“bane University oF Technology Faculty of Managoment Scionoos, ~ Department of Marketing, Supply Chain and Sport Management Subject Code(s [SCUIOTY = Subject Description: | Advanced Supply Chain Management N Course Cod [ADSUTO | Paper Type: ‘Semester Test 1 Test Dat 16 Juno 2020 Duration: Hous tite choice WA Marks eo Long questions/case studies 60, Marks asensor is Moodley External Evaluator: | R Setino - INSTRUCTIONS: Please read the following Instructions carefull apply to those instructiors Faure to do 80 Ie is the student's responsibility to result in consoquences as stated. 4. Reed the questions carefuly and answer all questions on the examination answer satpt provided. 2. All questions to be answered In black or blue pen. No pencis allowed except for drawing of clara 3, This Is an open-bock test, You may use your lextbook, lecture slides, journal articles ‘and any othr printed materials. The use of slactonic devices isnot permite. 4, Ensure that your answers are numbered exactly as the questions. Page 1 of 5Question 4: Doll's Direct Mode! Introduction ‘The Dell Computer Corporation was found in Texas by a 19-year old Michael Dell in his unwversity dorm oom. The company experienced rapid growth and soon overtook Japanese counterparts in terms of profitability and market share, Dell did al this even though the company produces no computer components, Dell does not ‘manufacture any components, butt can produce custom-built PCs in a matter of hours and was able to wrestle away significant market share from Japanese giants in the PC industry. Corporate Structure Del's corporate headqueters are located in Round Rock, Texas, near Austin, which is also home to Dell Americas, the regional business unit for both North and South ‘America. Dell has three additional regional headquarters: Dell Europe, Middle East ‘and Attica in Bracknell, U.K., Dell Japan in Kawasaki, Japan, and Dell Asia-Pacific in Hong Kong. Each of these regional business units reports to tho Office of the Chairman. The company has four manufacturing facies: Round Rock for the ‘Americas; Limerick, Ireland for Europe, the Middle East and Afica; Penang, Malaysia {for Asia-Pacife and Japen; and Xiamen, China for China. Dell's products are sok! in ‘more than 170 countries around the world. ‘The Dell Diroct Model Indirect channels Le Figure 1: PC supply chain through indirect chants PC manufacturers were using indirect sales channels since the inception of the IBM PC in 1981. The general approach to selling PC's to corporations through indirect channels is shown in Figate 1. Under this approach, a distibutorieseller purchased PCs directly from the manufacturer aid distrtbuted them to corporate customers. The resollercustoinised the FC to the customer's requirements, installed components or software as necessary and often provided addiional service and support. There wore ‘afew variations on this theme. For example, reall sales followed a similar supply chain ‘8 Figure 1, except that the PCs were shipped from the manufacturer tothe retailer, \who sold them to consumers. In most cases, these sales were not triggered by orders, ‘but rather by forecasted cemane. Page 2ofDirect channels Das direct model, based on diract sales from the PG manufacturer to the corporate ‘customer orto consumers, is shown in Figure 2. The model was driven by the “slicing” ‘of the computer industry and removing the “middle man.” connor Figure 2: The Dell Direct Nodel Dell pioneered a new tusiness model that focused on speed of execution and ‘minimum inventory. To this end, the company bypassed the dealer channel, seling products directly to customers over the pone. This eliminated the reselle's mark-up ‘and the costs and risks of carrying large finished goods inventories. The Dell direct, model was characterised by high-velocity, low-cost distibution, direct customer relationships, build-to-oréer, Just-In-Time manufacturing, and products and services aimed at specific market sogments. The direct model had several key advantages. By climinating the intermediaries, Dell could dramatically reduce its channel costs. Since ‘every Dell system was built to order, customers got exactly what they asked for. Dell, ‘used the knowiedge it gleaned from this direct contacto talor ts service and support ‘as well as fulure offerings. Since materials flowed faster in Dell factories, latest technology was introduced faster than through the slow-moving indirect channels, Dall relies on information technology (IT) systems to coordinate and manage the supply chain, With supplers, the company sets quality measures and the system is, linked to the supplier to monitor material flow in realtime. Suppliers are told exactly \What the production requirements are. Dell does this in order to get suppliers in ine with its high velocity model of production. ‘Supply Chain Process Dell puts @ strong emphasis on its operations. Every PC manufactured by Dell is specially configured toa customer's order, and the facility has no warehouse space {and no inventory other than workin process. Components arrive from suppliers justin time for manufacturing through the factory's cargo doors. Manufacturing is synchronised to avoid storing parts or finished systems. There is basically no finished ‘900d inventory. AS soon as a product is completed, It's taken out of the factory and delivered to the custome, This process is enabled by Dell's lose relationship with its suppliers. Once Dell picts a reliable supplier, it focuses on reducing inventory levels and increasing speed. For example, Dell rusts Sony to provide high-qually monitors, 0 it is unnecessary to tuck them to the production facility, test them and then ship, Page 3 of 5them (with the rest of the PC) fo the customer. Likewise, Dell rusts UPS to manage tho logistics and distribution channel eo that tho PC and monitor aro properly matched ‘between the Dell factory and Sony's factory. Trust Is cemented by the informational links between Doll and its supply chain partners. Customer Service Dellplaces a strong emphasis on service and suppor as part ofthe product purchase, !tomploys more than 1300 technical support personnel, accessible by phone 24 hours 4 day. Del's systems extend customisation to after-sales service, with the system identifiers used in mansfacturing becoming post-sales service IDs. The system configuration is displayed on service reps’ screens when a customer calls for an "upgrade or needs help. In 90% of calls, the service reps can solve technical support problems on the phone by walking the customer through standard troubleshooting Procedures. This minimises the need for ‘walk-in’ customer service where tho customers would need to take their computers toa physical service centre. But should the need arise, Dell employs third-party providers such as Compaq, who send out technicians to assist customers on-site, Even though feld-servce is contracted out, Dell stil maintains accsuntabiity for the customer service. By creating tightly coordinated relationships with its suppliers, vendors and maintenance providers, Del ‘makes its customers feel ike they are dealing with just one large company, 41.4.4. Analyse the Dell rect model and indicate where the decoupling point or push-pull boundary would be located. Explain why this isthe case. (10) 1.2 Using evidence from the case study and a relevant diagram, examine which ‘global supply chain strategy would be most appropriate for Dell. Make use of Fisher's framework to lend support to your answer in terms of the type of product Dell manufactures and sells, in relation to market characteristics. (20) 1.3. Youare currently an operations manager at Del, Supposing they are using the Principle of postpenoment to streamline operations, you have bean tasked with applying this to your current project. Tho diagram below shows the structure before standardisation. Assuming you can reduce the work in progress Inventories to three with the same number of outputs, what would the new process look ike? Ouline how this design is more efficient. (10) ° . 3 ~ e e a 40) Page Af 5Question 2 United Lines is a multinational shipping and transport company that operates in 10 diferent counties across the world. The nature of the transport sector has meant the company now faces a number of issues. Main among those aro the loss than full or sometimes emply cantainars moving between ports and different inland destinations. ‘Another issue is that executives are struggling to formulate a suitable distribution strategy. You are required to 2A. Advise the company on the problem of directional imbalances including ‘stratagies to cope with this, (10) 2.2 Provide recommendation on distribution channel strategies that the company can apply in thelr supply chain (10) 0 {60} Page 6 of 5