How to segment supply chain _ DELL case study

1. DELL DISTRIBUTION
Presented by
MAROUA AREGRAG

2. PLAN
- DELL Inc. BACKGROUND
- MARKET SITUATION
- COMPETITION ANALYSIS
- SEGMENTATION
- PROBLEMATIC
- DELL’S SUPPLY CHAIN SEGMENTION
- Key practices
- Results
- Video of DELL’s supply chain
- ‘’SEGMENTED HOSPITAL SUPPLY CHAIN’’ CASE
- CONCLUSION
- BIBLIOGRAPHY

3. BACKGROUND
• Founded in Austin, Texas (May 1, 1984)
• Michael Dell (Chairman & CEO)
• Operational regions: Americas; Europe, MiddleEast and Africa
(EMEA); Asia-Pacific and Japan(APJ)
• Dell is leader in using supply chain management.
DELL Inc. BACKGROUND
MARKET SITUATION
COMPETITION ANALYSIS
SEGMENTATION
PROBLEMATIC
DELL’S SUPPLY CHAIN SEGMENTION
Case study : HOSPITAL SUPPLY CHAIN
CONCLUSION

4. MARKET SITUATION
- Worldwide PC shipments totaled 80.8 million units in the fourth quarter of
2014 (4Q14)
DELL Inc. BACKGROUND
MARKET SITUATION
COMPETITION ANALYSIS
SEGMENTATION
PROBLEMATIC
DELL’S SUPPLY CHAIN SEGMENTION
Case study : HOSPITAL SUPPLY CHAIN
CONCLUSION
Vendor 4Q14 Shipments 4Q14 Market
Share 4Q13 Shipments 4Q13 Market
Share
1. Lenovo 16,049 19.9% 15,294 18.5%
2. HP 15,880 19.7% 13,796 16.7%
3. Dell 10,879 13.5% 10,026 12.1%
4. Acer Group 6,220 7.7% 6,026 7.3%
5. Apple 5,750 7.1% 4,838 5.8%
Others 25,994 32.2% 32,798 39.6%
Total Market 80,772 100.0% 82,778 100.0%
Source: IDC Worldwide Quarterly PC Tracker, January 12, 2015

5. Competition analysis
DELL Inc. BACKGROUND
MARKET SITUATION
COMPETITION ANALYSIS
SEGMENTATION OF DELL
PROBLEMATIC
DELL’S SUPPLY CHAIN SEGMENTION
Case study : HOSPITAL SUPPLY CHAIN
CONCLUSION

6. Segmentation of DELL
• DEMOGRAPHIC : No age, gender or race bias but income,
occupation & education
• GEOGRAPHIC : US, EMEA and APJ
• PSYCHOGRAPHIC : Lifestyle, Interests
• BEHAVIORAL : benefits sought by consumers such as low
price with good quality & service
DELL Inc. BACKGROUND
MARKET SITUATION
COMPETITION ANALYSIS
SEGMENTATION OF DELL
PROBLEMATIC
DELL’S SUPPLY CHAIN SEGMENTION
Case study : HOSPITAL SUPPLY CHAIN
CONCLUSION

7. PROBLEMATIC
How did DELL refine its supply chain
portfolio to reduce the complexity of
demand consumer ?
DELL Inc. BACKGROUND
MARKET SITUATION
COMPETITION ANALYSIS
SEGMENTATION OF DELL
PROBLEMATIC
DELL’S SUPPLY CHAIN SEGMENTION
Case study : HOSPITAL SUPPLY CHAIN
CONCLUSION

8. DELL’s supply chain
segmentation
What’s supply chain segmentation ?
DELL Inc. BACKGROUND
MARKET SITUATION
COMPETITION ANALYSIS
SEGMENTATION
PROBLEMATIC
DELL’S SUPPLY CHAIN SEGMENTION
Case study : HOSPITAL SUPPLY CHAIN
CONCLUSION
Designing and operating distinctly different end-to-end value chains (from
customers to suppliers) optimized by a combination of unique customer value,
product attribute, manufacturing and supply capabilities, and business value
considerations.

