Dell: Supply Chain Case Study

14/05/2012

Dell, the American multinational computer technology corporation, is based in Texas and employs over 103,300 people worldwide. Dell, the third largest PC maker in the world after HP and Lenovo, develops, sells and supports computers and related products and services.

In 2010, Dell was shipping only 5% of its notebook computers by sea freight. By the fourth quarter of 2011, it was shipping half of these volumes by sea freight which reduced their transportation costs by nearly a third.

Over the last four years, Dell, the US computer giants, have completely overhauled and redesigned its supply chain, with the results showing obvious improvements. Over the period, Dell’s forecast accuracy has tripled, their manufacturing costs are down and they pay considerably less for freight transport services.

Dell was able to achieve these results by moving from a regional to a global structure. This meant variabilising its cost structure resulting in working with partner networks almost exclusively in China. This enabled the optimisation of its global IT infrastructure and also enabled the segmentation of its supply chain in order to provide more individual solutions for customers.

Dell’s Executive Director, Global Supply Chain Operations, Padraig Healy, said,

“We accepted that Dell had to transform. The world was changing around us, and how our competitors were supplying notebooks gave them a competitive advantage. Customers wanted to buy in a different way.”

The hi-tech community as a whole has been successful in driving down costs by completely overhauling its supply chain. Hi-tech companies dominated the ranks of the all-industry Gartner Supply Chain Top 25 for 2011, with 9 of the top 25 and 5 of the top 10 made up of hi-tech companies.

The Gartner report said,

“As demand began to rebound in 2010, hi-tech companies continued to shine financially, exceeding last year’s average performance.

“They accomplished this, in part, through the introduction of innovative new products and aftermarket solutions, improved demand management capabilities, and increased resiliency to more profitably withstand supply chain disruptions.”

OSE provide a full range of transport and logistics services meaning we are perfectly equipped to ensure the smooth running of our customers’ supply chain. To find out more about our services, including UK and European Express, Economy European Freight, International Air and Sea Freight and UK and European Warehousing, visit our services page here.