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MIS @ DELL

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Dell at a Glance

Globally 2nd in computer hardware design, manufacturing anddistribution with a market share of around 16%.(HP is 1st with 19%)

Founded by Michael Dell in 1984.

1987 --first computer systems company to offer next-day, on-site productservice .

Greater than $50 Million sales per day through the internet with yearlyrevenue of $55.908 Billion with employee base of 78,000.

Ventured in areas of storage products, workstation systems, onlinetechnical support, appliance servers, network switches, standards-based point-of-sale offering for retail customers, recycling .

Shipped more than 10 million systems in a single quarter (Q4, FY06)

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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

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Dells Value Web Model

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

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 .

Why SCM is so Important in PC business

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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 toreduce product time to market is critical.

Competitors Disadvantages

vis--vis Dell

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Dells Competitive Advantages

Dell is having one of the best SCM in the world.

90% supplies ordered online using integrated websites ofsupplier 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 itemswhereas 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.

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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 inventoryand 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 hoursto fulfill actual customer orders.

Dell Chooses i2 SCM S/W package

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RFID @ DELL

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What is RFID

RFID stands for Radio Frequency IdentificationDevices.

RFID is a 3 part technology consisting of:A reader

A receiver with decoder

A Transponder

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RFID applications

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RFID at Dell - Manufacturing

Tracking code and Computer assembly instructionsare added to the tray.

This determines the specific line to which the trayshould go to.

At every stage of the assembly, the tags are read bythe antenna for specific instructions.

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RFID at Dell - Shipping

Once assembled and tested, production informationis inserted into the tags and sent to a shippingstation.

At the shipping station, the RFID tag transfers datato the control PC.

This control PC uses this information to print theappropriate label.

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Benefits of RFID

Production stops have reduced dramatically.

Labor can be allocated by minimizing repetitive

activities.

Returns due to wrong shipping of products havebeen minimized.