreneur to ride the computer boom of the late 1980s and early 1990s from rags to riches. Like Rod Canion of Compaq and Steve Jobs of Apple, Dell turned a fledging start-up into a multibillion-dollar computer empire. But unlike the ill-fated Canion and Jobs, who lost control of their creations as they grew, Dell has managed to hold on to the reins of his maverick venture and achieve the unique distinction of being the computer industry's longest-tenured CEO. Following the simple idea that by selling customized personal computer systems directly to customers he could best understand their needs and provide the most effective computing solutions to meet those needs, Dell has made Dell Computer Corp. the world's leading direct computer systems company. Dell's parents wanted him to be a doctor. But by the time he was in junior high, Dell was hooked on computers. While most of his classmates were tinkering under the hoods of old cars, Dell loved to tinker with his Apple IIe. To please his parents, Dell enrolled as a premed student at the University of Texas in 1983, but by then his only real interest was in computers. During his first semester, Dell spent his spare time buying up remaindered, outmoded PCs from local retailers, then upgrading and selling them from his dorm room. He was so successful...
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...and success and future challenges. Dell’s Direct Model Dell has been following it’s unique direct build-to-order sales model for more than 20 years. Customers can plan their own configuration and place orders directly with company via the phone or a web site. Over the years Dell supply chain efficiencies and direct sales gave it a competitive advantage. Dell has also leveraged JIT principle to make its manufacturing process success. Dell’s approach to JIT is different in that they leverage their suppliers to achieve the JIT goal. They are also unique in that Dell is able to provide exceptionally short lead times to their customers by forcing their suppliers to carry inventory instead of carrying it themselves and then demanding (and receiving) short lead time on components so that products can be simply assembled by Dell quickly and then shipped to the customers. Characteristics of direct model * Eliminate costs and risks of carrying large finished goods inventories * High velocity * Low-cost distribution * Direct customer relationship * Build-to-order * Just-in-time manufacturing * Products and Services aimed at specific market segments * Reduced channel costs: from 13.5%-15.5% to 2% of product revenue * Latest Technology was introduced faster than indirect channels * Dell can use IT to directly control its value chain, set quality measures and monitor in real time how material is flowing throughout the chain * Managing...
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...improved product) Dell is the only computer company which offers its customers the built-to-order model. The customers can choose which components they want to have in their computer and can adapt it to their needs. Process Innovation (the development of a new manufacturing process) Dell has brought a maniacal focus to shaving minutes off the time to assemble and ship a computer. By studying videotapes of "the build," as they call it, factory managers have slashed in half the number of times a computer is touched by workers. They've counted the screws in a PC and redesigned it so that the major components simply snap in place. The entire process, from the time the order is taken to when the finished PC exits the factory, is wrapped up in four to eight hours. Organizational Innovation (a new internal communication; introduction of a new accounting procedure) Dell has a very good communication. As they standing under so much pressure regarding to the fact that they have no inventory, they have to have this skill. There is even a round-the-clock communication with the parts makers overseas existing, which helped them to handle with the lockout in 2002. Without this communication they had never managed it through it. With the built-to-order principle Dell has also changed its financial model (introduction of a new accounting procedure). Dell receives the payment from its customers immediately, through credit cards, online or over the telephone. But Dell doesn’t pay its suppliers...
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...History and Growth Through the years Dell went from producing PC’s to software, hardware, workstations, electronics, printers, tablets, mobile devices networking, storage devices, servers, security products and other electronic devices and information technology systems but it all started with just building computer systems. Dell doesn’t just sell products to personal consumers, Dell also targets government, healthcare, education and small and large corporations. Michael Dell founded Dell Company; hence the name of the company derived from his family name but the company wasn’t known as Dell back in 1984 when it was founded. In 1984 the company was known as PC’s Limited which designs, manufactures and sells technologies that has a dedicated founder who left his university to commit his time and effort for the company. What separated Dell from other firms in the industry in 1985 is their unmatched service for their customers in their first PC, “Turbo PC” (Dell 2012). Dell provided a “risk-free returns and next-day-at-home product assistance” (Dell 2012). From that Dell continued to grow by providing what was back then the PC with the fastest performance and opening branches internationally. One of the significant time and moment in Dell’s growth is in 1988. Dell was able to do their public offering which upped their capital from 1 thousand to 85 million dollars and Dell was growing at about an 80 percent rate (Dell 2012). By this time PC’s limited officially changed their...
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...Running head: Dell Inc. E-Business Task 1 Soufiane Khalil Western Governors University The organization that I chose to talk about is Dell Inc. Dell Inc., began in 1984 by Michael Dell in his dorm room. Michael was an A student, really smart one. He was always attracted by computers, building them and spec’ing them out. He has built his own. However, he wasn’t happy the way PC providers were building theirs, especially from the way their supply chain was doing business. So Michael decided to start building his own computers, and selling them to other students. The concept of building and selling computers grew fast, and he found a lot of success doing it. His passion expanded from other students market. He grow to other businesses then expended out. The thing about Michael Dell, is that he knew how to make the supply chain works in his favor. He did it so well that it differentiated him from the business leaders back such as IBM. Dell became a company and started growing and growing. The profit the first year was $50 Million, and the next year was $150 Million. Dell kept growing and growing and became a success story hiring more and more people, expanding all around the globe. Dell went public in its early years, and kept growing. It entered the enterprise market in 1992 by building their first server. Dell kept dominating the pc market for both home systems and enterprise. Dell kept leading. In 2002 Dell built their first blade server, which was really revolutionary...
