Dell supply chain group

GROUP 1:
NGUYỄN ĐĂNG CHÍ| VÕ SƠN LÂM
ĐOÀN NGỌC CHÂU|LÊ ĐỨC HUY
LECTURER:
Mr. NGUYỄN QUỐC BẢO
Information system management
DELL PC & LAPTOP‘S
SUPPLY CHAIN ANAGEMENT

DELL LAPTOP & PC’S SUPPLY CHAIN MANAGEMENT 2
Contents
1. Supply chain management definition .............................................................................................................. 3
2. Introduction about Dell..................................................................................................................................... 3
3. Quality management ......................................................................................................................................... 5
4. Logistic management......................................................................................................................................... 7
5. Demand management......................................................................................................................................11
6. Inventory management ...................................................................................................................................13
7. Cashflow optimization .....................................................................................................................................14
8. Customer Service.............................................................................................................................................16
9. Benefits and limitation ....................................................................................................................................20
10. References........................................................................................................................................................22

1. Supply chain management definition
Supply chain management (SCM) is the management of the flow of goods and services.[2] It includes the
movement and storage of raw materials, work-in-process inventory, and finished goods from point of
origin to point of consumption (Wikipedia).
2. Introduction about Dell
Dell Inc. is a multinational corporation of the United States in the development & commercialization of
computer technology and headquartered in Round Rock, Texas, United States. Dell was founded in 1984
by Michael Dell. This company is the 28th largest income in the United States.
Dell sells personal computers (PCs), servers, data storage devices, network switches, software,
computer peripherals, HDTVs, cameras, printers, MP3 players, and electronics built by other
manufacturers. The company is well known for its innovations in supply chain
management and electronic commerce, particularly its direct-sales model and its "build-to-order" or
"configure to order" approach to manufacturing—delivering individual PCs configured to customer
specifications. Dell’s Vision is "Whatever changes the future may bring, our vision”
Dell's mission is to be the most successful computer company in the world at delivering the best customer
experience in markets they serve. In doing so, Dell will meet customer expectations of:
highest quality, leading technology, competitive pricing, individual and company accountability, best-in-
class service and support, flexible customization capability, superior corporate citizenship, financial
stability
Supply chain model of Dell :

Components of Dell's supply chain: Each component in the supply chain have their roles. The
organization and good management components will bring tremendous value to the enterprise
Supplier: Dell's suppliers from producing computers and components corporations, such as Intel,
AMD processors; Seagate, Maxtor, Quantum .. hard drive; Samsung, Toshiba, Micron ... the RAM chips;

Sony, Philips, Nokia, Samsung, Acer ... for the screen; SCI, Solectron for printer components; Hon Hai
for the computer case and connectors; Microsoft for software and operating systems; And much of the
original equipment manufacturer (OEM) in Taiwan for other components. Dell has manufacturing
locations in multiple cities across Asia (Chennai, Penang, Shanghai, Xiamen, South China, Yantai,
Taiyuan, and most recently announced Chengdu). Dell also uses 12 distribution sites across the Asia
Pacific and Japan region.
Some retailer: Walmart, Best Buy, Costco,
Customer (End-user): The main group of Dell customers includes individual person, small
company, education and large company.
3. Quality management
Dell builds web pages for its top 20 suppliers who provide about 90 percent of the components Dell
purchases for its computers. Via these web pages, Dell's suppliers can provide real time information on
their build capacities, capabilities, inventory levels, and current costs. Similarly, via these web pages
(Dell created Web-based links for their suppliers, much the same way that they created for their
customers), Dell can provide their suppliers with current forecasts, inventory data, quality data, and
future demand schedules (including daily production requirements), technical requirements, and pricing
requirements.
In fact, every quarter Dell meets with its suppliers to provide direct feedback on performance and future
expectations. The performance is evaluated through a scorecard that compares each supplier with its
competitors based on cost, quality, reliability and continuity of supply. As a reward, Dell’s well-performing
suppliers are provided with training and support in order to improve their processes.
Dell also electronically passes along to its suppliers data about its defect rates, engineering changes, and
product enhancements. Since Dell and its suppliers are in constant communication, the margin for error is
reduced. Dell employees collaborate electronically with business partners in real time on product designs
and enhancements. Also, suppliers are required to share sensitive information with Dell, such as their own
quality problems. Suppliers follow Dell’s lead because they also reap the benefits of faster cycle times,
reduced inventory, and improved forecasts. Dell also works with their key suppliers, sharing their expertise
and best practices, striving to improve suppliers’ capabilities. Dell work to make it possible for their
suppliers to uphold the same high standards they set for themselves. The nature of the supply “chain” is: a
shared network of interconnected companies and industries - highlights for Dell, the importance of industry

