Supply Chain Management
Chapter 5
Network Design in the Supply
Chain
5-1
Outline
A strategic framework for facility location
Multi-echelon networks
Gravity methods for location
Plant location models
5-2
1. Network Design Decisions
Facility role: What role should each facility play? What processes should be performed at each facility?
Facility location: Where should facilities be located?
Capacity allocation: How much capacity should be allocated to each facility? Market and supply allocation: What markets should each facility serve? Which supply sources should feed each facility?
(How many plants, DC’s, retail stores, etc. to build?)
5-3
Dell, Inc.
Designs, develops, manufactures,
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diseconomies
- worker motivation
- distance to markets & suppliers
Experience
- the learning curve
Low-cost access to factors of production
Technological advantages
Dell Relies on Standardization
Cost
Proprietary Technology
Standardizing
Professional Services
Open Standards
Wireless LAN
Managed Services
Workstations
Desktops
8-way Servers
2/4-way Servers
Notebooks
Volume
Dell Architects
Monitor and Evaluate
Dell Collaborative R&D
Drives Adoption
Dell’s Operational Efficiency
Drives Down Costs
Low Cost Leadership
Operating Expenses Over Time [% sales]
Inventory Advantage Over Time
70
28%
26%
60
24%
50
22%
20%
40
18%
16%
30
14%
20
12%
10
10%
8%
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Collaborative Enterprise
Technology
Services
Customer
SOLUTION
Software
E-Business
Seamless integration of best-in-class partners with Dell
19
Build-to-Order
valuechain.dell.com
www.PremierDell.com
Online
configuration and ordering
Orders based on real-time customer demand Constantly
Optimal pricing for declining latest technology component costs
Recognized as one of the leading computer manufacturers, Dell uses an astonishing supply chain through pull-to-order procurement and just-in-time inventory management. Their strategy is highly efficient and drives costs to a minimum while allowing for minimal lead times and production times of under 4 hours for each order as their suppliers maintain levels of inventory based on forecasts within Dell warehouses near Dell assembly
Arntzen, B. C., G. G. Brown, T. P. Harrison, L. L. Trafton. 1995. Global supply chain management at Digital Corporation. Interfaces 25(1) 69-93.
A Customized Textbook, Supply Chain Management SCHM2301, ISBN9781308037400 Copies are on reserve in the library
The corporation is seeking data to determine the optimal course of action for distribution, referred to hereafter as the supply chain. This analyst has researched several supply-chain strategies. These strategies will be presented in this report. The analyst will also provide a concerted
A supply chain is a net work of firms. Thus, each firm in the chain should build its own supply chains to support the competitive priorities of its services or products. Two distinct designs used to competitive advantage are efficient supply chains and responsive supply chains. Efficient supply chains work best in environments where demand is highly predictable. The focus of the supply chain is on efficient flows of services and materials keeping inventories to a minimum. The firm’s competitive priorities are low-cost operations, consistent quality, and on-time delivery. Responsive supply chains designed to react quickly in order to hedge against uncertainties in demand. Work best when firms offer a great variety of services or products and demand predictability is low. Typical competitive priorities are development speed, fast delivery times, customization, variety, volume flexibility, and top quality. Tables below show the environments and design features that best suit each design.
Table of Contents Abstract…………………………………………………………………………………………....2 Background and Problem Definition……………………………………………………...2 Current Situation………………………………………………………………………………..2-5 Demand………………………………………………………………………………....2-3 Supply Side Concerns…………………………………………………………………..3-4 Prices……………………………………………………………………………………4-5 Distribution Network………………………………………………………………………...…5-7 Phase 1: From Suppliers to Distribution Centers…………………………………….....5-6 Phase 2: From Distribution Centers to
Explain the network of distribution centers for the company and how well it reaches the customer keeping in mind the time constraints?
