GROUP 1:

NGUYỄN ĐĂNG CHÍ| VÕ SƠN LÂM

ĐOÀN NGỌC CHÂU|LÊ ĐỨC HUY

LECTURER:

Mr. NGUYỄN QUỐC BẢO

Information system management

DELL PC & LAPTOP‘S

SUPPLY CHAIN ANAGEMENT

DELL LAPTOP & PC’S SUPPLY CHAIN MANAGEMENT 2

Contents 1. Supply chain management definition .............................................................................................................. 3

2. Introduction about Dell ..................................................................................................................................... 3

3. Quality management ......................................................................................................................................... 5

4. Logistic management ......................................................................................................................................... 7

5. Demand management ...................................................................................................................................... 11

6. Inventory management ................................................................................................................................... 13

7. Cashflow optimization ..................................................................................................................................... 14

8. Customer Service ............................................................................................................................................. 16

9. Benefits and limitation .................................................................................................................................... 20

10. References ........................................................................................................................................................ 22

DELL LAPTOP & PC’S SUPPLY CHAIN MANAGEMENT 3

1. Supply chain management definition

Supply chain management (SCM) is the management of the flow of goods and services.[2] It includes the

movement and storage of raw materials, work-in-process inventory, and finished goods from point of

origin to point of consumption (Wikipedia).

2. Introduction about Dell

Dell Inc. is a multinational corporation of the United States in the development & commercialization of

computer technology and headquartered in Round Rock, Texas, United States. Dell was founded in 1984

by Michael Dell. This company is the 28th largest income in the United States.

Dell sells personal computers (PCs), servers, data storage devices, network switches, software,

computer peripherals, HDTVs, cameras, printers, MP3 players, and electronics built by other

manufacturers. The company is well known for its innovations in supply chain

management and electronic commerce, particularly its direct-sales model and its "build-to-order" or

"configure to order" approach to manufacturing—delivering individual PCs configured to customer

specifications. Dell’s Vision is "Whatever changes the future may bring, our vision”

Dell's mission is to be the most successful computer company in the world at delivering the best customer

experience in markets they serve. In doing so, Dell will meet customer expectations of:

highest quality, leading technology, competitive pricing, individual and company accountability, best-in-

class service and support, flexible customization capability, superior corporate citizenship, financial

stability

Supply chain model of Dell :

DELL LAPTOP & PC’S SUPPLY CHAIN MANAGEMENT 4

Components of Dell's supply chain: Each component in the supply chain have their roles. The

organization and good management components will bring tremendous value to the enterprise

Supplier: Dell's suppliers from producing computers and components corporations, such as Intel,

AMD processors; Seagate, Maxtor, Quantum .. hard drive; Samsung, Toshiba, Micron ... the RAM chips;

DELL LAPTOP & PC’S SUPPLY CHAIN MANAGEMENT 5

Sony, Philips, Nokia, Samsung, Acer ... for the screen; SCI, Solectron for printer components; Hon Hai

for the computer case and connectors; Microsoft for software and operating systems; And much of the

original equipment manufacturer (OEM) in Taiwan for other components. Dell has manufacturing

locations in multiple cities across Asia (Chennai, Penang, Shanghai, Xiamen, South China, Yantai,

Taiyuan, and most recently announced Chengdu). Dell also uses 12 distribution sites across the Asia

Pacific and Japan region.

Some retailer: Walmart, Best Buy, Costco,

Customer (End-user): The main group of Dell customers includes individual person, small

company, education and large company.

3. Quality management

Dell builds web pages for its top 20 suppliers who provide about 90 percent of the components Dell

purchases for its computers. Via these web pages, Dell's suppliers can provide real time information on

their build capacities, capabilities, inventory levels, and current costs. Similarly, via these web pages

(Dell created Web-based links for their suppliers, much the same way that they created for their

customers), Dell can provide their suppliers with current forecasts, inventory data, quality data, and

future demand schedules (including daily production requirements), technical requirements, and pricing

requirements.

In fact, every quarter Dell meets with its suppliers to provide direct feedback on performance and future

expectations. The performance is evaluated through a scorecard that compares each supplier with its

competitors based on cost, quality, reliability and continuity of supply. As a reward, Dell’s well-performing

suppliers are provided with training and support in order to improve their processes.