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...Dell and Information Technology Dell is regarded worldwide as one of the largest and most popular computer companies in the business today, but they do much more than just make computers. Dell has exemplified the way e-business is conducted and has innovated many aspects of it to fit their own business model. Ranging from online computer sales to tailored corporate customer support, Dell has integrated several methods of e-business, which have given them a cutting edge against their competitors, especially at a rough time for the PC market. First let us look at Dell’s background a little bit. Dell is a technology company that not only sells computers, servers, and networking equipment, but IT services and consulting as well. Dell revolutionized computer sales by becoming the first company to sell products via phone and the internet instead of retail stores. While initially Dell blew away competition using this new approach, competitors have narrowed the gap. Dell currently employees over 103,000 people worldwide and is widely known for its supply chain and e-commerce strategies. Since its launch in 1996, Dell.com has been more than just a website, providing users with top level support, information, and purchasing abilities. Starting in 1996, Dell began to sell computers via their website, and in 1997 was the first company to record one million dollars in online sales. By 2000 Dell was pulling in $50 million a day in online sales. According to Dell, roughly half of the company’s...
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...Dell Case Answers 1. Dell built the computer systems after the company received the order. Dell focused on adopting a just in time inventory system that allowed them to keep their work in process and finished goods inventory between a 10-20% range. Their competitors had work in process and finished goods inventory between 50 to 70%. Dell’s supply of inventory was much lower than its competitors, which gave them a competitive advantage. Dell only had parts or raw materials in their inventory. Advantages of just in time inventory include faster turnaround of the products which reduces the risk of products being damaged, more cost efficient allowing a steady cash flow, and less space needed for inventory. Disadvantages include not having the product ready on time, and lack of control of time because Dell is depending on its suppliers. When technology was changing, Dell was able to jump on it fast. Dell was the first manufacturer to convert its entire major product line to the Pentium technology. Dell was able to offer faster systems at the same price its rivals were. Since Dell used just in time inventory, Dell was able to update any flawed chips and offer the new Windows 95 system the day it was launched. 2. Dell’s sustainable growth rate in 1995-1996 was: (Sales/Assets)*(Assets/E)*(Net Income/Sales)*(100%) (3,475/1,594)*(1,594/652)*(149/3475)*100% 2.1801*2.44478*.0429*.1 22.89% The actual growth rate is 1996: Ending Sales-Beginning Sales Beginning...
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...Analysis Of Dell Junjie Yu 100573775 1.introduction Dell is an American privately owned multinational computer technology company based in Round Rock, Texas, United States, that develops, sells, repairs, and supports computers, printers and other related products and services. Eponymously named after its founder, Michael Dell, the company is one of the largest technological corporations and one of the top 500 companies in the world, employing more than 103,300 people worldwide. This article will analyze Dell to find out its success and what it needs to improve. 2.Business mission & objectives The mission statement of Dell is very simple. “Listen. Learn. Deliver. That’s what we’re about.” Dell empowers countries, communities, customers and people everywhere to use technology to realize their dreams. Customers trust us to deliver technology solutions that help them do and achieve more, whether they’re at home, work, school or anywhere in their world. 3.Situation analysis (SWOT) This part is the SWOT analysis of Dell, showing the strengths, weakness, opportunities and threats of Dell. (1) Strengths Firstly, it is one of the best-known brands in the world and it is actually the largest PC makers. That means it has millions of loyal customer that can help it prevent from many competition. The brands are also the valuable assets that can help it improve itself and facilitate the purchase. Secondly, Dell’s main marketing strategy is operational excellence. In fact...
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...PROCESS OF DELL. EXECUTIVE SUMMARY Every organisation has different processes it uses to be successful and there are some that are quite essential for a business to identify what it is doing right and what it is not doing. Through this process clearly analysed in Dell Corporation in this report it is able to help a business grow, and thus by identifying all this factors a business is able to make starategic decisions on what is best for the business and develop goals that will help move the company forward. So by looking at Dell we will be able to identify all this important processes and thus run a successful business. INTRODUCTION. Dell which was formed by Michael Dell in his university dorm room as shown in http://www.bizface.co.uk/bizfaceforum/blogs-leading-articles/43905-famous-dell-case-study-finance-case-study-dell-s-dilemma-brazil-del.html in 1984 when he was only 19years and is now one of the biggest computer seller worldwide. It has over 100,000 employees in the world and sells 110,000 systems daily to over 180 countries. In its’ second quarter of the fiscal year ended 30th June 2010, dell generated a net income of $545 million. All this huge figures just show how big a corporation dell is and many may ask what were the factors that attributed to this dells’ success. There are a number of factors that attribute to dells success and according to http://ivythesis.typepad.com/term_paper_topics/2008/02/dell-strategic.html the main ones being; • Dells direct model...
