DELL

Dell at a Glance

Globally 2nd in computer hardware design, manufacturing and distribution 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 product service . Greater than $50 Million sales per day through the internet with yearly revenue of $55.908 Billion with employee base of 78,000. Ventured in areas of storage products, workstation systems, online technical support, appliance servers, network switches, standardsbased point-of-sale offering for retail customers, recycling . Shipped more than 10 million systems in a single quarter (Q4, FY06)

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

Dells Value Web Model

Why SCM is so Important in PC business

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

Competitors Disadvantages vis--vis Dell

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 to reduce product time to market is critical.

Dells Competitive Advantages

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

90% supplies ordered online using integrated websites of supplier 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 items whereas 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.

Dell Chooses i2 SCM S/W package

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 inventory and 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 hours to fulfill actual customer orders.

Dell ERP Debacle

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member team was set up for ERP ( SAP) implementation. Cancelled when costs shot up and flexibility of system went down. Reasons for no company wide ERP SAP is like cement, flexible when poured but rigid once it hardens. Decentralization of company into 4 major regions-America Europe , Asia and Japan . Focus on technology which should remain open, flexible and adaptive . Even a small error might be very costly . HP lost $160 million because of SAP implementation errors . Nike lost $100 million because of SAP demand planning error.

Dells Ans to ERP G2 Architecture

The G-2 architecture enables company to run best-ofbreed applications rather than only a single enterprise system.

RFID @ DELL

What is RFID
RFID stands for Radio Frequency Identification Devices. RFID is a 3 part technology consisting of: A reader A receiver with decoder A Transponder

RFID applications

RFID at Dell - Manufacturing

Tracking code and Computer assembly instructions are added to the tray. This determines the specific line to which the tray should go to. At every stage of the assembly, the tags are read by the antenna for specific instructions.

RFID at Dell - Shipping

Once assembled and tested, production information is inserted into the tags and sent to a shipping station. At the shipping station, the RFID tag transfers data to the control PC. This control PC uses this information to print the appropriate label.

Benefits of RFID

Production stops have reduced dramatically. Labor can be allocated by minimizing repetitive activities. Returns due to wrong shipping of products have been minimized.

SCALEABLE DESIGN AT DELL

Reduction of TCO
Dell aims to reduce TCO for its customers by improving its IT systems:

To meet corporate objectives. Keep costs to a minimum. Reduce Complexity.

THE SCALEABLE MODEL

A shift from proprietary technologies to in house Dell capabilities. Pay as You Go model.

Benefits of the Scalable Model

Increase performance and availability by scaling incrementally Minimize management overhead. Improve utilization rates.

Preserve capital.
Reduce TCO

Delivering High Performance

2 Global Centers with 72 Dell PowerEdge 6650 servers. Dell uses Oracle 9i Database with Real Application Clusters (RAC) running on Red Hat Linux Advanced OS for servers.

Servers help carry out 5 million transactions a day

Delivering High Performance Storage

Dell uses Dell/EMC Fibre Channel SAN (Storage Area Network)

This helps: Store and retrieve critical information.

Helps it scale easily and thus enabling it to accommodate any increase in storage system.

Dells Factory Planner Solution

Manages 250 suppliers who handle 4000 components. Calculates schedules. Estimates surplus parts in the factory and in the supplier inventory.

Places orders, which are delivered within 90 minutes!

Reliability

A single database is run on a cluster of Dell servers running on Intel processors. This ensures that the minute a server is down, another server automatically comes up and takes over.

B2B @ DELL

Business To Business (B2B) Model

INTRODUCTION Business model for dealing with large business entities. Server- to- server communication over internet integrating both supplier & buyer system. Shopping online with customers ERP Procurement Application with simultaneous up gradation. No duplicate information entry. Easy process, less cycle time, less errors.

Dells Objectives With B2B Integration

To quickly integrate customers who are capable today. Built a solution to integrate any customer who supports open industry standard of XML,EDI To help customers built a B2B solution for rapid deployment & connectivity. Providing hardware, software & consultation to help build a system which not only connects to Dell but even to other suppliers.

B2B e-Commerce Solutions

1.

Connection to more than 20 different industry Eprocurement (ERP) tools & usage of standard formatting protocols. Example- Ariba, Peoplesoft, SAP, EER, Peregrine,etc. Basic division into 2 parts: Supplier hosted solutions Dell will host the catalog . Customers will access their own custom catalog to retrieve their personalized configurations. Catalog maintenance by sales representatives.

"PunchOut" - authenticated access to the customer's catalog at Dell from the customer's Internet browser to facilitate shopping 2. Order Requisition - shopping cart data pulled back into the customer's ERP system and workflow processing 3. Electronic Purchase Order - sent back to Dell for automated order processing 4. PO Acknowledgement - response returned to customer
1.