Dell also electronically passes along to its suppliers data about its defect rates, engineering changes, and

product enhancements. Since Dell and its suppliers are in constant communication, the margin for error is

reduced. Dell employees collaborate electronically with business partners in real time on product designs

and enhancements. Also, suppliers are required to share sensitive information with Dell, such as their own

quality problems. Suppliers follow Dell’s lead because they also reap the benefits of faster cycle times,

reduced inventory, and improved forecasts. Dell also works with their key suppliers, sharing their expertise

and best practices, striving to improve suppliers’ capabilities. Dell work to make it possible for their

suppliers to uphold the same high standards they set for themselves. The nature of the supply “chain” is: a

shared network of interconnected companies and industries - highlights for Dell, the importance of industry

DELL LAPTOP & PC’S SUPPLY CHAIN MANAGEMENT 6

collaboration to set strong supplier standards that create positive change. Sharing information to suppliers

is the leverage business partner of Dell. This help Dell control quality of product from beginning point are

minerals or sources to supplier accessories and endpoint is customers.

Dell’s new PC models are tested at the same time as the networks that they are reside on tested. This

collaboration reduces the testing period from 60 or 90 days to 15.

Dell has been deploying the e-Business software i2 Supply Chain Planner, i2 Collaboration Planner, and

i2 Factory Planner to meet it supply chain needs . The i2 system enables Dell to pull material into its

factories every two hours based on real time customer orders. This system tracks backlog numbers, stock

status, and supplier commitments. It lets the supplier know what parts to deliver to which factories and

be assembled to meet customer demand. Intelligent systems prepare the required parts and component list

for each computer, and check availability. If not in stock, components and parts are automatically and

electronically ordered directly from suppliers, who sometimes deliver in less than 60 minutes.

ValueChain.Dell.com which operates as an extranet between Dell and its suppliers. Through

ValueChain.Dell.com Dell’s suppliers can get informed about the level of inventory in the supply chain,

supply and demand data, component quality metrics and new part transition.

Having 7 cases about Supply Chain of Dell to manage quality of product:

Conflict - Free Minerals: Dell gives policy to refrain from purchasing from any known conflict

sources and they expect that our suppliers adhere to the same standards. They have notified all our

suppliers of our policy on conflict minerals and have asked each supplier to provide us with a

confirmation of their conflict-free status.

Supplier Responsibility: Dell is committed to responsible business practices and to high standards

of ethical behavior. They hold our suppliers to high standards of excellence defined in governing

laws, recognized international standards and conventions, and global best practices. Following three

standard:

o Compliance with Laws and International Standards.

o Dell’s Core Policy Commitments and Supplier Requirements.

o Supplier Engagement, Capability Building and Assessment Program.

Supplier Diversity: “Dell develops strategic, sustainable relationships with a very diverse group of

qualified suppliers. Our customers come from every nation, culture and walk of life, and it’s

DELL LAPTOP & PC’S SUPPLY CHAIN MANAGEMENT 7

important that all aspects of our business reflect that same diversity”, Michael Dell — CEO and

Chairman.

Conflict - Free Smelter: The CFS program provides an independent third-party evaluation of a

smelter’s procurement activities and concludes if the smelter demonstrated that the material they

processed originated from conflict-free sources. The assessment covers two reviews — business

process and material analysis — that take place at the smelter’s site. Once an assessment is

complete, the CFS Review Committee then determines whether the smelter is in compliance with

the CFS assessment protocol.

Coalition Code of conduct: A coalition of technology companies updates the EICC (Electronic

Industry Code of Conduct) periodically to reflect input from a wide variety of stakeholder

organizations. The EICC contains provisions to address performance in areas such as: labor, health

and safety, environment, ethics and management system.

Supplier Global Citizenship Commitment: Dell commits to implementation of their Supplier

Principles through a self-assessment tool and utilizes the industry standard tools that have been

developed by the EICC and the GeSI (Global eSustainability Initiative).

Policies and Positions: Promulgating environmental and social policies govern the way they build

their product. Ensure workplace is inclusive and safe. The materials used in their products will be

held to high ethical and environmental standards.

4. Logistic management

Some transportation partners of Dell are DHL, FedEX, UPS and DB Schenker. There are famous

transportation companies in the world and they ensure transportation of Dell will be efficiency and

environmental stewardship.

Dell is an end-to-end IT solutions provider rather than a PC supplier. They have multiple supply chains

worldwide. And nearly half our sales are through channel partners, which place large orders further in

advance. As they explored the most efficient transportation modes and routes for each supply chain, they

also needed to minimize environmental impact as much as possible. They change transportation from the

Truck to the Rail and from the Air to the Sea.