collaboration to set strong supplier standards that create positive change. Sharing information to suppliers
is the leverage business partner of Dell. This help Dell control quality of product from beginning point are
minerals or sources to supplier accessories and endpoint is customers.
Dell’s new PC models are tested at the same time as the networks that they are reside on tested. This
collaboration reduces the testing period from 60 or 90 days to 15.
Dell has been deploying the e-Business software i2 Supply Chain Planner, i2 Collaboration Planner, and
i2 Factory Planner to meet it supply chain needs . The i2 system enables Dell to pull material into its
factories every two hours based on real time customer orders. This system tracks backlog numbers, stock
status, and supplier commitments. It lets the supplier know what parts to deliver to which factories and
be assembled to meet customer demand. Intelligent systems prepare the required parts and component list
for each computer, and check availability. If not in stock, components and parts are automatically and
electronically ordered directly from suppliers, who sometimes deliver in less than 60 minutes.
ValueChain.Dell.com which operates as an extranet between Dell and its suppliers. Through
ValueChain.Dell.com Dell’s suppliers can get informed about the level of inventory in the supply chain,
supply and demand data, component quality metrics and new part transition.
Having 7 cases about Supply Chain of Dell to manage quality of product:
 Conflict - Free Minerals: Dell gives policy to refrain from purchasing from any known conflict
sources and they expect that our suppliers adhere to the same standards. They have notified all our
suppliers of our policy on conflict minerals and have asked each supplier to provide us with a
confirmation of their conflict-free status.
 Supplier Responsibility: Dell is committed to responsible business practices and to high standards
of ethical behavior. They hold our suppliers to high standards of excellence defined in governing
laws, recognized international standards and conventions, and global best practices. Following three
standard:
o Compliance with Laws and International Standards.
o Dell’s Core Policy Commitments and Supplier Requirements.
o Supplier Engagement, Capability Building and Assessment Program.
 Supplier Diversity: “Dell develops strategic, sustainable relationships with a very diverse group of
qualified suppliers. Our customers come from every nation, culture and walk of life, and it’s

important that all aspects of our business reflect that same diversity”, Michael Dell — CEO and
Chairman.
 Conflict - Free Smelter: The CFS program provides an independent third-party evaluation of a
smelter’s procurement activities and concludes if the smelter demonstrated that the material they
processed originated from conflict-free sources. The assessment covers two reviews — business
process and material analysis — that take place at the smelter’s site. Once an assessment is
complete, the CFS Review Committee then determines whether the smelter is in compliance with
the CFS assessment protocol.
 Coalition Code of conduct: A coalition of technology companies updates the EICC (Electronic
Industry Code of Conduct) periodically to reflect input from a wide variety of stakeholder
organizations. The EICC contains provisions to address performance in areas such as: labor, health
and safety, environment, ethics and management system.
 Supplier Global Citizenship Commitment: Dell commits to implementation of their Supplier
Principles through a self-assessment tool and utilizes the industry standard tools that have been
developed by the EICC and the GeSI (Global eSustainability Initiative).
 Policies and Positions: Promulgating environmental and social policies govern the way they build
their product. Ensure workplace is inclusive and safe. The materials used in their products will be
held to high ethical and environmental standards.
4. Logistic management
Some transportation partners of Dell are DHL, FedEX, UPS and DB Schenker. There are famous
transportation companies in the world and they ensure transportation of Dell will be efficiency and
environmental stewardship.
Dell is an end-to-end IT solutions provider rather than a PC supplier. They have multiple supply chains
worldwide. And nearly half our sales are through channel partners, which place large orders further in
advance. As they explored the most efficient transportation modes and routes for each supply chain, they
also needed to minimize environmental impact as much as possible. They change transportation from the
Truck to the Rail and from the Air to the Sea.
Another of successful of logistic service is packaging innovation – 3Cs strategy: Cube - Reduce packaging
size; Content - Use recycled or sustainable materials; and Curb - Make packaging easily recyclable. 3Cs
strategy help Dell reduces a lot of cost for packaging, materials also increasing volume transportation.

