About DELL

Dell was founded in 1984 by Michael Dell, the computer industry's longest-tenured chief executive officer, on a simple concept: that by selling computer systems directly to customers, Dell could best understand their needs and efficiently provide the most effective computing solutions to meet those needs. This direct business model eliminates retailers that add unnecessary time and cost, or who can diminish Dell's understanding of customer expectations. The direct model allows the company to build every system to order and offer customers powerful, richly-configured systems at competitive prices. Dell also introduces the latest relevant technology much more quickly than companies with slow-moving, indirect distribution channels, turning over inventory every three days on average.

This strategy afforded Dell some impressive results. First, Dell eliminated middlemen, the resellers, who were part of the traditional distribution model. As such, Dell not only passed the savings to the customers in the form of lower costs, but was also able to understand customer needs first hand and adapt to market changes faster than competitors.

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Second, Dell built computers directly for customers, not for inventory. This meant that the company did not waste resources building systems that may not reach a customer, need staffing positions to move inventory around the world, or spend time managing and tracking inventory, and reworking systems that become obsolete before purchased. Third, Dell Computer practiced just-in-time manufacturing, where trucks with vendor parts pulled up to one side of the plant, and unloaded directly into bins used for building customer orders. These parts did not become the property of Dell Computer until they were unloaded, which took place as frequently as every few hours. Fourth, information systems tied together the entire company, routing orders to the next step in the business process and eliminating waits, backlogs, and losses that a less automated system may experience. The five tenets of the direct model Dell adopts are: - Most Efficient Path to the Customer - Single Point of Accountability - Build-to-Order - Low-Cost Leader - Standards-Based Technology In its own business, Dell has enhanced and broadened the fundamental competitive advantages of the direct model by applying the efficiencies of the Internet. Dell led commercial migration to the Internet, launching www.dell.com in 1994 and adding ecommerce capability in 1996. The following year, Dell became the first company to record $1 million in daily online sales. Today, Dell operates one of the highest volume Internet commerce sites in the world based on Microsoft Corp.'s Windows operating systems. The company's Web site, which runs entirely on Dell Power Edge servers, receives more than one billion page requests per quarter at 86 country sites in 28 languages/dialects and 29 currencies.

The company realizes Internet-associated efficiencies throughout its business, including procurement, customer support and relationship management. At www.dell.com, customers may review, configure and price systems within Dell's
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entire product line; order systems online; and track orders from manufacturing through shipping. At valuechain.dell.com, Dell shares information with its suppliers on a range of topics, including product quality and inventory. Dell also uses the Internet to deliver industry-leading customer services. For instance, thousands of business and institutional customers worldwide use Dell's Premier Dell.com Web pages to do business with the company online. The name change to Dell Inc. in 2003, reflected the evolution of the company to a diverse supplier of technology products and services.

Dell's high return to shareholders has been the result of a focused effort over time to balance growth with profitability and liquidity. Dell has consistently led its largest competitors in each of those categories.

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The DELL Scenario

Dell has achieved dramatic success streamlining its product data management activities to product life cycle management. Its ability to keep the project focused on core business processes has yielded short time to value.

In 2000, Dell Computer faced these trade-offs as part of its constant efforts to improve its supply chain processes. In this case, it improved its product data management (PDM) capabilities, most notably its engineering change management (ECM) processes, internally and across the supply chain. In addition to streamlining the engineering workflow, this IT effort was key to building a foundation that can enable more-efficient product life cycle management (PLM). The goal of PLM is to manage the stages of a product's life to improve business performance. PLM depends on PDM for timely and accurate information about the status of a product definition.

Problem: Dell determined that it needed to reduce costs associated with managing product data and improve its engineering change workflow internally and across the supply chain as part of its ongoing efforts to improve business performance. The established infrastructure and processes were supported by internally developed applications to define products and manage bills of material (BOMs), manage related documentation and support ECM. As the enterprise continued to grow, it was becoming harder to monitor and control product development and production startup. Dell sought to address these issues before they became widespread.

Objective: As a cornerstone of Dell's strategy, engineering management recognized the importance of adopting standard software and processes for the workflow from design through manufacturing implementation. The scope of the effort required the inclusion of suppliers and manufacturing sites; otherwise, Dell would face increasing challenges with the timeliness and accuracy of product data. These problems could, in turn, create product quality problems, as well as unacceptable levels of scrap, rework and material shortages, resulting in inefficiencies in a highly competitive
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market. By improving these processes, Dell hoped to discover opportunities to further reduce material costs. For a company that ships more than 4 million PCs per quarter, small material savings per PC can improve the bottom line significantly.