9. • Key practices of DELL :
Disintermediation : 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.
DELL Inc. BACKGROUND
MARKET SITUATION
COMPETITION ANALYSIS
SEGMENTATION
PROBLEMATIC
DELL’S SUPPLY CHAIN SEGMENTION
Case study : HOSPITAL SUPPLY CHAIN
CONCLUSION
DELL’s supply chain
segmentation

10. • Key practices of DELL :
Improving customer value: This move gave customers a chance
to configure PCs according to their specific computing needs.
Process and operations innovation: Re-examining process-based
work to see if a change could improve efficiency.
Let data do the driving: Using the easily accessible sales and
customer feedback data (from online sales) allowed Dell to stay
ahead of the demand curve in the rapidly evolving PC market.
DELL Inc. BACKGROUND
MARKET SITUATION
COMPETITION ANALYSIS
SEGMENTATION
PROBLEMATIC
DELL’S SUPPLY CHAIN SEGMENTION
Case study : HOSPITAL SUPPLY CHAIN
CONCLUSION
DELL’s supply chain
segmentation

11. The creation of an end- to-end model in which multiple capabilities can be
arranged in unique configurations to satisfy specific customer requirements :
DELL’s supply chain
segmentation
DELL Inc. BACKGROUND
MARKET SITUATION
COMPETITION ANALYSIS
SEGMENTATION
PROBLEMATIC
DELL’S SUPPLY CHAIN SEGMENTION
Case study : HOSPITAL SUPPLY CHAIN
CONCLUSION

12. Results:
- Stronger connection to customers
- Complexity reduction
- Improved internal collaboration
- Cost reduction
- Improved forecast accuracy
DELL Inc. BACKGROUND
MARKET SITUATION
COMPETITION ANALYSIS
SEGMENTATION
PROBLEMATIC
DELL’S SUPPLY CHAIN SEGMENTION
Case study : HOSPITAL SUPPLY CHAIN
CONCLUSION
DELL’s supply chain
segmentation

13. DELL Inc. BACKGROUND
MARKET SITUATION
COMPETITION ANALYSIS
SEGMENTATION
PROBLEMATIC
DELL’S SUPPLY CHAIN SEGMENTION
CONCLUSION
DELL’s supply chain
segmentation

14. Research done by Engineering systems department at MIT:
The main challenges of the Hospital :
- Inventory items move directly from a staging warehouse to the
bedside of a specific patient.
- Reduce overheads
- Minimize space for inventory
- Reduce time required by clinical staff to retrieve needed items
DELL Inc. BACKGROUND
MARKET SITUATION
COMPETITION ANALYSIS
SEGMENTATION
PROBLEMATIC
DELL’S SUPPLY CHAIN SEGMENTION
Case study : HOSPITAL SUPPLY CHAIN
CONCLUSION
Hospital’s supply chain
segmentation (new case)

15. It was proposed that hospital supply chains be segmented on the
following bases:
DELL Inc. BACKGROUND
MARKET SITUATION
COMPETITION ANALYSIS
SEGMENTATION
PROBLEMATIC
DELL’S SUPPLY CHAIN SEGMENTION
Case study : HOSPITAL SUPPLY CHAIN
CONCLUSION
Hospital’s supply chain
segmentation (new case)
Unit Price
- Expensive inventory
items (Locked cabinets)
- Items not requiring tight
control (open shelf
systems)
Unit Size
- Large items (near
continuous review)
- Small items (Less
critical review)
Unit Critical
- Critical items (evoluate
the inventory need)
- Non critical items (open
storage)
- High critical items
(controlled locked storage)

16. CONCLUSION
Critical Success Factors
• Start with customer value
• A unified, end-to-end business strategy
• Executive sponsorship
• Create a center of excellence for continuous analysis,
monitoring and learning
DELL Inc. BACKGROUND
MARKET SITUATION
COMPETITION ANALYSIS
SEGMENTATION
PROBLEMATIC
DELL’S SUPPLY CHAIN SEGMENTION
Case study : HOSPITAL SUPPLY CHAIN
CONCLUSION

17. BIBLIOGRAPHY
http://www.slideshare.net/8097174415/dell-corporation-strategy
http://infotechlead.com/2013/08/07/hp-leads-indian-pc-market-with-
25-share-lenovo-acer-dell-apple-dip-in-q2/
http://www.supplychainquarterly.com/topics/Strategy/201201segmen
tation/
https://www.marsdd.com/mars-library/case-study-dell-distribution-
and-supply-chain-innovation/
http://cultureinnovation.fr/etude-de-cas-dell-un-systeme-de-
distribution-particulier/