Reverse Logistics: Their new efforts to decrease product returns resulted in making 94 percent of returned
assets available for resale through our Dell Outlet, up from 90 percent in FY11. These items can be quickly
returned to usefulness and resold as Certified Refurbished, Dell Outlet New or Scratch and Dent, and all
Dell Outlet machines carry a Same-As-New warranty. The remaining six percent of returned assets are
recycled responsibly.
Dell’s organization of logistics in EMEA (Europe, the Middle East and Africa) provides a good illustration
of the general logic for logistics. All of Dell’s inbound logistics for material needed in assembly of PCs are
handled by suppliers who must have supply hubs or production facilities located within 30-minutes' travel
time of the Limerick plants. Third parties operate some hubs for a number of suppliers. On the outbound
side, Dell has five distribution hubs in EMEA to take advantage of location close to major markets,
transportation networks and logistics expertise. These distribution hubs are as follows in EMEA:
Limerick for Ireland, Eastern Europe, Middle East and Africa (except South Africa);
Liverpool for UK;
Tillberg, Netherlands for middle Europe;
Gottenberg, Sweden for Nordic countries;
Johannesburg for South Africa
A different logistics partner operates each hub. Similar outbound staging areas and arrangements with
logistics partners exist in the Americas and Asia-Pacific.
Call Centers
Dell makes extensive use of call centers, both for sales and for technical support. Dell generally organizes
its call centers around its major customer segments with different call centers for relationship and
transaction customers. It tends to locate call centers regionally to optimize telecommunications and
language considerations, but customers may at different times be routed to call centers in different
locations. Regional call centers are located as shown below. The EMEA call centers illustrate the
complexity within any one region.
U.S.: Round Rock and Nashville. A new call center is planned in Fort Worth, Texas.
EMEA: Limerick, Ireland; Bracknell and Bray, U.K. Relationship customers are handled through
Bracknell, whereas HSB customers are handled through regional centers in Montpelier, France for France,
Spain, Italy and the southern countries; Amsterdam for the middle and central countries; Copenhagen for
the Nordic countries; and Bray, Ireland for the UK, Ireland and other English speaking countries. The

Limerick call center specializes in 13 higher-level technical issues, and also operates as a backup call center
when telecommunication problems occur or call volume is exceptionally high.
Asia-Pacific: Bangalore, India.
Dell logistics demonstration
The factory gets orders two times per 24 hours. Dell’s sub-suppliers receive the information about the
order at the same time Dell’s factory gets it so they know exactly what Dell is going to request. This
information collected in documents called “the traveller” it tells exactly what parts the computer should
exist of. The part where Dell puts the computer together takes only 5 minutes. The total time for a
product in the factory is 3 days and the reason for this is that they test all computers before they distribute
them to their customers. The total lead-time, from customer order to customer receives the computer, is 6
days. Dell placed their European factory in Limerick (Ireland) for the reason that there were a lot of
educated persons that were unemployed Before they transported the merchandise from Ireland-England-
FranceHolland-Germany-Denmark and finally to Gothenburg, Sweden. This trip took about 60 hours and
required 6 marshalling which brought low security and high damage risk. Today the transport route
begins in Ireland further to England and from there directly to Gothenburg by ferry. The trip still takes 60
hours but this transport method brings less marshalling and only one driver is necessary. With this

