Dell Supply Chain Managment

2938 Words Mar 29th, 2012 12 Pages
Supply Chain Management
Term Paper
On
INVENTORY DECISIONS IN DELL’S SUPPLY CHAIN MANAGEMENT

Submitted to
Dr. P.R.S SHARMA

Gitam School of International Business

Submitted by
UKR PRASANTH BABU.K
1226111138 (IB)
SECTION-A

INVENTORY DECISIONS IN DELL’S SUPPLY CHAIN MANAGEMENT

EXECUTIVE SUMMARY
Dell is the largest computer-systems company based on estimates of global market share. It is also the fastest growing of the major computer-systems companies competing in the business, education government and consumer markets. Dell’s product line includes desktop computers, note book computers, network servers, work stations and storage products. Michael Dell founded the company based on the concept of bypassing retailers and
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There are, however, some exceptions. For example, Dell may manipulate the schedule when there is a need to replace defective units or when facing large customers with specific service-level agreements (who have nonstandard quoted manufacturing lead times) for their orders. In most cases, Dell has significantly less time to respond to customers than it takes to transport components from its suppliers to its assembly plants. Many of the suppliers are located in Southeast Asia and their transportation times to Austin range from seven days for air shipments to upwards of 30 days by water and ground. To compensate for long lead times and buffer against demand variability, Dell requires its suppliers to keep inventory on hand in the Austin revolvers (for “revolving” inventory).Revolvers or supplier logistics centers (SLCs) are small warehouses located within a few miles of Dell’s assembly plants. Each of the revolvers is shared by several suppliers who pay rents for using their revolver. Dell does not own the inventory in its revolvers this inventory is owned by suppliers and charged to Dell indirectly through component pricing. The cost of maintaining inventory in the supply chain is, however, eventually included in the final prices of the computers. Therefore, any reduction in inventory benefit Dell’s customers directly by reducing product prices. Low inventories

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