Supply chain networks are important because they help company’s remain consistent with the consumer buying pattern changes. Companies often seek new channels to market their product. The company utilizes analytics to identify different ways to present their product to the consumers and how the supply chain would need to operate for each case. They determine the optimal strategy to determine the overall strategy based upon the product being produced. For example, the supply chain for a tablet will differ from that of a candy bar. The delivery of the tablet is produced on a time sensitive basis because of the ever changing demands of the high tech consumer market. The supply chain network design allows for organizations
What is the right supply chain for your product ? is the question asked by Marshall L. Fisher in his article titled, “What is the Right Supply Chain for Your Product ?” published in March-April 1997 issue of the Harvard Business Review. Author raises the question stating the fact that new ideas and technology implemented haven’t lead to improved performance. Performance has not become better but rather in at least some cases, has worsened due to costs rocketing to unprecedented levels.
As director of Supply Chain Systems, Teri Takai recommends implementing virtual integration strategies from companies like Dell to portions of Ford’s supply chain strategy. Although there are several key differences between the companies, the restructuring plans of Ford 2000 have set a viable foundation to implement Dell’s virtual integration strategy in inventory management, customer service and support and suppliers’ management. The redesign of the process must include design not only of the supply chain but also of fulfillment, forecasting, purchasing, and a variety of other functions that historically been considered independently within the Ford hierarchy. Teri
Dell and Hewlett Packard (HP) are two of the most influential companies in the PC market. The CEO of HP requires an understanding of how dells strategy allows it to achieve a competitive advantage so that he/she can counteract it. This report has been carried out to provide the CEO with the necessary information to do this. Therefore the objective of the report is to provide the CEO with detailed information on Dell as a business and its strategy. In order to achieve this, first the main strategies of Dell and how they provide competitive advantage will be identified, then the business models and e-business initiatives used
I will recommend the BOD to approach the Dell model with a prudent attitude, neither too aggressive nor too timid. Emulating the virtual integration should focus on developing the strategic partnerships with technologically advanced suppliers and eliminating the correlation with smaller ones. Ford would make sure that key suppliers have access to forecasting data from customers' purchasing trends and production information to enable a faster order-to-delivery cycle. The difference in the distribution model between Dell and Ford lies in the middle link of using retail shops. Since Ford cannot skip retail as a focal distribution point, it should work on establishing a network of retail shops that it owned. Ford make sure shops are not affecting
It has been two decades since the internal operations are consistently streamlined, manufacturing support up, quality of the products are generally enhanced, the expenses of assembling are consistently decreased yet now the organizations are presently concentrating on the reducing of logistics by mean of putting right supply chain methodologies for the excellence of organizations (Mangaladurai & Nemati, 2013). According Mangaladurai and Nemati European companies are spending between 5% to the highest ratio of 15% of the total budget of the company. In the United States, companies have used more than $ 670 billion on the supply chain related activities during the year 1993 which was the 10.5% of the aggregate GDP.
Strategy literature offers many techniques and models suited for systematic strategic analysis. The SWOT analysis, the PESTEL analysis, the Five Forces analysis framework are the prime examples of techniques that can be adopted for strategic analysis. This assignment will use PESTEL and Five forces model to analysis the environment of CRH plc.
Since the beginning Dell has been selling customized computers. In 1988 Dell became a public company, turning the company more profitable by acquiring new investors. From 1990 to 1993, Dell used to sell computers in retail stores such as Wall Mart, Best Buy, Staples, etc. and because of low profit as results, in 1994, the company refocused its strategy to direct sales, eliminating retailers, wholesalers and consequently acquired satisfied customers by reducing cost and time for them and also the company. In 1997 the company became the low cost leader in pc vendors. During 2002-2007 the company had 7 elements as its strategy: making build-to-order manufacturing progressively more cost-efficient; partnering closely with suppliers to reduce cost of the supply chain; using direct sales techniques to gain customers; expanding into additional products and services and technical support; keeping R&D and engineering activities focused on better meeting the needs of customers, and using standardized technologies in all product offerings. As a conclusion, Dell has been always changing its strategy according to customer needs and in a way to make the company more profitable.