solution Dell saves 4 dollars per packaging and one computer consists of 3 parts, the saving is 12 dollars
per computer. All consolidation for each country is done in Limerick in Ireland.
For example, Dell’s logistic provider is Irish Express Cargo (IEC) and they have a strong strategic
alliance with Dell for the whole of Europe. In Sweden it is Danzas that is responsible for the deliveries
since they have a partnership with IEC. Therefore, when Dell has a shipment, their contract is with IEC
who in its turn takes in DFDS for the transport from Ireland to Gothenburg. IEC is a transport company
situated in Ireland, who has specialised in transporting of computer goods. Dell is a parcel customer to
Danzas and is relatively large, however, in turnover, Dell is not the largest. Furthermore parcels are the
most inexpensive product to transport in comparison to large shipment, part goods; on pallets and it is the
smallest of services Danzas offers. The only time when Dell has full truckloads is into the terminal in
Gothenburg from Ireland.
The truck is loaded several times with different components from the sub-supplier and the reason for this
is to fill up the truck as much as possible. When then the truck leaves Dells factory in Limerick they send
via their system Atlas to IEC all information about the load and IEC then forwards the confirmation to
Danzas, which includes how many goods are on the way. The Atlas file is received at Danzas 36 hours
before the goods arrive. Danzas has a deadline for booking space on the fixed line haul at 12.00am. The
booking can be executed with help of the file, which contains volume and weight measures of the goods
and Danzas can from that information do an approximate booking on the line haul. If the booked capacity
isn’t enough they will bring additional capacity, although it is hard to obtain, since there is a boom on the
transport market and Danzas is forced to decline some customers. In the Nordic countries Danzas
distributes Dell computers to 32 different areas.
Since 2000, if you order a customized PC on any working day in the United States, the computer will be
on the delivery truck the next day. A complex custom-made PC will be delivered in no more than 5 days.
The functions of Dell’s Logistics Services:
 Warehousing service: Stocking solution for rapid deployment to a staggered delivery schedule.
 Drop in Box: Add additional custom installation documents and/or other accessories into the
shipping box.
 Remove Item: Removal of Dell default/standard items from the shipping box.
 Multi – Pack: Provide customer systems and specified documentation in approved multipack
containers.

 Over – Pack: over-pack multiple system and/or accessory items into a larger carton to reduce the
number of separate boxes being received.
 Pallets & Crates: Predefined non-standard or customer specific pallet or crate design, configuration
or palletization.
 Custom Packing: Packaging designed to customer specifications.
 Ship Box Label: Applying predefined/standard and/or custom labels which may include customer
defined and/or provided data to the system ship box.
 Order Consolidation: Manage the receipt and consolidation of multiple Dell and third party
hardware, software and peripherals or customer-consigned parts and arrange delivery of all parts in
single shipment.
 Time & Date Specific Delivery: Delivers product on a specific time or day. This service may
include: Time Specific, After-hours Specific, Date Specific, Weekday Specific, Weekend or Holiday
delivery.
 Inside Delivery: product delivery within customer location and/or additional delivery services that
are not standard method by the carrier. Can include the following: Depalletization, Inside Single
Destination, Inner Office Distribution
 Customer Carrier: Manage the transportation process using Dell and non-Dell standard logistics
carriers in the transportation of products.
 International Shipping: Prepare international shipment with all the required documents. Direct ship
to end users in direct or indirect countries with accurate Tax and Export compliance documents.
 Reporting & Notification: Prepare standard & custom shipping paperwork, packing lists or labels,
logistics and transportation reporting and advance notification of deliveries and reports.
5. Demand management
Direct sale model includes in CTO and BTO.
CTO (Configure to order): you can choose different hardware to suit your needs such as adding more
RAM, processor speed, selecting a DVD versus a CD-ROM, or adding more extra disk space, etc...
BTO (Build to order): Dell pre-builds what they it believes will be the most popular configurations.
In the Fall of 1999, Dell introduced the Dell Direct for SAP Program, where it partnered with SAP AG to
allow customers to install SAP inter-enterprise business solutions on Dell PowerEdge servers. The
program uses Dell's mass customization technology to factory-install SAP R/3 solutions on Dell
PowerEdge servers and PowerVault storage according to customers' exact specifications with systems
ready to plug and play after arriving at customers' sites. Under the Dell Direct for SAP Program,

