Rambo's Blog

Importance of supply chain: In today’s marketplace, selling a product is sometimes easier than getting it to customers. Companies must decide on the best way to store, handle and move their products and services so that they are available to customer in the right assortment, at the right time, and in the right place. Physical distribution and logistics effectiveness has a major impact on both customer satisfaction and company costs.

Supply chain involves managing the inbound distribution, outbound distribution and reverse distribution. Inbound distribution is moving products and material from supplier to the factory, outbound distribution moving products from the factory to resellers and ultimately to the customers and Reverse distribution is moving broken, unwanted or excess products returned by consumers or resellers.

Came across interesting webcast about the the next generation Supply chain management(free registration required to access the article). This is something that has been preseneted in planet 2005 conference sponsered by i2 technologies. This article talks about the i2 technologies view for future generation supply chain management and the presentation by some of the top companies about their supply chain management. DELL briefly explained their supply chain process during the conference. My initial plan was to present on next generation supply chain management, the information was way too much to cover so decided to go with supply chain management in DELL.

Dell is mainly operated on the priciples of “Be Direct” and “Build to Order”, in Dell nothing would be build with out any customer order. Dell collects all the customer orders for every 2 hrs and notifies the Suppliers about the bills of material required. For Supplier it takes around 90 Minutes to bring the supplies to Dell’s plant and another 30 minutes to unload and place them in assembly line. The Manufacturing, Sales and Marketing groups work together in making the whole process more efficient. Manufacturing and sales data keeps sychronized to reflect the real time information. Suppliers will be provided with forecasts every week that would help them in positioning their inventories.

What are the customer benefits from the Dell’s supply chain management.

1. Prvoides customization ability to customers as all the computers built on order.
2. Product quality.
3. Price for formance.
4. Reliability, Service and Support.
5. Latest technology.

One more important benefit is Demand shaping, when a particular component is not available Dell dynamically handles the situation by offering promotions. For example for some reason if 40 GB hard disks are not available, they can track the situation offer discounts on 60 GB hard disk or give promotion of free upgrade.