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Dell Inc.

: Improving the Flexibility of the desktop MGT-680 : Supply Chain Management pc Supply Chain
NSU MBA program | MGT-680 | Instructor: Mr. Aref Bashir Case Study on

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Dell Inc.: Improving [Pick the date] the Flexibility of the Case study report on Mohammad Motaher Hossain desktop pc Supply Chain
Submitted to: Mr. Aref Bashir Submitted By:
Rajib Ahmed Qureshi (ID: 082567 060) Mohammad Motaher Hossain (ID: 1010349060) Quazi Md. Ashikuzzaman (ID: 1010601 060) S.M.Taufiq Imam (ID: 1030313 060)

Submitte d on: 03rd May, 2012

Question-1: Why does L5 incur higher manufacturing and logistics costs than L6? What are some of the costs that are incurred in L5 but not in L6? Are there any costs that apply to only L6 but not L5? Answer: Key factors behind the higher logistics cost of L5 than L6 are as follows, 1. Motherboard air freight cost 2. Separate logistics cost for motherboard & chassis 3. Incorporation of 3rd party integrator Some of the costs that are incurred in L5 but not in L6 are, 1. Motherboard packaging cost 2. Motherboard air freight cost 3. Local/regional integration cost Apart from this, if we say about the any other cost that applies only for L6 that is the China Integrators cost.

Question-2: Which of the six proposed manufacturing solutions should DELL implement, based on the survey result (Table: 6-1)? Why? What are the pros & cons of this recommendation? Answer: Amongst the six proposed manufacturing solutions, from a capability & resource management perspective, DELL should implement Option 4. Pros & cons of this manufacturing option are discussed below, Pros: 1. Less time, money & planning required upgrading the 3PI assembly lines. 2. Ramp time at 3PI will be shorter than Dell factory. 3. Chassis supply disruption will be minimized. 4. Dell will possess greater opportunity to deal with product quality related issues more effectively & efficiently. Cons:

1. Increased complexity in internal cost accounting. 2. Extra production control & inventory control headcounts are required.

Question-4: How good is the methodology employed by the BPI team to determine the optimal manufacturing option for DELL? Are there more effective approaches? Answer: Methodology employed by DELLs BPI team to determine the optimal manufacturing option for DELL was good as the following key aspects were deeply considered, 1. Process smoothness & sustainability 2. Cost per box 3. Product quality 4. Capital investment 5. Material handling 6. Logistics Some other effective approaches can be, 1. Push-Pull strategy 2. Geographical location of suppliers