customers access Dell's Website directly to specify and order hardware and software configurations for
SAP solutions on Dell PowerEdge 4300 or 6300 servers. A sizing and selection tools feature is available
online for customizing the configuration to a customer's exact needs and budget.
New i2 technology was used to coordinate the build-to-order processes from order placement to customer
support. By using the software Dell is able to profile customers, target them using their medium of
preference, and also measure the results. Dell integrated the supply and demand side of the business by
using unique software that would eliminate inventory overages.
To segment the market (individual person, smaller company, education and large company) makes it
easier for Dell to use Management By Objectives (MBO) and that gives reduced costs. For example when
you want to sell a product you send out an offer to many different customers, instead of sending out 100
offers to random customers and in the end only do business with three of them, you can send out three
offers and do business with all three. This is possible if you use MBO.
Selling direct without a reseller or channel is not a new practice; mainframes and minicomputers were
originally sold directly by companies but only to very big customers. This is because selling direct is
expensive and requires complicated processes and a rather complex organizational structure. But for Dell,
today, it is able to sell directly and has continued to sell direct to many of the Fortune 500 companies
because it has created a sophisticated supply chain infrastructure that thrives on real time information so
that the business can quickly react to changes and customer’s need.
Demand forecasting is the area of predictive analytics dedicated to understanding consumer demand for
goods or services. That understanding is harnessed and used to forecast consumer demand. Knowledge of
how demand will fluctuate enables the supplier to keep the right amount of stock on hand. If demand is
underestimated, sales can be lost due to the lack of supply of goods. If demand is overestimated, the
supplier is left with a surplus that can also be a financial drain. Understanding demand makes a company
more competitive in the marketplace. Understanding demand and the ability to accurately predict it is
imperative for efficient manufacturers, suppliers, and retailers. To be able to meet consumers’ needs,
appropriate forecasting models are vital. Although no forecasting model is flawless, unnecessary costs
stemming from too much or too little supply can often be avoided using data mining methods. Using
these techniques, a business is better prepared to meet the actual demands of its customers. Approaching
for building forecast models are Neural Networks and Data Mining, which are capable of modeling even
very complex relationships in data. Demand forecasting is a very complex issue for which these methods
are well suited. Multilayer Perceptrons and Radial Basis Function neural networks, Multivariate Adaptive
Regression Splines, Machine Learning, and Tree algorithms can all generate predictive models for this
application. Generally, demand patterns consist of some basic classes of components, seasonality, and
trend.

Based on the advantage of technology, Dell is able to underprice their competitors by 10%-15%.
Additionally, Dell’s production is based on forecasting. The forecast can go wrong with maximum 10 %
and is done 12 months in advance.
6. Inventory management
Famous inventory management solution of Dell are real time and just in time (JIT).
Dell builds most computers only after they are ordered. This is done by using just-in-time
manufacturing, which also enables quick deliveries, low inventories, little or no obsolescence, and lower
marketing and administrative costs
Thus, in the case of Dell, a computer is built only after a 12 customer has placed an order; then lean
manufacturing and just-in-time production take place. This means that once an order is placed,
configuration details are sent to the manufacturing floor and the assembly begins; once the computer is
built and the requested software is downloaded, it is shipped by a third party logistics to the customer.
The choice of a build-to-order and JIT manufacturing procedure has several advantages for Dell. First,
the level of inventories is very small, leading to low inventory costs and faster response to demand
changes – for instance, when a new microprocessor comes out in the market, Dell can immediately order
it from its suppliers, as there is no excess inventory to get rid of first. Also, it is common that customers
pay for an order before Dell pays its suppliers for the product’s components, thus letting Dell operate on
a negative cash conversion cycle.
Under the effort of minimizing its inventories, Dell demands from its suppliers to provide them with
goods in a “high speed” – so instead of orders such as “deliver 5000 to this warehouse every two weeks”,
the form of orders is more like “tomorrow morning we need 6.795 to be delivered at door A3 (of the
warehouse) by 7 am” . A new notion that Dell has introduced is the one of inventory velocity, and it
focuses on minimizing inventory and maximizing speed. It is worth mentioning that Dell holds an
average of less than 6 days of inventory, while the corresponding average of its competitors is 6 weeks.
In order to deal with these high rhythms, the main suppliers are required to maintain inventory near or in
Dell’s plants; they can either produce close or keep inventories in revolvers or supplier logistics centres
(small warehouses close to Dell’s assembly plants, that are shared by suppliers who pay the
corresponding rent. Of course, all the practices described above require close collaboration between Dell
and its suppliers – mutual trust and sophisticated data exchange are key factors to achieve it.

