Dell Supply Chain Linkoping 2004

8/2/2019 Dell Supply Chain Linkoping 2004

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NOFOMA 2004NOFOMA 2004

Per ErikssonPer Eriksson

Director Dell|EMC Europe, Middle East & AfricaDirector Dell|EMC Europe, Middle East & Africa

Dell Supply ChainOverview


2/31

www.dell.com

Dell

Founded in 1984

#1 computer systems company in the world*

#1 in US, #2 in EMEA, #3 in Japan, #4 in Asia Pacific

Pioneer and leader in direct business

A leader in Customer Service & Support**

Industry leader in growth, cost, profitability

$43.5 Billion in Global Revenue

Approximately 47,800 Employees Worldwide

*IDC Q1 2004 Final Data

**Technology Business Research Inc. Corporate IT Buying Behaviour & Customer Satisfaction Study Q1 2004,

Dell ranked #1 in desktops, joint #1 in notebooks & #2 in servers,


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www.dell.com

Manufacturing

PenangPenangMalaysiaMalaysia

XiamenXiamenChinaChina

LimerickLimerickIrelandIreland

NashvilleNashvilleTennesseeTennessee

AustinAustinTexasTexas

PortoPorto AlegreAlegreBrazilBrazil


4/31

www.dell.com

Business model

Low inventory and investments

Service and Support

Eliminate the reseller

Time to volume

Build to order


5/31

www.dell.com

Q1 Financial Performance

Liquidity Generated $1.0B inCash from Operations

$11.9B in Cash andInvestments

CCC -36 Days Repurchased 34 M

shares for $1.1B

Growth Units +25% Revenue $11.54B*

Profitability Gross margin = 18.0% Opex % revenue = 9.6% OpInc $966M EPS $0.28, 22%Y/Y growth

$

* New DellRecord


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www.dell.com

What do mean by a SupplyWhat are we really talking

about when we saya

Supply Chain?

Supply Chain Got to Have one, its all the rageI want my people to go out and buy one


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www.dell.com

$TIME

RAW MATERIALS CUSTOMER

FINISHED PRODUCT

1.

2. R M CFP

$TIME

3.R M CFP

TIME

$

ANSWERANSWER

How to get Product to the Customer faster and get the return faster!


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www.dell.com

One way

Stock

Build & test

LagStocker

Distribution

Reseller

Stock

Another way

Customer order

Manuf. Test &

Integration

Customer order

Integration

5-7 days

5-7 weeks

Suppliers

Suppliers

The Dell way..


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www.dell.com

0

50

100

# Days of Inventory

65 Days

27 Days

Manufacturer & DellReseller

4 Days

Technology Changes ReducedComponent Costs

Low Inventory Model

8COST

# Days ofInventory


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www.dell.com

90

95

100

105

110

115

120

-14

-12

-10 -8 -6 -4 -2 0

Typical

Dell

Relative

ComponentCost

Weeks Relative to Delivery

With 4 DaysInventory,

Dell Buys Here

With 35 Days Manufacturer Inventory,and 35 Days Reseller Inventory, Channel

Manufacturer Buys Here

10-12% Cost

Advantage

The Benefit of Low Inventoryin a Deflationary Industry

8COST


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www.dell.com

ProductProduct developmentdevelopment

Proprietary

Co

st

Co

st

Standardizing Open Standards

SAN

HPCC

NAS

2/4-way Servers

8-way Servers

DAS

Fabric

Computing

Workstations

Notebooks

DesktopsManaged Services

Professional Services Wireless

LAN

Dell monitors,

architectsand helps drivestandards

Dells collaborative

R&Ddrives adoption

Dells operational efficiencyhelps drive value forward


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www.dell.com

Supply Chain Management @ Dell

Information

Triangle

2.


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www.dell.com

Superior Customer Experience

World's No. 1 maker of personal computers

4 days-

Low Backlog-

Low E&0-

Productivity

Flexibility

Velocity

Build To Order

InventoryInventoryCapacityCapacity

Customer InformationCustomer Information

Use Information or Demand To Replace Inventory and Capacity

Evidenced at Dell by,Evidenced at Dell by,


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www.dell.com

DEMAND

Forecasting

INBOUND

LOGISTICPURCHASING MFGDIST

STORAGE

CHANNEL

DEALER

SALES

PLANT

W/HOUSE

BUILD TO

STOCK

PRODUCT

DELIVERY

Traditional Supply Chain vs Direct Value NetTraditional Supply Chain vs Direct Value Net

CustomerCustomer

Fast Flexible System driven by Customer Choice andActual Orders

Make Products Push out through the channels and hope Customers buy

CustomerCustomer

Traditional

Direct- Value Net

Direct- Value Net

CustomerCustomer

PartnersPartners

CompanyCompany


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www.dell.com

Reality

30 Days

Forecast

Quantity 100

1.

2.