Another of successful of logistic service is packaging innovation – 3Cs strategy: Cube - Reduce packaging

size; Content - Use recycled or sustainable materials; and Curb - Make packaging easily recyclable. 3Cs

strategy help Dell reduces a lot of cost for packaging, materials also increasing volume transportation.

DELL LAPTOP & PC’S SUPPLY CHAIN MANAGEMENT 8

Reverse Logistics: Their new efforts to decrease product returns resulted in making 94 percent of returned

assets available for resale through our Dell Outlet, up from 90 percent in FY11. These items can be quickly

returned to usefulness and resold as Certified Refurbished, Dell Outlet New or Scratch and Dent, and all

Dell Outlet machines carry a Same-As-New warranty. The remaining six percent of returned assets are

recycled responsibly.

Dell’s organization of logistics in EMEA (Europe, the Middle East and Africa) provides a good illustration

of the general logic for logistics. All of Dell’s inbound logistics for material needed in assembly of PCs are

handled by suppliers who must have supply hubs or production facilities located within 30-minutes' travel

time of the Limerick plants. Third parties operate some hubs for a number of suppliers. On the outbound

side, Dell has five distribution hubs in EMEA to take advantage of location close to major markets,

transportation networks and logistics expertise. These distribution hubs are as follows in EMEA:

� Limerick for Ireland, Eastern Europe, Middle East and Africa (except South Africa);

� Liverpool for UK;

� Tillberg, Netherlands for middle Europe;

� Gottenberg, Sweden for Nordic countries;

� Johannesburg for South Africa

A different logistics partner operates each hub. Similar outbound staging areas and arrangements with

logistics partners exist in the Americas and Asia-Pacific.

Call Centers

Dell makes extensive use of call centers, both for sales and for technical support. Dell generally organizes

its call centers around its major customer segments with different call centers for relationship and

transaction customers. It tends to locate call centers regionally to optimize telecommunications and

language considerations, but customers may at different times be routed to call centers in different

locations. Regional call centers are located as shown below. The EMEA call centers illustrate the

complexity within any one region.

� U.S.: Round Rock and Nashville. A new call center is planned in Fort Worth, Texas.

� EMEA: Limerick, Ireland; Bracknell and Bray, U.K. Relationship customers are handled through

Bracknell, whereas HSB customers are handled through regional centers in Montpelier, France for France,

Spain, Italy and the southern countries; Amsterdam for the middle and central countries; Copenhagen for

the Nordic countries; and Bray, Ireland for the UK, Ireland and other English speaking countries. The

DELL LAPTOP & PC’S SUPPLY CHAIN MANAGEMENT 9

Limerick call center specializes in 13 higher-level technical issues, and also operates as a backup call center

when telecommunication problems occur or call volume is exceptionally high.

� Asia-Pacific: Bangalore, India.

Dell logistics demonstration

The factory gets orders two times per 24 hours. Dell’s sub-suppliers receive the information about the

order at the same time Dell’s factory gets it so they know exactly what Dell is going to request. This

information collected in documents called “the traveller” it tells exactly what parts the computer should

exist of. The part where Dell puts the computer together takes only 5 minutes. The total time for a

product in the factory is 3 days and the reason for this is that they test all computers before they distribute

them to their customers. The total lead-time, from customer order to customer receives the computer, is 6

days. Dell placed their European factory in Limerick (Ireland) for the reason that there were a lot of

educated persons that were unemployed Before they transported the merchandise from Ireland-England-

FranceHolland-Germany-Denmark and finally to Gothenburg, Sweden. This trip took about 60 hours and

required 6 marshalling which brought low security and high damage risk. Today the transport route

begins in Ireland further to England and from there directly to Gothenburg by ferry. The trip still takes 60

hours but this transport method brings less marshalling and only one driver is necessary. With this

DELL LAPTOP & PC’S SUPPLY CHAIN MANAGEMENT 10

solution Dell saves 4 dollars per packaging and one computer consists of 3 parts, the saving is 12 dollars

per computer. All consolidation for each country is done in Limerick in Ireland.

