DELL
LOGISTICS & TECHNOLOGY
MOUPIA SAHA - 191051014
DELL GETS DOMESTIC
• Dell has located shipping & assembly site closer to home, thus they could
ensure it would be very profitable for them to US market.
• Dell had open 3rd domestic plant, thus they could speed up production and
reduce delivery cycle time.
• This step for Dell could impact significant supply chain implications.
• Dell establish direct-to-consumer sales model to offset higher U.S. labor
costs and improved their logistic efficiencies.
DELL`S NEW STRATEGY
• When every company was looking for low wages, Dell is looking for
facilities in the United States.
• Dell's showed how closely logistics and manufacturing are linked in the era
of global supply chains and mass customization.
• This strategy makes it possible to customize computers for individual
consumers at a low cost and for a low price.
• Dell plans to keep that competitive advantage by bringing assembly and
distribution closer to its customers.
DELL`S MARKET SHARE
• Dell held 30.4 percent of the U.S. market and 16.8 percent of the worldwide
market in the third quarter.
• It shipped nearly 7.9 million PCs in US market & worldwide.
DELL'S NEW PLANT
• Dell's new plant will be in North Carolina's Piedmont Triad region, bordered by
Greensboro, Winston-Salem and High Point.
• The plant will employ 700 workers the first year & 1,500 total within five years.
• The North Carolina location will shave five to eight hours off the delivery time of Dell.
• Dimension and OptiPlex desktop computers that will be assembled at and shipped from
the plant.
• This plant could ensure quicker delivery systems to our customers and thus they save
more money.
DELL`S ASSEMBLY PLANT
• Dell also has assembly plants in Austin, Texas, and central Tennessee.
• distribution centers in Reno, Nev, Cincinnati, and facilities in Brazil, China,
Malaysia and Ireland.
• This leads to not only impracticably long supply chains but also to delivery
delays that risk missing sudden changes in demand of evolving products such
as personal computers.
• In addition, being close to consumers reduces delivery time and increases
customer satisfaction.
MARKET ADVANTAGES
• The entire direct-to consumer business model, not just its logistics approach, gives it
cost and price advantages over competitors.
• Dell gets a two-to-three point cost advantage by delaying assembly until a customer's
order is received.
• This approach scales operations to actual customer demand, which further enhances
the effect.
• By this technique Dell cope up with high labor wages in USA compare to Asia.
• Depending on the project and the savings to the company, workers may get cash
compensation, management recognition or other benefits from their contribution.
DELL`S MANAGEMENT
• Dell keeps three or four days' finished inventory on hand versus 30 to 45 days' worth at
some competitors.
• Parts inventory is replenished as often as every 90 minutes.
• Supply chain efficiencies from lean inventory management bring an additional four or
five points cost edge.
• Dell maintains strong relationships with suppliers such as Microsoft, Oracle and Intel to
get fastest inventory.
• Eliminating middlemen gives Dell another five-to-10-point leg-up on competitors' costs.
CONCLUSION
• Dell research indicates the company enjoys a 6.5 percent price advantage over
competing computer makers.
• In addition, mining customer order information for forecasting purposes gains
the company another 14 or 15 cost points.
• Dell is a star performer on the S&P 500.
• Elliff said, "The proof is in the pudding,“. (Scott Elliff, president of supply
chain consulting firm Capital Consulting & Management in Charlottesville,
Va)
