Business Strategy

4546 Words19 Pages
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
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