For example, Dell’s logistic provider is Irish Express Cargo (IEC) and they have a strong strategic

alliance with Dell for the whole of Europe. In Sweden it is Danzas that is responsible for the deliveries

since they have a partnership with IEC. Therefore, when Dell has a shipment, their contract is with IEC

who in its turn takes in DFDS for the transport from Ireland to Gothenburg. IEC is a transport company

situated in Ireland, who has specialised in transporting of computer goods. Dell is a parcel customer to

Danzas and is relatively large, however, in turnover, Dell is not the largest. Furthermore parcels are the

most inexpensive product to transport in comparison to large shipment, part goods; on pallets and it is the

smallest of services Danzas offers. The only time when Dell has full truckloads is into the terminal in

Gothenburg from Ireland.

The truck is loaded several times with different components from the sub-supplier and the reason for this

is to fill up the truck as much as possible. When then the truck leaves Dells factory in Limerick they send

via their system Atlas to IEC all information about the load and IEC then forwards the confirmation to

Danzas, which includes how many goods are on the way. The Atlas file is received at Danzas 36 hours

before the goods arrive. Danzas has a deadline for booking space on the fixed line haul at 12.00am. The

booking can be executed with help of the file, which contains volume and weight measures of the goods

and Danzas can from that information do an approximate booking on the line haul. If the booked capacity

isn’t enough they will bring additional capacity, although it is hard to obtain, since there is a boom on the

transport market and Danzas is forced to decline some customers. In the Nordic countries Danzas

distributes Dell computers to 32 different areas.

Since 2000, if you order a customized PC on any working day in the United States, the computer will be

on the delivery truck the next day. A complex custom-made PC will be delivered in no more than 5 days.

The functions of Dell’s Logistics Services:

Warehousing service: Stocking solution for rapid deployment to a staggered delivery schedule.

Drop in Box: Add additional custom installation documents and/or other accessories into the

shipping box.

Remove Item: Removal of Dell default/standard items from the shipping box.

Multi – Pack: Provide customer systems and specified documentation in approved multipack

containers.

DELL LAPTOP & PC’S SUPPLY CHAIN MANAGEMENT 11

Over – Pack: over-pack multiple system and/or accessory items into a larger carton to reduce the

number of separate boxes being received.

Pallets & Crates: Predefined non-standard or customer specific pallet or crate design, configuration

or palletization.

Custom Packing: Packaging designed to customer specifications.

Ship Box Label: Applying predefined/standard and/or custom labels which may include customer

defined and/or provided data to the system ship box.

Order Consolidation: Manage the receipt and consolidation of multiple Dell and third party

hardware, software and peripherals or customer-consigned parts and arrange delivery of all parts in

single shipment.

Time & Date Specific Delivery: Delivers product on a specific time or day. This service may

include: Time Specific, After-hours Specific, Date Specific, Weekday Specific, Weekend or Holiday

delivery.

Inside Delivery: product delivery within customer location and/or additional delivery services that

are not standard method by the carrier. Can include the following: Depalletization, Inside Single

Destination, Inner Office Distribution

Customer Carrier: Manage the transportation process using Dell and non-Dell standard logistics

carriers in the transportation of products.

International Shipping: Prepare international shipment with all the required documents. Direct ship

to end users in direct or indirect countries with accurate Tax and Export compliance documents.

Reporting & Notification: Prepare standard & custom shipping paperwork, packing lists or labels,

logistics and transportation reporting and advance notification of deliveries and reports.

5. Demand management

Direct sale model includes in CTO and BTO.

CTO (Configure to order): you can choose different hardware to suit your needs such as adding more

RAM, processor speed, selecting a DVD versus a CD-ROM, or adding more extra disk space, etc...

BTO (Build to order): Dell pre-builds what they it believes will be the most popular configurations.

In the Fall of 1999, Dell introduced the Dell Direct for SAP Program, where it partnered with SAP AG to

allow customers to install SAP inter-enterprise business solutions on Dell PowerEdge servers. The

program uses Dell's mass customization technology to factory-install SAP R/3 solutions on Dell

PowerEdge servers and PowerVault storage according to customers' exact specifications with systems

ready to plug and play after arriving at customers' sites. Under the Dell Direct for SAP Program,

DELL LAPTOP & PC’S SUPPLY CHAIN MANAGEMENT 12

customers access Dell's Website directly to specify and order hardware and software configurations for

SAP solutions on Dell PowerEdge 4300 or 6300 servers. A sizing and selection tools feature is available

online for customizing the configuration to a customer's exact needs and budget.

New i2 technology was used to coordinate the build-to-order processes from order placement to customer

support. By using the software Dell is able to profile customers, target them using their medium of

preference, and also measure the results. Dell integrated the supply and demand side of the business by

using unique software that would eliminate inventory overages.

