Assingment on Supply Chain Managment

Submitted To : Rabia Ijaz Submitted By : Zohaib Hammad Registration No : 2141101

National college of business administration and economics

Executive summary
Two years ago, labors strike in Los Angeles and blocked hundreds of cargo ships from uploading the raw materials. Dell follow just-in-time manufacturing model so Dell supply chain was affected. Dell has no choice because all things were happing fast and Dell move fast to fix them. So Dell communicates with its supplier and ships all it spare parts by 747s plan. It increased Dell supply costs. Dells parts were last to be loaded onto each cargo ship so they did be unloaded first. Every company has warehouses so that they will manage inventory and meet demand. But according to Dell inventory is just like fish. The longer you keep it the faster it deteriorates. Today Dell has no warehouses and assembles near 80000 computers every day. And meet with demand with just right amount of supply. Every computer makers pay their suppliers 30 day before a PC is shipped to market. But Dell pays it suppliers 36 day after it receives payment to their customers. So Dell has achieved cash conversion cycle. Dell turns its inventory 107 times per year while HP turns 8.5 and IBM 17.5 per year. So Dell has competitive edge to its competitors. But there is also a dark side and that is Dell is so fast in parts and load all burden to its supplier. If there is any disruption in supply chain the supplier is suffer with its inventory not Dell. Dell always want to do better to best thats why they never satisfied in any time. Dell every year wants to increase its production 30%. For instances; a group of packing lines, packs 300 PC an hour if they pack 350 pack Micheal Dell congratulate them and then issue challenge: pack 400 PC an hour. He pleased but never satisfied. Dell takes the database of its customers and makes their supply chain too accordingly. This is very helpful to meet the demand and arrange supply chain respectively. Dell follow thin white line model. Dell does not take the ownership of inventory until its pulls the part and it does not pull the parts until take the orders from the customers. Dell hold inventory only for the six to seven days. Six to eight hours is required for assembly line and eighteen hours is required for the complication of UCPs. Dell holds tightly to its supplier, so Dell is playing the Bully role to their supplier. Dell tried to pressuring its supplier to do better to best. It rates to their supplier about their ability to compete with cost, technology innovation and over all supply chain. Just because of perfect supply chain, Dell is in better position to forecast the demand. Dell wants continuous improvement and change. Best supplier and standardized PC components. Dell is going fast to making thing simple.