Dell builds and stocks quantities of Eligible Products based on customer’s purchase orders of Eligible
Products for predetermined periods of time. Customer may select initial time periods of 90, 120, 150 or
180 days, depending on regional availability, at a defined price for each level. If Customer’s purchase
order contains varied shipment quantities to multiple ship-to locations, Dell may break down the
purchase order into separate orders in its ordering system according to the ship to locations. The Eligible
Products will be warehoused at Dell’s (or Dell’s contractor’s) facility (“Merge Center”) until Customer
submits a notice of shipment, requesting shipment of the Eligible Products. After Dell receives and
accepts Customer’s shipment notification, and subject to availability, the Eligible Products ordered by
Customer will be shipped from Merge Center.
7. Cashflow optimization
Expand selling channel: In 1991, attempting to increase revenue growth, Dell decided to change strategy
and entered the retail channel by selling a select set of predetermined product configurations through
large retail stores such as CompUSA, Staples, and Sam's Club. With this strategy, Dell could no longer
maintain their price premium and experienced an increase in capital costs due to the 60- day finished
goods inventory for the channel. Dell quickly switched back to a built-to-order model and was able to
turn inventory twice as fast as retailers because it no longer has to hold channel inventory. Although the
mass customization strategy increased manufacturing costs by 5%, it allowed Dell to a gain back its 12%
price premium through add-ons and upgrades.
Using customer information to leverage mass customization: To make mass customization work, Dell
discovered that it had to listen to the voice of the customer. Dell customers visited Dell's portable
business unit in Round Rock, Texas to voice their needs as well as learn what was coming. It was through
these meetings that Dell learned that its corporate customers were more interested in reliability,
consistency, and the ability to customize equipment with screen size and memory. In 1997, Dell
responded to this needs with its new Latitude CP line44. This direct relationship with customers gives
Dell a competitive edge over its competitors who typically have to go through resellers.
Dell offers three different kinds of payment options. They are, credit card, advance payment and invoice.
When paying with credit card the amount is withdrawn prior to the delivery and for invoicing the
payment conditions are 10 days net. Dell confirms a customer order in writing. all over the world (cash
customers pay direct and invoice customers pay in 30 days). This result is that Dell only has to pay the
interest for 21 days at the same time that Dell has 30 days to pay their subsuppliers. This leads to that

Dell can have the sub-supplier’s money for 9 days and earn the interest before paying. If Dell just ran the
business without margins, it would still bring them interest revenue. This is why they have such high
profit percentage on their own capital.
Apply technology, Dell has optimized inventory to sell and loss if cann’t sell.
Dell focuses on having as few partners as possible and instead, focuses on having long lasting
relationships and them while supporting them to maintain their leadership in technology and quality. This
resulted in closer and even more cost-efficient relationships with the suppliers, further lowering costs and
delivering faster component shipments. Dell's approach to mass customization is to create an efficient
order fulfillment and supply chain process that provides rapid delivery, competitive prices, and available
computer options to the customers.
To ensure long-term, cross-functional collaboration, Dell integrated supply chain design into existing
product design processes and created a phase-gate review process to standardize future changes to the
supply chain. "Phased releases drive step-function improvements, rather than constant adjustments," said
Ms. Clayton. Finally, metrics across all functions were aligned to the goals of the supply chain portfolio

In addition, Dell has developed itself and sold many application and software to manage
operational activities, enterprise solutions, servers, storage, networking products,
telecommunications, media and entertainment, end-to-end IT solutions for retail, information-
based healthcare, security, mobile, training, data analytics. For example, Dell reduces enterprise
hardcopy printing costs by 50 percent with Lexmark solution,
8. Customer Service
The production is produced to customer order and they have support 24 hours a day.
First web-based system for customer service is Premier Pages of Dell at http://premier.dell.com which
are custom-designed Web pages containing purchase data. This system also has a paperless ordering
process, with the customer’s existing technology configurations already captured. The process of
knowing the customer begins when the customer orders a PC. The PC is built after the customer orders it.
This means that Dell has to have a direct relationship with the customer. The final system that Dell is
using to maximize CRM is the Dell South Africa’s implementation of an enhanced CRM system with the
help of IS Partners, an information systems company. Sales, marketing, financial and management
segments benefit significantly from this software. The Dell staff has easy access to the detailed