To segment the market (individual person, smaller company, education and large company) makes it

easier for Dell to use Management By Objectives (MBO) and that gives reduced costs. For example when

you want to sell a product you send out an offer to many different customers, instead of sending out 100

offers to random customers and in the end only do business with three of them, you can send out three

offers and do business with all three. This is possible if you use MBO.

Selling direct without a reseller or channel is not a new practice; mainframes and minicomputers were

originally sold directly by companies but only to very big customers. This is because selling direct is

expensive and requires complicated processes and a rather complex organizational structure. But for Dell,

today, it is able to sell directly and has continued to sell direct to many of the Fortune 500 companies

because it has created a sophisticated supply chain infrastructure that thrives on real time information so

that the business can quickly react to changes and customer’s need.

Demand forecasting is the area of predictive analytics dedicated to understanding consumer demand for

goods or services. That understanding is harnessed and used to forecast consumer demand. Knowledge of

how demand will fluctuate enables the supplier to keep the right amount of stock on hand. If demand is

underestimated, sales can be lost due to the lack of supply of goods. If demand is overestimated, the

supplier is left with a surplus that can also be a financial drain. Understanding demand makes a company

more competitive in the marketplace. Understanding demand and the ability to accurately predict it is

imperative for efficient manufacturers, suppliers, and retailers. To be able to meet consumers’ needs,

appropriate forecasting models are vital. Although no forecasting model is flawless, unnecessary costs

stemming from too much or too little supply can often be avoided using data mining methods. Using

these techniques, a business is better prepared to meet the actual demands of its customers. Approaching

for building forecast models are Neural Networks and Data Mining, which are capable of modeling even

very complex relationships in data. Demand forecasting is a very complex issue for which these methods

are well suited. Multilayer Perceptrons and Radial Basis Function neural networks, Multivariate Adaptive

Regression Splines, Machine Learning, and Tree algorithms can all generate predictive models for this

application. Generally, demand patterns consist of some basic classes of components, seasonality, and

trend.

DELL LAPTOP & PC’S SUPPLY CHAIN MANAGEMENT 13

Based on the advantage of technology, Dell is able to underprice their competitors by 10%-15%.

Additionally, Dell’s production is based on forecasting. The forecast can go wrong with maximum 10 %

and is done 12 months in advance.

6. Inventory management

Famous inventory management solution of Dell are real time and just in time (JIT).

Dell builds most computers only after they are ordered. This is done by using just-in-time

manufacturing, which also enables quick deliveries, low inventories, little or no obsolescence, and lower

marketing and administrative costs

Thus, in the case of Dell, a computer is built only after a 12 customer has placed an order; then lean

manufacturing and just-in-time production take place. This means that once an order is placed,

configuration details are sent to the manufacturing floor and the assembly begins; once the computer is

built and the requested software is downloaded, it is shipped by a third party logistics to the customer.

The choice of a build-to-order and JIT manufacturing procedure has several advantages for Dell. First,

the level of inventories is very small, leading to low inventory costs and faster response to demand

changes – for instance, when a new microprocessor comes out in the market, Dell can immediately order

it from its suppliers, as there is no excess inventory to get rid of first. Also, it is common that customers

pay for an order before Dell pays its suppliers for the product’s components, thus letting Dell operate on

a negative cash conversion cycle.

Under the effort of minimizing its inventories, Dell demands from its suppliers to provide them with

goods in a “high speed” – so instead of orders such as “deliver 5000 to this warehouse every two weeks”,

the form of orders is more like “tomorrow morning we need 6.795 to be delivered at door A3 (of the

warehouse) by 7 am” . A new notion that Dell has introduced is the one of inventory velocity, and it

focuses on minimizing inventory and maximizing speed. It is worth mentioning that Dell holds an

average of less than 6 days of inventory, while the corresponding average of its competitors is 6 weeks.

In order to deal with these high rhythms, the main suppliers are required to maintain inventory near or in

Dell’s plants; they can either produce close or keep inventories in revolvers or supplier logistics centres

(small warehouses close to Dell’s assembly plants, that are shared by suppliers who pay the

corresponding rent. Of course, all the practices described above require close collaboration between Dell

and its suppliers – mutual trust and sophisticated data exchange are key factors to achieve it.