Forecast and Actual track each other with control

30 Days

+

-

10 %

Control

Pushing the reality check backPushing the reality check back


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www.dell.com

RMSD Performance % Error MPP V's Actual Bookings

-1%

70%

3%

-24%

20%

65%

26%

82%

66%

0%

19%

-14%

45%

-43%

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

100,000

CD48X-W

/R

CD

48X-

W/O-R

DV

D,16X-

W/R

DVD,

16X-W

/OR

CDR

W48X

-W/R

CDRW

48X-W/

OR

Combo

24X-

M/Gray

Combo

48X-

W/R

Combo48X

-W/OR

DVD+RW

4X-W/R

DVD+RW

4X-W/OR

DVD+RW

2X-Slimline

FSD,USB

,16M,SM

ART

FSD,USB

,64M,SM

ART

-100%

-80%

-60%

-40%

-20%

0%

20%

40%

60%

80%

100%

Actual Book Current MPP 30 Day Prior MPP

60 Day Prior MPP 90 Day Prior MPP Current % Error

Lower Limit (drives shorts) Upper Limit (drives $)

Forecast & Actuals Tracking with Control


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www.dell.com

Performance Tracking- Corrective Action

Daily Exception Reports Perf to PlanAlternatives

Lead time Intranetshttp://inside.euro.dell.com/emea/sales/uk/enu/

Web Site choice boards

BU Tracking Performance to Plan

Maps

Process Checklist to speed to solution


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www.dell.com


Structure

3.


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www.dell.com

At a local level in EMEA

SUPPLY CHAIN MANAGEMENT

Business Planning

Procurement

Distribution Logistics

Order Services

Sales Configuration Management

8STRUCTURE


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www.dell.com

Planning


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www.dell.com

Demand Planning Process Design Best Practices

Integrated Forecasting, Planning and Execution Syncrhonisation

(No Second Guessing - Elimination of Multiple different Forecasts S&OP)

Cross Functional forecasting process Get to One Set of Numbers

(BU Outlook, COC MSP, Procurement MRP incl. Hedge & COS Planning)

Top down, bottom up and adjustment capabilities Agile

(Top level , Family Mix Level,Commodity Level with 30 day & 90 day Prior)

Pull based Demand Signals Pull dont Push Plan & Build to Order

(Demand forecast accuracy based Customer demand not Historical OrderPattern)

Performance Monitoring & Tracking Use Processes, Systems, Tools

(Relevant Metrics to measure Performance Exception Reports & MAPEs)


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www.dell.com

Master SalesPlan

(MSP)

BUs

GermanyAustria

SwitzerlandCzech

Poland

BUs

UK

Ireland

Central

Region

Regions

UK/IRegion

+Hedge

=Plan(MPP)

Master ProcurementPlan

(MPP)

Peripheral attachrates

What to buy

BuyersMaster Schedulers

Supply/Demand

issues

Demand

issues

Systemforecast xattach rate

= modforecast

Mod to partnumber

explosion

Integrated Cross Functional Forecast ProcessIntegrated Cross Functional Forecast Process

Marketing Centre ofCompetency (CoC)


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www.dell.com

Procurement


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www.dell.com

KEY PROCUREMENT METRICSKEY PROCUREMENT METRICS

QualityQuality

CostCost

TechnologyTechnology

Continuity of SupplyContinuity of Supply

Field ServiceField Service

LogisticsLogistics


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www.dell.com


Logistics&

Execution

4.


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www.dell.com

Supply Chain Management

Daily Supply Chain Pulse Calls11:00 and 5.00

Exceptions Management

Every Ops Function Represented

Synchronised with Marketing

Weekly Factory Planning and tied

to Finance Plans


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www.dell.com

How a Customer Order Flows

12346789

TESTTEST

A+

www.dell.com

Voiceto

Voice

FacetoFace

Direct to POU

Custom-Designed

computersTraveller

Kitting

BTO

Testing & SI

StagingStaging

BoxingBoxingShippingShipping

RapidShip/DeliveryDirect Order

Materials


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www.dell.com

Dell Supply Chain Management

Supply Chain Management coordinates information, materials,and logistics to support customer requirements.

SLC

Supplier

Supplier

I

Dell

I

Customer

Customer fulfillment - 2-5 daysMaterials ordering cycle - 10-120+ days

Demand/ Supply

Management

Global \ Regional

Procurement

Continuity of SupplyContinuity of Supply

Demand ManagementDemand Management

Build to customer specificationsBuild to customer specifications

Sales


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www.dell.com

Internet

R&D Production Sales Service/SupportMarketing

Businessmodell:

Internet

Customers

ImageWatch

HistoryraportsOLOS/

OrderWatch

CampaignsPrice

/E-Value

Order-function/

configuratorE-Quote

+ 60000pages

interactivesupport


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www.dell.com

Culture of change

Employees owns the business

Owning the results at all levels

Customer focus everywhere The Customer Experiance

Operational leadership

Fast organisational and change of direction

Experimental

Organisational culture


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www.dell.com

Thanks!

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Dell Supply Chain Linkoping 2004

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