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...Introduction Dell Computer Corporation was founded in 1984 by Michael Dell in his dorm room at the University of Texas. In 2003, the company name was changed to Dell Inc. to reflect evolution of it from a computer manufacturer to a company that provides a wide range of technology related services. Dell Inc., now an American privately owned multinational company, became successful by providing quality inexpensive computer products than its competitors and grew to be the number one in the world (Exhibit 1) by implementation of its Direct Model. While competitors sold primarily through distributors, resellers and retailers, Dell directly took specified orders from customers through its established website and telephone lines, built and shipped devices to customers. Dell’s success started when its revenue surfaced $80,000 per month in 1984, and its ever growing revenue to billions of dollars, shares price and domination of PC market and standards until its defeat by Wlett-Packard (HP) in 2007. The ever falling of Dell’s shares price eventually made Michael Dell to buy back Dell’s shares in order to be able to restructure its legacy PC business one day. Company’s Current Strategy Dell Inc. pursues a focused differentiation strategy by offering premium quality products and devices and the best possible before and after sales customer service in a very timely manner. Dell believes it has the most efficient business model in the fierce competitive PC making industry. The company’s...
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...Apple vs. Dell A Comparative Analysis Submitted in partial fulfillment of the requirement for Elephants and Cheetahs: Systems, Strategy and Bottlenecks Submitted to Prof. Saral Mukherjee Ms. Kavya Sajwan 01-September-2013 Prepared by Anubhav Sinha Indian Institute of Management Ahmedabad EXECUTIVE SUMMARY The computer industry is highly competitive and is characterized by large number of competitors and price based competition. Factors like technology, income levels and internet usage are drivers of growth in the industry. In this industry Dell and Apple have followed two distinct strategies to succeed. Dell has Just-in-time manufacturing facilities, direct sales to customers, mass customization and build-to-order manufacturing. It basically operates assembly plants and purchases all the components from partner suppliers and tries to achieve a virtual integration of suppliers, manufacturing and customers. Dell products appeal to customer segments that are looking for affordable, high performance products and are typically large businesses. The manufacturing practices at Dell have helped in cutting costs and delivering latest technology products to the customers. The direct sales strategy has also provided Dell with a feedback mechanism which helps it forecast demand trends much better and reduce the risk. R&D at dell is geared towards process improvements and quality controls. Dell however, cannot bring architectural innovation...
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...Living in Dell Time 1. Identify and describe all the different types or forms of innovation exemplified in this article by explaining with data and facts from the case (10 points). First they are using a production innovation the just-in-time model. (It is a strategy for inventory management in which raw materials and components are delivered from the vendor or supplier immediately before they are needed in the manufacturing process.) Inventory has been a form of security but this kind of security is very expensive because computer parts are fast moving goods, and if your stock is full of these goods you will lose a lot of money. Kevin Rollins the CEO of Dell said, “inventory is like fish, the longer you keep it the faster it deteriorates.” Eleven years ago Dell carried 20 to 25 day of inventory in their warehouses and today they don’t have a warehouse. But if it fails, its manufacturing operations will crash within a matter of hours. But they also said that if you have your stock full of components, always you will have a lot of the wrong stuff and none of the right stuff. Many companies are not sure if it´s good of running so lean in an uncertain world, because you never safe for terrorist attacks or natural disasters. Another innovation is when they miss a forecast and they see they are running out of 15-inch flat screens they make for example a one week special of 17-inch screens in that time they sell it cheaper and so they lead the customer what they should buy...
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...STANFORD UNIVERSITY CASE NUMBER: EC-17 November 2000 DELL DIRECT1 In 1995, a manager from a leading Japanese computer company was recounting his company’s plans to conquer the US Personal Computer (PC) market: “We have a strong brand name in consumer electronics, and what’s most important, we build many of the components that are needed in the PC ourselves: monitors, audio equipment, CD-ROM, DRAM, and so on. This will give us a tremendous advantage over American competitors, who have to buy everything outside” [1]. Several years later, it looks like the competitive weapon of this and other Japanese electronics giants had misfired. Hitachi, Sony and Fujitsu have spent vast resources trying to crack the US PC market, but had only captured a marginal share—and they had lost money doing it. At the same time, Texas-based Dell Computer Corporation, founded by 19-year-old Michael Dell in a university dormitory room, was growing rapidly, sustaining a much larger portion of the PC market than all Japanese vendors combined. And while the Japanese PC manufacturers were unable to earn any money in the US market, Dell, which produces no PC components, was highly profitable, grew by more than 50% each year over the 1995-1998 period, and saw its stock grow about 30,000% in a decade (see Exhibit 1 for Dell financial summary). Dell does not manufacture any components, but it can produce custom-built PCs in a matter of hours. How does Dell do it? Why did it succeed where the Japanese PC manufacturers...
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