DELL LAPTOP & PC’S SUPPLY CHAIN MANAGEMENT 14

Dell builds and stocks quantities of Eligible Products based on customer’s purchase orders of Eligible

Products for predetermined periods of time. Customer may select initial time periods of 90, 120, 150 or

180 days, depending on regional availability, at a defined price for each level. If Customer’s purchase

order contains varied shipment quantities to multiple ship-to locations, Dell may break down the

purchase order into separate orders in its ordering system according to the ship to locations. The Eligible

Products will be warehoused at Dell’s (or Dell’s contractor’s) facility (“Merge Center”) until Customer

submits a notice of shipment, requesting shipment of the Eligible Products. After Dell receives and

accepts Customer’s shipment notification, and subject to availability, the Eligible Products ordered by

Customer will be shipped from Merge Center.

7. Cashflow optimization

Expand selling channel: In 1991, attempting to increase revenue growth, Dell decided to change strategy

and entered the retail channel by selling a select set of predetermined product configurations through

large retail stores such as CompUSA, Staples, and Sam's Club. With this strategy, Dell could no longer

maintain their price premium and experienced an increase in capital costs due to the 60- day finished

goods inventory for the channel. Dell quickly switched back to a built-to-order model and was able to

turn inventory twice as fast as retailers because it no longer has to hold channel inventory. Although the

mass customization strategy increased manufacturing costs by 5%, it allowed Dell to a gain back its 12%

price premium through add-ons and upgrades.

Using customer information to leverage mass customization: To make mass customization work, Dell

discovered that it had to listen to the voice of the customer. Dell customers visited Dell's portable

business unit in Round Rock, Texas to voice their needs as well as learn what was coming. It was through

these meetings that Dell learned that its corporate customers were more interested in reliability,

consistency, and the ability to customize equipment with screen size and memory. In 1997, Dell

responded to this needs with its new Latitude CP line44. This direct relationship with customers gives

Dell a competitive edge over its competitors who typically have to go through resellers.

Dell offers three different kinds of payment options. They are, credit card, advance payment and invoice.

When paying with credit card the amount is withdrawn prior to the delivery and for invoicing the

payment conditions are 10 days net. Dell confirms a customer order in writing. all over the world (cash

customers pay direct and invoice customers pay in 30 days). This result is that Dell only has to pay the

interest for 21 days at the same time that Dell has 30 days to pay their subsuppliers. This leads to that

DELL LAPTOP & PC’S SUPPLY CHAIN MANAGEMENT 15

Dell can have the sub-supplier’s money for 9 days and earn the interest before paying. If Dell just ran the

business without margins, it would still bring them interest revenue. This is why they have such high

profit percentage on their own capital.

Apply technology, Dell has optimized inventory to sell and loss if cann’t sell.

Dell focuses on having as few partners as possible and instead, focuses on having long lasting

relationships and them while supporting them to maintain their leadership in technology and quality. This

resulted in closer and even more cost-efficient relationships with the suppliers, further lowering costs and

delivering faster component shipments. Dell's approach to mass customization is to create an efficient

order fulfillment and supply chain process that provides rapid delivery, competitive prices, and available

computer options to the customers.

To ensure long-term, cross-functional collaboration, Dell integrated supply chain design into existing

product design processes and created a phase-gate review process to standardize future changes to the

supply chain. "Phased releases drive step-function improvements, rather than constant adjustments," said

Ms. Clayton. Finally, metrics across all functions were aligned to the goals of the supply chain portfolio

DELL LAPTOP & PC’S SUPPLY CHAIN MANAGEMENT 16

In addition, Dell has developed itself and sold many application and software to manage

operational activities, enterprise solutions, servers, storage, networking products,

telecommunications, media and entertainment, end-to-end IT solutions for retail, information-

based healthcare, security, mobile, training, data analytics. For example, Dell reduces enterprise

hardcopy printing costs by 50 percent with Lexmark solution,

8. Customer Service

The production is produced to customer order and they have support 24 hours a day.

First web-based system for customer service is Premier Pages of Dell at http://premier.dell.com which

are custom-designed Web pages containing purchase data. This system also has a paperless ordering

process, with the customer’s existing technology configurations already captured. The process of

knowing the customer begins when the customer orders a PC. The PC is built after the customer orders it.