demographic information about customers, customer sales history and trade relationships. Sales
management can track activity within accounts, and lapsed quotes can be acted on. The marketing
department can track customer activity, product sales, and marketing mixes.
For example, Ford Motor and Shell Oil. These pages reside securely within the customer's firewalls and
they provide purchasing and technical information about the configurations. By using these pages,
customers like Ford and Shell can configure, price, and buy systems at the agreed-upon price. They can
track orders and inventory through detailed account purchasing reports by group, geographic location,
product, average unit price, and total dollar value. This also allows them to better manage their assets.
They can also access contact information for Dell account, service, and support team members. They can
check an order and find out if their system is sitting on the FedEx dock in Memphis, and how soon they
can expect delivery. In fact, customers like Shell Oil are transitioning from paper purchase orders to
electronic purchase orders. Another thing that Dell does well is setting up employee purchase programs
with many companies.
The second way: Catalog in the application of enterprise will be integrated with Dell’s ERP. This
system accepts enterprise can use systems to order from ERP system ( ERP Procurement

Application) of them( usually with only larger company). CRM of Dell will manage Catalog of
enterprise. Enterprise will be repay this catalog to adjust order.
For example: British Airway(BA) used Dell like strategy partner. Dell provided about 25000 laptop and
desktop for employees of BA. Beside, Dell provided 2 shopping online systems for BA. This thing was
Dell accept BA to watch for, purchase and check the orders through website which Dell customize
suitable with BA. In website, BA could choose and configure laptop or desktop difference to suit each
business department. The employee of BA would be accept their choice and order their computer suitable
with their use demand through internet system which was connected with Dell’s system.
Dell's Enterprise Resource Planning (ERP) B2B E-Commerce Solutions Helps Companies Save Time &
Money:
 Better Customer Relations
 Simplifies Purchasing Process

 No Duplicate Entries
 Fewer Errors
 Improves Accounts Receivable Turnover Ratio
Besides, Dell is also using several other information technologies, including e-mail, EDI, video
teleconferencing, electronic procurement, computerized faxes, an intranet, DSS, a Web-based call center,
and more. Dell also uses the Internet to create a community around its supply chain. Dell’s corporate
portal has links to bulletin boards where partners from around the world can exchange information about
their experiences with Dell’s products, logistics, and customer service. Old and new solution of Dell will
introduce below:
In 2005, Dell’s Information Technology group was faced with a supply chain management system that
had reached its limits on expensive, proprietary servers running the Unix operating system. The group
undertook the complete migration of the system to Oracle 10g Real Application Clusters running on low-
cost industry standards-based Dell Power Edge servers. By moving the application to Dell servers when
it did, Dell IT avoided significant new expenditures in proprietary Unix-based servers, achieved
increased server uptime, and provided an easy path for growing the systems as needed by adding
additional servers to the cluster. The increased performance of x86-based industry standard Dell
PowerEdge servers has enabled the deployment of such database software as Oracle 10g Real

Application Clusters. By sharing a large database across multiple PowerEdge servers, Oracle 10g RAC
provides for very cost-effective scaling, high reliability, and the ability to add capacity by adding
additional low cost Servers rather than buying larger, more expensive proprietary Unix-based servers.
With new solution, manage over 1 million Dell part numbers across approximately 200 product families,
and over 2 million Bills of Materials (BOMs) per year.1.8 million Purchase Order line per year, from
more than 5,000 suppliers worldwide. The cost component of the systems can runs in batch weekly,
monthly, quarterly, with each run rolling up total material costs, solve 3 million inventory movements
daily from stock rooms to the factory floor, transmit 3 million messages for report, analysis and factory
scheduling, handle approximately 15,000 items per day and vendor information and contact information.
SCM Oracle database application in Dell’s Americas consists of approximately 3,000 database objects
(functions, packages, procedures, trigger, tables, and views). The same SCM system is also supported by
6 Dell PowerEdge 2650 application servers, 5 internally integrations, approximately 125 batch jobs, and
about 500 user interfaces deployed to support the entire SCM application.
9. Benefits and limitation
9.1 Benefit of Dell’s supply chain
The company has been a staple in the top five of the AMR Supply Chain Top 25 every year since it
started in 2004.

