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Demand/Supply Management. Lonnie Childs Director America’s Supply Chain Management Dell Computer Corporation. Presentation Outline. Who is Dell? Operating Principles Demand/Supply Management What’s next?. Who are we?. #1 computer systems company in the world

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lonnie childs director america s supply chain management dell computer corporation

Demand/Supply Management

Lonnie Childs

Director

America’s Supply Chain Management

Dell Computer Corporation

presentation outline
Presentation Outline
  • Who is Dell?
  • Operating Principles
  • Demand/Supply Management
  • What’s next?
who are we
Who are we?
  • #1 computer systems company in the world
  • #1 in Server & Portables sales in US
  • #48 on Fortune 500 list
  • #10 on Fortune “Most Admired Company” list
  • 36,000 employees world-wide
  • Customers in 170 countries
  • 6 Manufacturing locations world-wide
virtual integration
Virtual Integration

Principles

  • Be direct
  • Focus on core competencies
  • Collaborate to spur velocity
  • Leverage the Internet to cross boundaries

Benefits

  • Enhanced velocity throughout the value chain
  • Advantaged relationships
  • Joint, cooperative business processes replace Silos
  • Cost reduction for all parties
lovejoy s law
Lovejoy’s Law

Information, Inventory, and Capacity/Capability are substitutes for each other in any system.

Information

Capacity Capability

Inventory

Source: Lovejoy, William S., Integrated Operations. Univ. of Mich.; Sept., 1995

value shift in supplier relations
Value Shift in Supplier Relations

Corporations

Communities

Physical Assets

Intellectual Assets

Closed

Collaboration

Vertical Integration

Virtual Integration

slide8

The Model & Supply Chain Management

  • Be Direct
    • Enables immediate Market feedback
    • Allows us to quickly influence demand trends
    • Fastest TTM w/ standard technology
  • Build to Order
    • Postpone material commitment as long as you can
    • Focus on material productivity
    • No Finished Goods
  • Low Inventory, Low Backlog
    • Exposes problems quickly
    • Drives quick response.
  • The Model drives the right behavior and accountability.
  • The Model is religion - Follow it.
the dell fulfillment proposition
The Dell Fulfillment Proposition
  • Buy to plan … build to order
  • Long material lead time – 4 months
  • Build and ship within 3 days avg.
  • Eliminate inventory - < 4 DSI Production Inv.
  • Continuously pursue flexibility
  • Develop strategic partnerships
  • Own the Customer Experience
sales and operations planning

Bottoms-Up

Forecast

By Segment

Constrained

Ship Plan

Plan for

Flexibility

Tops

Down

Sales and Operations Planning

Revenue

Plan

Master Sales

Plan

Risk

Mgmnt.

Hedges &

Adjustments

World-wide

Roll-up

Book/Ship

Plan

Master Production

Plan

Supplier

Capacity

Plan

Factory Capacity

Plan

Material Reqmt

Plan

Supplier

Matl Reqmt

Plan

Keys to Success:

>Regimented Planning Cycles>Regular SOP Reviews

> Risk Management > Consistent Execution

the law of demand supply
The Law of Demand/Supply

“Demand/Supply will always tend to diverge.”

DEMAND

SUPPLY

The question is….

How far in advance can we recognize it.

How fast can we resolve it.

at the center of supply chain execution

Supply

Demand

Demand/

Supply

Procurement

Sales/Mktg.

At the Center of Supply Chain Execution….

“Relentless Demand/Supply Resolution”

  • We win with…
  • Alignment
  • Communication
  • Commitment
  • Teamwork
demand management
Demand Management
  • Lead-time elasticity
  • Specific lead times established for all configurations daily
  • Supply constraints are continuously communicated to sales
  • Managed at point of sale
  • Demand shaping
demand supply management

75%

Forecast

15%

10%

Demand Management

Demand:Supply Management

Supply Chain Flexibility

the improvement curve
The Improvement Curve

What raises the bar?

  • Innovation
  • Information Velocity

Supply

Chain

Velocity

What got us here?

  • Best Model
  • Flexible Factories & Suppliers
  • Relentless Demand/Supply resolution
  • Great People & Execution!

Time

slide16

What’s Next?

  • Completion of Global roll-out of i2 Technologies applications & “institutionalization” of the changes
  • Electronic integration with Supplier planning systems
  • Supplier to Hub information & execution
  • Setting standards for E-Business (I.e Rosetta.net, etc.)
  • Trading Exchanges?
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