This means that Dell has to have a direct relationship with the customer. The final system that Dell is

using to maximize CRM is the Dell South Africa’s implementation of an enhanced CRM system with the

help of IS Partners, an information systems company. Sales, marketing, financial and management

segments benefit significantly from this software. The Dell staff has easy access to the detailed

DELL LAPTOP & PC’S SUPPLY CHAIN MANAGEMENT 17

demographic information about customers, customer sales history and trade relationships. Sales

management can track activity within accounts, and lapsed quotes can be acted on. The marketing

department can track customer activity, product sales, and marketing mixes.

For example, Ford Motor and Shell Oil. These pages reside securely within the customer's firewalls and

they provide purchasing and technical information about the configurations. By using these pages,

customers like Ford and Shell can configure, price, and buy systems at the agreed-upon price. They can

track orders and inventory through detailed account purchasing reports by group, geographic location,

product, average unit price, and total dollar value. This also allows them to better manage their assets.

They can also access contact information for Dell account, service, and support team members. They can

check an order and find out if their system is sitting on the FedEx dock in Memphis, and how soon they

can expect delivery. In fact, customers like Shell Oil are transitioning from paper purchase orders to

electronic purchase orders. Another thing that Dell does well is setting up employee purchase programs

with many companies.

The second way: Catalog in the application of enterprise will be integrated with Dell’s ERP. This

system accepts enterprise can use systems to order from ERP system ( ERP Procurement

DELL LAPTOP & PC’S SUPPLY CHAIN MANAGEMENT 18

Application) of them( usually with only larger company). CRM of Dell will manage Catalog of

enterprise. Enterprise will be repay this catalog to adjust order.

For example: British Airway(BA) used Dell like strategy partner. Dell provided about 25000 laptop and

desktop for employees of BA. Beside, Dell provided 2 shopping online systems for BA. This thing was

Dell accept BA to watch for, purchase and check the orders through website which Dell customize

suitable with BA. In website, BA could choose and configure laptop or desktop difference to suit each

business department. The employee of BA would be accept their choice and order their computer suitable

with their use demand through internet system which was connected with Dell’s system.

Dell's Enterprise Resource Planning (ERP) B2B E-Commerce Solutions Helps Companies Save Time &

Money:

Better Customer Relations

Simplifies Purchasing Process

DELL LAPTOP & PC’S SUPPLY CHAIN MANAGEMENT 19

No Duplicate Entries

Fewer Errors

Improves Accounts Receivable Turnover Ratio

Besides, Dell is also using several other information technologies, including e-mail, EDI, video

teleconferencing, electronic procurement, computerized faxes, an intranet, DSS, a Web-based call center,

and more. Dell also uses the Internet to create a community around its supply chain. Dell’s corporate

portal has links to bulletin boards where partners from around the world can exchange information about

their experiences with Dell’s products, logistics, and customer service. Old and new solution of Dell will

introduce below:

In 2005, Dell’s Information Technology group was faced with a supply chain management system that

had reached its limits on expensive, proprietary servers running the Unix operating system. The group

undertook the complete migration of the system to Oracle 10g Real Application Clusters running on low-

cost industry standards-based Dell Power Edge servers. By moving the application to Dell servers when

it did, Dell IT avoided significant new expenditures in proprietary Unix-based servers, achieved

increased server uptime, and provided an easy path for growing the systems as needed by adding

additional servers to the cluster. The increased performance of x86-based industry standard Dell

PowerEdge servers has enabled the deployment of such database software as Oracle 10g Real

DELL LAPTOP & PC’S SUPPLY CHAIN MANAGEMENT 20

Application Clusters. By sharing a large database across multiple PowerEdge servers, Oracle 10g RAC

provides for very cost-effective scaling, high reliability, and the ability to add capacity by adding

additional low cost Servers rather than buying larger, more expensive proprietary Unix-based servers.

With new solution, manage over 1 million Dell part numbers across approximately 200 product families,

and over 2 million Bills of Materials (BOMs) per year.1.8 million Purchase Order line per year, from

more than 5,000 suppliers worldwide. The cost component of the systems can runs in batch weekly,

monthly, quarterly, with each run rolling up total material costs, solve 3 million inventory movements

daily from stock rooms to the factory floor, transmit 3 million messages for report, analysis and factory

scheduling, handle approximately 15,000 items per day and vendor information and contact information.

SCM Oracle database application in Dell’s Americas consists of approximately 3,000 database objects

(functions, packages, procedures, trigger, tables, and views). The same SCM system is also supported by

6 Dell PowerEdge 2650 application servers, 5 internally integrations, approximately 125 batch jobs, and

about 500 user interfaces deployed to support the entire SCM application.