With the advent of the Internet, by 1998, Dell became an Internet leader by topping $12 million a day and
offered its "Premier Pages" to its customers, as well as established web-based connections with its
suppliers. By 2000, Dell was number one in desktop sales, number one in notebook sales, and number in
desktop sales, and had risen to number two in Wintel server sales.
The company is the third largest PC vendor in the world based on unit shipments, behind only Lenovo
and HP. It is the market leader in the shipment of PC monitors worldwide, shipping over 5 million units
in the second quarter of 2014. Dell is also one of the largest technological corporations in the world based
on employees as it employed over 111,000 people worldwide in 2013. This means that the company’s
workforce has almost doubled in size since the number of employees stood at 55,200 in 2005. It is also
among the top 100 American retailers based on its U.S. retail sales, which reached 4.11 billion U.S.
dollars in 2013.
Creating a competitive advantage compared with traditional rivals based on:
 Disintermediation (cutting out the middleman): Deleting a player in the distribution chain is a
risky move, but can result in a substantial reduction in operating costs and dramatically improved
margins.
 Enhancing customer value: Forgoing the retail route allowed Dell to simultaneously improve
margins while offering consumers a better price on their PCs. This move also gave customers a chance to
configure PCs according to their specific computing needs.
 Process and operations innovation
 Let data do the driving: Harnessing the easily accessible sales and customer feedback data that
resulted from online sales allowed Dell to stay ahead of the demand curve in the rapidly evolving PC
market. Similarly, sales and feedback data were helpful in discovering new ways to enhance customer
value in each of Dell’s key customer segments.
9.2 Limitation of Dell’s supply chain
 Spend a lot of cost for technology in the beginning.
 Limiting the application of such technology: Required interoperability of electronic data should
Dell must be integrated with many ERP systems, some steps must still be done manually as data update;
bill.
 Another problem is that information and payment not is 100% protected on the Internet

 Everything is based on forecast from the last year so drastic changes can cause problems for Dell
and their sub-suppliers because they have customer order production
 Direct selling model is higher transportation costs
10. References
http://documents.tips/documents/mo-hinh-thuong-mai-cong-tac-cua-dell.html
http://123doc.org/document/1546950-mo-hinh-kinh-doanh-cua-dell.htm?page=7
http://www.dell.com/us/p/laptops
https://m.facebook.com/notes/ecom-vi%C3%AA%CC%A3t-nam/m%C3%B4-h%C3%ACnh-kinh-
doanh-c%E1%BB%A7a-dellcom-vua-b%C3%A1n-l%E1%BA%BB-m%C3%A1y-t%C3%ADnh-
tr%E1%BB%B1c-tuy%E1%BA%BFn/148486835186414/
http://www.forbes.com/sites/patrickmoorhead/2013/06/21/dells-pc-growth-strategy-in-it-to-win-
it/#f0b00f4cc102
http://www.dell.com/learn/us/en/uscorp1/corp-comm/cr-ca-list-suppliers?c=us&l=en&s=corp
http://www.slideshare.net/daominhthong/chui-cung-ng-ca-dell-dell-scm
https://en.wikipedia.org/wiki/Dell
https://en.wikipedia.org/wiki/Supply_chain
http://documents.mx/documents/dell-vision-and-mission-statement.html
http://scholarworks.rit.edu/cgi/viewcontent.cgi?article=8558&context=theses
http://www.greenlogistics.org/SiteResources/7a76ee40-f62d-4efe-9d4e-47ac2a2a9211_WM1%20-
%20Cardiff%20-%20Supply%20Chain%20Management.pdf
https://gupea.ub.gu.se/bitstream/2077/2437/1/Falk_2000_7.pdf
http://www.sourcetrix.com/docs/Whitepaper-SC_decision_making.pdf
https://documents.software.dell.com/statistics/textbook/demand-forecasting
https://www.marsdd.com/mars-library/case-study-dell-distribution-and-supply-chain-innovation/
http://www.johngattorna.com/documents/Dell_Case_study_for_supply_chain.pdf

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