Key objectives included: Enabling consistent engineering change workflow globally across Dell and suppliers Improving data integrity, as well as the timeliness and accuracy of product data Reducing engineering change cycle times Increasing the automatic reuse of product data across multiple applications, while eliminating the need for data reentry. Reducing the workload required for product configuration management Detecting product data errors before they reach manufacturing Integrating with established applications, such as Dell's sales configuration tool for servers and storage devices in the United States Reducing system downtime Improving user acceptance and use of enterprise-standard software

Dell was concerned about the time and cost for such an effort. Based on its own knowledge and anecdotal evidence, the company was aware that such large-scale initiatives typically require more than a year to accomplish. On occasion, they may take many years, at great expense, and with the risk of unsatisfactory results. In the fast-paced PC industry, failure could have hurt the companys ability to compete.

Approach: Dell decided to replace its internally developed infrastructure for PDM with commercial, Web-based software that would support product definition, configuration management, and ECM across the enterprise and the supply chain. During 2000, the stewards of product data, Dells Product Group Configuration Management (PGCM) team, drove this effort in conjunction with the engineering services project team. Meetings with senior executives reaffirmed the need for the
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project, reinforced corporate commitment, and confirmed the goals, scope and expected results from this initiative. Enterprise wide awareness of this support from senior executives encouraged cooperation from all affected groups. Central to this strategy was Dell's decision to focus on the IT capabilities that would be useful to improving its infrastructure. It focused on secure document and file management, BOM creation, product configuration management, ECM, and the Web based ability to coordinate these activities across Dell's global operations and with suppliers.

Although Dell recognized that supporting multiple types of workflow could be valuable, it decided to streamline workflow options during the initial deployment of software. After exploring options with major systems integrators (SIs) and suppliers of PDM applications, Dell decided to partner with Agile Software and to support the effort with an internal team dedicated to the deployment. Dell adopted this approach because: Agile addressed the major focus points of this initiative During the evaluation process, Agile instilled the greatest confidence that Dell could work with it to deploy in the Dell environment Given their knowledge of engineering processes and software, an internal deployment team from Dell would deliver a more-economical and timely solution than those proposed by SIs.

At the core, the E-hub and the Internet file server provide the backbone for archiving and sharing electronic files securely across the Internet. The product data validator and the Agile integration server provide the interface between Agile and Dells enterprise resource planning (ERP) environments worldwide, as well as to its sales configuration for complex servers and storage devices in the United States. By integrating Agile with its sales configuration validation tool, Dell enabled its U.S.based sales department to automatically validate server and storage device configurations based on engineering technical attribute data housed in the Agile tool.

Dell executed the bulk of the deployment in two phases. The first enabled Agile as the system of record for 2,500 internal users and 37 of Dell's top 50 suppliers. More

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than 250,000 part numbers and 20,000 documents were converted from the legacy database into Agile's software environment. This phase lasted seven months (from March 2000 through October 2000) and cost between 200 percent and 250 percent of the software's purchase price. Nonsoftware costs comprised Agile's consulting services, the time of internal team members, travel and ancillary software support for the Web-based environment, including extranet support.

On 1 October 2000, Dell went live on Agile as the product change system of record to manage all product platforms. During the second phase of the deployment (from October 2000 to June 2001), Dell added 800 users and 63 suppliers to the system. It improved interfaces with ERP systems and developed the data validator with Agile's Software Development Kit. The data validator checks product data accuracy, compliance with local manufacturing conditions and the compatibility of translated data with local ERP data formats. Further steps in this effort will involve refinement of the workflow internally and with suppliers.

Results: The initiative reduced the product development cost structure by improving the timeliness and accuracy of product data and ECM processes across Dell and its supplier network. Dell achieved most of these benefits during late product design stage (just before manufacturing begins). This is the point in the product life cycle with the greatest volume of engineering change to manage internally it is the point in time at which suppliers have the greatest risk of error. Dell reduced the resources necessary to process engineering changes by more than 30 percent. The average time to process an engineering change dropped by 50 percent. Thirty percent fewer people are needed for configuration management globally, since employees are able to process four times as many engineering changes as they had done previously. This enabled personnel to be redeployed to other critical tasks throughout the product's life cycle. Improvements in the accuracy and timeliness of data reduced unnecessary scrap and rework. On average, Dell processes more than 4,000 changes monthly on more than 20,000 parts. The data validator traps more than 8,500 errors each month. This has substantially reduced the amount of personnel required to intervene on the translation of product data to ERP systems.

