Business Strategy
Supply Chain Management
Chapter 5
Network Design in the Supply
Chain
5-1
Outline
A strategic framework for facility location
Multi-echelon networks
Gravity methods for location
Plant location models
5-2
1. Network Design Decisions
Facility role: What role should each facility play? What processes should be performed at each facility?
Facility location: Where should facilities be located?
Capacity allocation: How much capacity should be allocated to each facility? Market and supply allocation: What markets should each facility serve? Which supply sources should feed each facility?
(How many plants, DC’s, retail stores, etc. to build?)
5-3
Dell, Inc.
Designs, develops, manufactures, markets, services and supports a range of computer systems, including
–
–
–
–
enterprise systems (servers, storage and networking products and workstations), notebook computer systems, desktop computer systems software and peripherals.
Services that help maximize information technology (IT), rapidly deploy systems and educate IT professionals and consumers.
Financing alternatives, asset management services and other customer financial services for its business and consumer customers in the United
States through Dell Financial Services L.P., a joint venture between Dell and CIT Group, Inc.
The Company is generally managed on a geographic basis: the Americas,
Europe and Asia Pacific-Japan.
Vital Statistics
Founded in 1984
Employs 83,000 people worldwide
Revenue: 60.70 B
Enterprise Value: 19.2 B
Profit Margin: 3.36%
History
1984
1985
1990
1994
1997
2007
Founded by Michael Dell
Assemble & market own PCs
Sell through retail outlets
Withdrawn from retail
PC outsourcer back to retail channel
Success
Focus on delivering the best possible customer experience by directly selling computing products and services online
Business Model
Direct sales
– Direct customer
Chapter 5
Network Design in the Supply
Chain
5-1
Outline
A strategic framework for facility location
Multi-echelon networks
Gravity methods for location
Plant location models
5-2
1. Network Design Decisions
Facility role: What role should each facility play? What processes should be performed at each facility?
Facility location: Where should facilities be located?
Capacity allocation: How much capacity should be allocated to each facility? Market and supply allocation: What markets should each facility serve? Which supply sources should feed each facility?
(How many plants, DC’s, retail stores, etc. to build?)
5-3
Dell, Inc.
Designs, develops, manufactures, markets, services and supports a range of computer systems, including
–
–
–
–
enterprise systems (servers, storage and networking products and workstations), notebook computer systems, desktop computer systems software and peripherals.
Services that help maximize information technology (IT), rapidly deploy systems and educate IT professionals and consumers.
Financing alternatives, asset management services and other customer financial services for its business and consumer customers in the United
States through Dell Financial Services L.P., a joint venture between Dell and CIT Group, Inc.
The Company is generally managed on a geographic basis: the Americas,
Europe and Asia Pacific-Japan.
Vital Statistics
Founded in 1984
Employs 83,000 people worldwide
Revenue: 60.70 B
Enterprise Value: 19.2 B
Profit Margin: 3.36%
History
1984
1985
1990
1994
1997
2007
Founded by Michael Dell
Assemble & market own PCs
Sell through retail outlets
Withdrawn from retail
PC outsourcer back to retail channel
Success
Focus on delivering the best possible customer experience by directly selling computing products and services online
Business Model
Direct sales
– Direct customer