9. Benefits and limitation

9.1 Benefit of Dell’s supply chain

The company has been a staple in the top five of the AMR Supply Chain Top 25 every year since it

started in 2004.

DELL LAPTOP & PC’S SUPPLY CHAIN MANAGEMENT 21

With the advent of the Internet, by 1998, Dell became an Internet leader by topping $12 million a day and

offered its "Premier Pages" to its customers, as well as established web-based connections with its

suppliers. By 2000, Dell was number one in desktop sales, number one in notebook sales, and number in

desktop sales, and had risen to number two in Wintel server sales.

The company is the third largest PC vendor in the world based on unit shipments, behind only Lenovo

and HP. It is the market leader in the shipment of PC monitors worldwide, shipping over 5 million units

in the second quarter of 2014. Dell is also one of the largest technological corporations in the world based

on employees as it employed over 111,000 people worldwide in 2013. This means that the company’s

workforce has almost doubled in size since the number of employees stood at 55,200 in 2005. It is also

among the top 100 American retailers based on its U.S. retail sales, which reached 4.11 billion U.S.

dollars in 2013.

Creating a competitive advantage compared with traditional rivals based on:

Disintermediation (cutting out the middleman): Deleting a player in the distribution chain is a

risky move, but can result in a substantial reduction in operating costs and dramatically improved

margins.

Enhancing customer value: Forgoing the retail route allowed Dell to simultaneously improve

margins while offering consumers a better price on their PCs. This move also gave customers a chance to

configure PCs according to their specific computing needs.

Process and operations innovation

Let data do the driving: Harnessing the easily accessible sales and customer feedback data that

resulted from online sales allowed Dell to stay ahead of the demand curve in the rapidly evolving PC

market. Similarly, sales and feedback data were helpful in discovering new ways to enhance customer

value in each of Dell’s key customer segments.

9.2 Limitation of Dell’s supply chain

Spend a lot of cost for technology in the beginning.

Limiting the application of such technology: Required interoperability of electronic data should

Dell must be integrated with many ERP systems, some steps must still be done manually as data update;

bill.

Another problem is that information and payment not is 100% protected on the Internet

DELL LAPTOP & PC’S SUPPLY CHAIN MANAGEMENT 22

Everything is based on forecast from the last year so drastic changes can cause problems for Dell

and their sub-suppliers because they have customer order production

Direct selling model is higher transportation costs

10. References

http://documents.tips/documents/mo-hinh-thuong-mai-cong-tac-cua-dell.html

http://123doc.org/document/1546950-mo-hinh-kinh-doanh-cua-dell.htm?page=7

http://www.dell.com/us/p/laptops

https://m.facebook.com/notes/ecom-vi%C3%AA%CC%A3t-nam/m%C3%B4-h%C3%ACnh-kinh-

doanh-c%E1%BB%A7a-dellcom-vua-b%C3%A1n-l%E1%BA%BB-m%C3%A1y-t%C3%ADnh-

tr%E1%BB%B1c-tuy%E1%BA%BFn/148486835186414/

http://www.forbes.com/sites/patrickmoorhead/2013/06/21/dells-pc-growth-strategy-in-it-to-win-

it/#f0b00f4cc102

http://www.dell.com/learn/us/en/uscorp1/corp-comm/cr-ca-list-suppliers?c=us&l=en&s=corp

http://www.slideshare.net/daominhthong/chui-cung-ng-ca-dell-dell-scm

https://en.wikipedia.org/wiki/Dell

https://en.wikipedia.org/wiki/Supply_chain

http://documents.mx/documents/dell-vision-and-mission-statement.html

http://scholarworks.rit.edu/cgi/viewcontent.cgi?article=8558&context=theses

http://www.greenlogistics.org/SiteResources/7a76ee40-f62d-4efe-9d4e-47ac2a2a9211_WM1%20-

%20Cardiff%20-%20Supply%20Chain%20Management.pdf

https://gupea.ub.gu.se/bitstream/2077/2437/1/Falk_2000_7.pdf

http://www.sourcetrix.com/docs/Whitepaper-SC_decision_making.pdf

https://documents.software.dell.com/statistics/textbook/demand-forecasting

https://www.marsdd.com/mars-library/case-study-dell-distribution-and-supply-chain-innovation/

http://www.johngattorna.com/documents/Dell_Case_study_for_supply_chain.pdf