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Canada’s Asia-Pacific Gateway and Corridor Initiative
Towards A Value Added Strategy Garland Chow Associate Professor, Sauder School of Business D...
Canada’s Asia-Pacific Gateway and Corridor Initiative
Towards A Value Added Strategy Garland Chow Associate Professor, Sauder School of Business Director, Bureau of Intelligent Transportation Systems and Freight Security The University of British Columbia June 12, 2008
Dell Case Study to Illustrate 4 Points • Dell needs just like any other Canadian manufacturer or retailer importing in demand driven and global environment • Uses Total Landed Cost Analysis • Utilizes Vendor Managed Inventory (VMI) and supplier hubs • TPLs used but not everyone is a Dell
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Dell Supply Chain Planning & Execution Global / Regional Procurement
Demand/ Supply Management
Demand/Supply Balancing
Continuity of Supply
Sales Build to customer specifications
Supplier
Dell SLC
Customer
Supplier 2-5 days
2-5 days
Materials ordering cycle – 10-180+ days
Supply Chain Management coordinates information, materials, and
logistics to support customer requirements. Demand/Supply constraints are continuously communicated to sales/ operations/procurement. Focus on continuity of supply and direct vendor relationships ensure material availability. 3
Current VMI Model VMI (supplier owns until title transfers)
Title Transfer
Explicit Costs
Embedded Costs
Material Transfer
Supplier Manufacturing
Factory / Merge Center
(SLC) Warehouse
Material $90
Freight
+ $5
+ $2
SLC
+ $1
Other (CCI) =
=
Total Landed Cost $98 4
Established a repeatable, reliable, consistent, air transportation network for Dell and our Suppliers.
EMEA Limerick Coventry Tilburg
AMF NFC AFC RFC
APJ Xiamen Penang (Aus,JPN)
Highlights Three 747-400 Freighters per day Leveraged volume of FG & Supplier Parts Annual pricing (no peak rates) Consistent Delivery Cycle Time Improvements Supply Chain Visibility
BCC
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Established a repeatable, reliable, consistent Ocean Network for Dell and it’s Suppliers EMEA Limerick Coventry Tilburg