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Management Principles
The Dell Direct Model highlights how the build-to-order philosophy was central to the Dell management principles. The direct model was the visible and important principle of Dell: it aligned all of Dells business units and people. Within the Dell organization, the direct model meant that everyone was a customer.

For example, the IT organization had very few central staff. Almost all of the IT personnel reported directly to business units. Similarly, Dell University was structured into different colleges each residing in a business units. In fact, Dell Universitys budget did not come from corporate, it came from each business unit, and hence Dell Universitys survival depended on the satisfaction of each of its customers.

The philosophy of central planning with local implementation supported the direct model principle. This philosophy enabled the organization to grow at its breathtaking rate because it provided the capability of build to order for all parts of the organization and all business processes needed to run the corporation. In addition to the principals of build to order and direct marketing, Dell Computer managers spoke of a few key principles that were fundamental to their business. These included:

Exchange inventory for information Velocity, value and volume Constant change Criticality of coordination

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Information Systems at Dell

Information systems were critical to Dell. The information systems supported the Dell Direct business model by providing a range of tools from order entry to production integration. Information systems provided the means for delivery of instant information to employees through e-mail or over the intranet. Also, the information system were a way to connect suppliers to the business, to collect and analyze information collected from the marketplace, and to support decisions on everything from hiring practices to product offerings to pricing. The backbone of the information system was an architecture called "G2". The G2 architecture was an object-based infrastructure, with a web browser front end interface. It had a single point of connection and was built in small pieces. There was local control of functionality but a global view of the business. The primary components of the G2 architecture were commonly available applications such as Microsoft office, database engines, and Internet servers. The G2 architecture was similar in design to the Dell organization structure, which was also built in small pieces, with local control but a global view of the business.

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The Dell business model resulted in a different production profile than other business models. The direct model implied that every production run is unique in some way, and hence every lot was of quantity one.

The Management Information System is highly decentralized. No programmers reported directly to the CIO. Instead, each division and business had some IT people. Dells E-commerce is B2C, i.e. Business to Consumer. As the name suggests, it is the model taking businesses and consumers interaction. Online business sells to individuals. The basic concept of this model is to sell the product online to the consumers. B2C is the indirect trade between the company and consumers. It provides direct selling through online. For example: if you want to sell goods and services to customer so that anybody can purchase any products directly from suppliers website. Directly interact with the customers is the main difference with other business model. As B2B(Business to Business ) it manages directly relationship with consumers, B2C supply chains normally deal with business that are related to the customer.

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For Transaction Processing system Dell follows Electronic Retailing which is an E-Commerce application. It is the direct sale from business to consumer through electronic storefronts.

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On-line transaction processing (OLTP), i.e. the method of computerized processing in which each transaction is processed immediately and the affected records are updated.

Dell | Oracle database solution is designed and built to meet the unique needs. It enables one to make smart decisions based on data thats available in milliseconds and keep that data out of the wrong hands. Dells deep expertise in designing, deploying and managing Oracle database solutions enables:

Automate customer interactions through custom online transaction processing (OLTP)

Gain valuable insights from up-to-the-second data collected into a reliable, highperformance data warehouse

Keep your finger on the pulse of your business operations with an enterprise resource planning (ERP) system

Keep mission-critical applications available in the face of unexpected disruption Free your IT staff from time-consuming, day-to-day systems management so they can focus on helping your business innovate

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Order processing System of Dell

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Office automation systems (OAS) are configurations of networked computer hardware and software. A variety of office automation systems are now applied to business and communication functions that used to be performed manually or in multiple locations of a company, such as preparing written communications and strategic planning. In addition, functions that once required coordinating the expertise of outside specialists in typesetting, printing, or electronic recording can now be integrated into the everyday work of an organization, saving both time and money. Dell Services has proven experience and expertise helping organizations worldwide develop, enhance, and manage their applications and IT infrastructure to maximize returns on their IT investments. And we can help your business achieve and increase competitive advantage through the creation of flexible, customer-focused, enterprise-wide global information systems.