2. Buyer Hosted Solutions:

Most complex and require resources, time and effort to implement.

Catalog information exported to a spreadsheet or file and either sent to the customer directly for inclusion in their own system or moved to the EProcurement vendor's network to be utilized and accessed there.
Information can become outdated so regular updates required. Customer bears a large burden of catalog maintenance.

Supplier vs. Buyer

Supplier Pros: Real-time Data Updates Data Accuracy No Double Entry Integrated Electronic Transaction Allows supplier to manage complexity of valid configurations Cons: Requires XML Communication Capability . Customer gets a different look and feel from every 'Punchout' supplier Buyer Pros: Works well for commodities with limited configurations Catalog Preview Management Consistent look and feel among different suppliers Cons: Data Accuracy Catalog Management Manual Data Update and Order Receipt (sent in email)

Engaging With Dell

1.

In order to maximize customer opportunities through B2B integrations, Dell has identified the primary criteria for quick, successful integrations. These are divided into two parts: Purchasing Focus: Developed or are developing an ecommerce strategy. Larger numbers of orders . More standardized configurations. Centralized procurement.

Engaging with Dell Contd.

2.

Technology focus: Dell's solutions are best designed for customers with some of these capabilities: Punch out capabilities in their ERP or access to an authenticated intranet. Dedicated development teams. ERP systems that can use or translate XML.

Dell- Customized for the Customer

Dell Premier
Corporate customers account for almost 85% of revenue. Large corporate customers access Dell website called dell premier which is a customized version of dell.com. Access to product and service information tailored to a particular company. Can order PCs directly from a menu of configurations pre-approved by the company without going through normal purchasing channels or paperwork.

Dell Premier contd.

Orders put on Premier are automatically routed to higher managers for approval which eliminated paperwork and delays. Access to Dells own on-line internal technical support tools which is actually used by Dells Support personnel when a customer calls for help.

Premier sites can integrate with - Microsoft (Biztalk) Oracle, Peoplesoft , SAP ,etc .

Dell Premier contd.

The Dell Premier sites includes more than 500,000 pages of information and facilitates greater knowledge transfer. Gives detailed info on all the configurations(h/w and s/w) present in the customers pc which helps in quick decision making for customer if going for upgrades. The same configurations info helps Dell to make repeat business with customers by offering products specifically to them.

Dell e-learning

Need for training for continuous product development, while keeping a worldwide sales and service organization up to speed. Issues of quality, costs and no re-use Eedo's ForceTen chosen as the content development and delivery platform for e-learning programs Enabled Dell to own and control their content as well as the development process Higher quality training, cost reduction, re-use and translation facility. Result: Dell increases sales productivity by 20%, while reducing training development costs by 55%

Authentication Solutions @ DELL

Dell authentication
Challenge at hand: Integrate authentication and identity management for Microsoft Windows, UNIX, and Linux platforms Incorporate this into Microsoft Active Directory across the entire Dell infrastructure Solution: Vintela Authentication Services from Quest Software deployed with the help of Quest Professional Services

Dell authentication contd.

Consolidating authentication and identity management systems: Multi-Platform Management Integration (MPMI). Microsoft Active Directory service Planning for the future: Migrate the local user accounts from each nonWindows system into Active Directory. Building a relationship: Able to use this product for all costumer related solutions with a guarantee of successful execution

CRM @ DELL

CRM in Dell

Dell maintains special DB of its top 50 global customer. Maintains a Global Data Repository for all of its customer. Uses DB compiled by Dun & Bradstreet for 500 global companies for selectively targeting sales efforts .

Real Time CRM When a customer calls in for placing order then customer service links directly to Dells Real Time inventory . Depending on latest inventory data Dell can : Push Available inventory at lower cost. Promote latest/new products at higher cost. Provide add-on products with discounts .

Why Boeing will only do business with Dell -CRM

Boeing as part of Federal Govt rule cannot use internet for doing business. Dell has adapted customized its offering to Boeings IT system . Dell uses EDI for processing orders from Boeing directly into its order management system.

30 Dell people take care of Boeings 140,000 Dell PCs forecasting future PC purchases, managing current inventory and securing needed service and support.

Demand Forecasting at Dell

Dell losing confidence in Direct internet based sales model ??

Starting 2005 Dell set up Kiosk locations at Shopping malls across US (Wal Mart Stores and other shopping malls), Canada ,China ,Japan and Australia where people can experience dell products . Customers place order for dell products to be delivered later.

Reasons for going for Hybrid Sales Model Biggest competitor HP gaining market share faster particularly in notebooks chiefly because of retail outlets. Low internet penetration in India and China two of biggest and fastest growing markets.

Summary of MIS and its Effect in Dell

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