You are on page 1of 5

Slide 16 dell forecasting technology

Two surprises greeted the Dell executives who were creating this new process. First, as inventory dropped, lead-time performance improved. The reason was that Dell was not simply carrying component inventory against forecasted sales, but rather was aligning inventory and sales, managing profitability on a daily, weekly, and monthly basis. Second, as inventory disappeared, the company's returns grew disproportionately. Not only did Dell avoid carrying costs and obsolete stock, but importantly, it was saving enormous amounts of money on purchasing components because the component prices were dropping 3 percent per month. Profitability, not inventory The inventory in a channel is determined by the variance in supply and the variance in demand. Unless these variances are reduced, channel inventory can only be moved around, not eliminated. I think of this as the "waterbed effect." When you sit on a waterbed, it sinks in one spot and bulges in another. The water is redistributed but the amount stays the same. Through its use of profitability management, Dell matched supply and demand on a daily, weekly, and monthly basis. It sharply reduced the variance, and the need for inventories simply disappeared.

Then v can xplain d diagram in our words this is jus mirch masala for it

Slide 24 dells direct model


This quote epitomizes how Michael Dell transformed his former University of Texas dorm room adventure into a multibillion-dollar corporation. Dell wanted to be able to offer customers better quality at a bargain price. To achieve this objective, he incorporated a customer-centric philosophy in his company. His focus on concrete issues like cutting operation costs, improving delivery time, and maintaining customer service is the underlying force that has driven the company. Michael Dell's establishment of the "direct model," as well as his exploitation of the benefits of the Internet, has contributed vitally to the company's successes in both the US and overseas markets. The basis of the "direct model" is to improve efficiency by effectively eliminating the intermediaries thereby allowing the company to speak directly to the customer. Dealing directly with customers allows Dell to customize their orders according to the customers' needs. Listening to the customer directly takes the guesswork of what to include in the computer and wasted resources out of the equation altogether. Moreover, this "direct model" concept can also be applied to Dell's suppliers. Without the massive inventory that other corporations have, inventory costs were kept to a minimum and obsolete products were minimized. This significantly added to the ability of keeping the costs small for the customers. With the "direct model" initiative achieving preliminary success in both domestic and international markets, the materialization of Internet technology played a major role in sustaining the rapid growth of the company by allowing Dell to get even closer to its customers. This also created more options for customization. The establishment of www.dell.com opened up the company's product to a greater number of potential customers. Dell customers could configure and order their PC online, get technical support, and download updates to their software. Another breakthrough due to the Internet was the start of E-Support Direct. This helped revolutionize customer service by enabling automation and acceleration of the support process. Internet has truly helped Dell expand globally.

Slide 29 rfid supply chain proper diagram

Slide 27 dell chooses i2 software so this below info is all about i2.. it is basically is ibm software that helps forecasting faster than normal process

ARMONK, N.Y. 5 October 2011: IBM (NYSE: IBM) today announced it has completed its acquisition of i2. Based in Cambridge, UK, with U.S. headquarters in McLean, VA and a major presence in Tucson, Ariz., i2 expands IBM's big data analytics software for smarter cities by helping both public and private entities in government, law enforcement, retail, insurance and other industries access and analyze information they need to combat crime, fraud and other security threats. Today, more than half the people in the world are city dwellers. By 2050, that number is expected to rise to 70 percent. In recent years, IBM has seen growing interest in analytics technology as a tool for protecting cities in terms of both public safety and corporate security. i2 helps customers in 150 countries including eight of the worlds 10 largest companies -- tap into vast quantities of information and derive intelligence from multiple sources to anticipate threats, generate leads, securely share information and take steps needed to boost the security of citizens, customers and shareholders. More than 4,500 global customers rely on i2s offerings, including the U.S. Army, the Los Angeles Sheriffs Department and the majority of the police forces in the U.K. In combination, IBM and i2 technologies will enable clients to put seemingly unrelated pieces of information to work, drawing on both unstructured and structured data sources such as criminal databases, social media and biometrics. Using these technologies, corporate security experts, public safety personnel and other investigators are better equipped to find patterns and address security threats before a crime occurs. "Helping governments and businesses improve public safety and corporate security is a significant part of IBMs business strategy, said Craig Hayman, general manager, IBM Industry Solutions. "Through our acquisition of i2, we are strengthening our ability to help cities, countries, international organizations and private enterprises create safer environments for conducting business. With IBM, we can expand capabilities and help our customers achieve their missions and goals in using analytics and big data to drive more information sharing, further reduce crime and fraud and generate significant cost savings, said Robert Griffin, i2 CEO. Our clients will benefit from the integration of i2s products and technologies into a global organization with the stature and scale of IBM. The closing of IBMs acquisition of i2 comes less than five weeks after IBM's announcement on August 31 that it had entered into a definitive agreement to acquire the company. Soon after the closing, approximately 350 i2 employees will join IBM. Consistent with IBM's software strategy, IBM will continue to support i2s clients while allowing them to take advantage of the broader IBM portfolio.

Slide 26 dells competitive advantage

Dell did something else other PC companies were not doing; strategically targeting only the customers they wanted. By defining their customer as a knowledgeable PC user Dell made their task of providing a PC easier. Their customers did not need to go to a retail store to gain knowledge about their product. This enabled the Direct Model for purchasing PCs to work. Dell further expanded its ability to meet customers needs by classify customers into specific categories. Customers were categorized into Relationship buyers, large businesses and institutions, and Transaction buyers, small business and home PC users. The Relational buyers made up a significantly larger portion of Dells business but also had different needs than Transaction buyers. Every relational buyer was assigned a representative who guided the business and institution through each stage of the buying experience. By integrating both Relational and Transaction buyers into their business system repeat purchases were quick and easy, purchasing history could be consulted, and follow up customer service was able to be more effective. Dells business structure of virtual integration allowed it to excel in an incredibly competitive industry. It's competitiveness in the industry resulted from a highly efficient business model that sought out every opportunity to work more productively without compromising the quality of their product. Production efficiency lowered cost which in turn provided Dell with larger profit margins. As Porters Five Forces demonstrates, when bargaining power of buyers is high, the potential for price battles increases. Dell combated failing into the trap of a price battle by making a PC that was a better product than the competitors, yet near their competitors price. There costs were able to stay competitive while delivering an exceptional product because their business kept internal costs low, thus showing the effectiveness of virtual integration. Like Honda, Dell was able to provide a technologically superior product at a reasonable price. As well, Dell was able to evade a price war because its customers were aware of the technological value in a Dell PC.