The Customer Experience Initiative System

Customers were initially divided into three categories - Large businesses, Small to Medium businesses, and personal consumers. Each group was supported in a manner consistent with their requirements. Large businesses had dedicated sales people who managed the orders. Small and medium businesses shared sales staff who insured that the needs of these businesses were met. Individual customers interested in Dells products were served by either telephone based inside sales people, or later by the sales system on the Internet. Underlying all customer accounts was the famous Dell Direct distribution strategy. The inside sales force took phone calls from a toll-free phone number from customers seeking information about the products and placing orders. These sales people sat at a computer at one of the Dell offices and serviced customers as they called in. The entry of an order by the inside sales group initiated the entire build to order process. Customers with corporate accounts could order from these sales people, or they could work with the dedicated sales teams for the corporate account. Each large account had field people in charge of the relationship with the client, and dedicated team members in Austin, Texas to service the account. But the ability to
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call directly to Dell, order a computer, and have it arrive a week later became the cornerstone of the business.

In 1996, Dell expanded their direct order model to the Internet, and their success in this medium quickly became legendary. Scott Eckert, Director of Dell On-Line, began as Michael Dells Executive Assistant in 1995. In 1996 when Dell decided to launch an on-line sales program, Eckert took over the project. In the first quarter of 1997, the on-line business did $1million per day in sales. In the second quarter, they did $2 million per day, and the success continued. By the end of the first quarter of 1998, Dell logged $ 5 million in sales per day, by the end of the third quarter it was up to $10 million per day in sales over this channel, and the rate of growth was expected to continue. In addition, the web site had grown in functionality. In 1994, it was a simple technical support tool for disseminating tips and bug-fixes to internal and external customers. In addition, Dell conducted customer surveys. In mid-1996, Eckert was put in charge of using the Internet for a yet to be determined online business. The first application was an order status system, where customers could track their orders through the Dell process By fall 1996, the configuration system was ported to the Internet, and electronic commerce began. The configurator assists customers in designing the exact product they need, and in pricing it out. Once this system was available to customers, the revenue took off.

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Dell Computers was best known for its pioneering use of the direct marketing channel for selling and distributing personal computer systems. Its well-known strategy of manufacturing a system for a customer, or build to order, provided Dell with a cascading series of advantages over its competition-including low inventory costs, no dealer costs, and current technology in every system manufactured.

Conventional wisdom said that it was necessary to have inventories of systems in order to provide customers with many choices, and it was necessary to have those systems sold through dealers who could explain the complexities of the system. Instead, Dell gave the customer a chance to pick whatever features he or she wanted from those available. In addition, Dell manufactured systems only after they were ordered by a customer, which conventional wisdom would say was either too costly or took too long. But Dell was able to guarantee delivery within five to seven days of order. Finally, Dell saw that personal computers were becoming a commodity and realized that sales people would not be needed to explain the systems in the conventional, physical way. The result was a win/win situation for both Dell and its customers. Factory inventory was at most three days, supported by tight alliances with suppliers who deliver smaller loads, but more frequently than traditional manufacturing systems. Downstream inventory was zero since the systems were directly shipped to customers. No one in the stream was sitting with more than 7 days of inventory, whereas traditional supply chains held up to 60 days of inventory of parts and 30 days of inventory of systems for dealers.

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Dells Future
One executive commented that inventory might be counted in "hours" rather than "days". Since parts arrive on one side of the plant, are immediately available for the assembly line, then shipped out the other side of the plant, it is conceivable that Dell would only have inventories of parts for a few hours, while the systems were being made. It is clear to us that Dell will continue to drive inventory down by increasing velocity in its relentless pursuit to retain its build-to-order leadership position in the industry. The real advantage is for Dell to position itself as an information systems solution provider, rather than a hardware vendor, providing customers with entire systems, which integrate Dell hardware and Dells internal capabilities. This is already beginning to happen utilizing the Internet. Dells top customers use a web page to configure, place, and track orders, as well as to obtain technical and sales information. This web page resides on Dells internal IS system, but appears to the customer as an automated internal IS procurement process. In other words, in 1998, Dell offered a solution to the information systems department for the procurement process of ordering Dell equipment.

Dellware provided a mean for customers to request special software and peripherals. Michael Dell suggested that the company's next step would be to get closer to buyers. Finally, as the experience base of the Dell organization grows, they might become the services outsourcer for the entire customer IS organization. In 1998, Dell was providing a similar service to Boeing.

The advantage to Dell is the increased opportunity for revenue and the increased access to information, which potentially translates into new product and service offerings. The advantage to the customer is the traditional one-stopshopping arrangement for products and services, offloading these tasks from information systems organizations, and freeing the IS management up to concentrate on core business issues rather than procurement and services.

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