Dell’s Supply Chain

Two articles on Dell’s supply chain.

Living in Dell Time by Joshua Lutz:

The aftershocks of the port closings reverberated for weeks. Many companies began to question the wisdom of running so lean in an uncertain world, and demand for warehouse space soared as they piled up buffer inventory to insure against labor unrest, natural disasters, and terrorist attacks. But for Dell, the episode only reinforced the value of living on the knife’s edge.

Inventory Decisions in Dell’s Supply Chain [the broken link was removed] by Roman Kapuscinski, Rachel Q. Zhang, Paul Carbonneau, Robert Moore and Bill Reeves:

Many components lose 0.5 to 2.0 percent of their value per week, and a supply chain packed with yesterday’s technology is nearly worthless. With its direct sales, however, Dell carries very little inventory: the whole organization concentrates on speeding components and products through its supply chain. Dell delivers new products to market faster than its competitors and does not have to sell old products at a discount, because it has none.

Dell’s stock has been taking a beating recently, but I remain positive on the second to worst performer 10 stocks for 10 years post. Just over 6 months since the post Google leads the pack up 77% (Toyota is next up 27%) while Pfizer and Dell are down 19% and 17% respectively (the only other decliner is Cisco down .5%).

This entry was posted in Management. Bookmark the permalink.