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Dell at a Glance
Globally 2nd in computer hardware design, manufacturing and Founded by Michael Dell in 1984. 1987 --first computer systems company to offer next-day, on-site product

distribution with a market share of around 16%.(HP is 1st with 19%)

service .
Greater than $50 Million sales per day through the internet with yearly

revenue of $55.908 Billion with employee base of 78,000.

Ventured in areas of storage products, workstation systems, online

technical support, appliance servers, network switches, standardsbased point-of-sale offering for retail customers, recycling .
Shipped more than 10 million systems in a single quarter (Q4, FY06)

Dells Direct Model

Direct relationship, most efficient path Low cost and best value Built to order Customized systems Superior, tailored service and support Highest quality and most relevant technology

Dells Value Web Model

Why SCM is so Important in PC business

Material costs account for 74%($21 billion) a year for

Improving SCM by 0.1% has bigger impact than

improving manufacturing process by 10% .

Changing technology obsoletes Materials value by

almost 1% per week .

Rely on market forecasting to drive Production.
Technological breakthroughs cause very short Product

life cycles .

Competitors Disadvantages vis--vis Dell

Need to hold inventory at each step in value chain .

Have to pay suppliers first before getting paid from customers

Caught with short supplies of hot products- lost sales.

Stuck with excess inventories of slow selling products .

With about 2,000 product transitions a year, the ability to

reduce product time to market is critical.

Dells Competitive Advantages

Dell is having one of the best SCM in the world.
90% supplies ordered online using integrated websites of

supplier and Dell (B2B).

95% of suppliers situated very close to assembly plant hence

coordination is easier.
Dells factories have only 7 hrs worth of inventory for most items

whereas industry wise it is around 10 days.

15 suppliers provide almost 85% of all supplies. Dell gets paid by customers and then pays to its suppliers.

Dell Chooses i2 SCM S/W package

Dell chose i2 Technologies for its SCM system. i2 serves almost 70% of the SCM market. Every 20 sec the S/W aggregates orders, analyzes material requirements ,compares Dells on-hand inventory with its suppliers inventory and then creates a supplier bill of material to meet its order needs .

Instead of forecasting the daily supply needed, Dell receives the exact material every two hours to fulfill actual customer orders.


What is RFID
RFID stands for Radio Frequency Identification Devices. RFID is a 3 part technology consisting of: A reader A receiver with decoder A Transponder

RFID applications

RFID at Dell - Manufacturing

Tracking code and Computer assembly instructions

are added to the tray.

This determines the specific line to which the tray

should go to.
At every stage of the assembly, the tags are read by

the antenna for specific instructions.

RFID at Dell - Shipping

Once assembled and tested, production information

is inserted into the tags and sent to a shipping station.

At the shipping station, the RFID tag transfers data

to the control PC.

This control PC uses this information to print the

appropriate label.

Benefits of RFID
Production stops have reduced dramatically. Labor can be allocated by minimizing repetitive

Returns due to wrong shipping of products have

been minimized.