Improve the General Performance for Dell Inc

Using Fundamentals of Supply Chain Management Simulation to Improve the General Performance for Dell Inc.
Name
University
SUPPLY CHAIN PERFFORMANCE IMPROVEMENT
Introduction:
The general improvement of the supplier performance is a concern for most organizations as both the endogenous and exogenous factors of management affect it. This simulation utilizes mechanisms such as the balance sheet, cash flows, income statement and other consolidated financial statement to improve performance.
Dell has committed itself to operate in a way that would not only achieve excellence in operations but also benefit the company financially and would result in satisfied customers. Because of its commitment to constant improvement the company installed the direct selling method where JIT system and lean production were adopted which improved company`s efficiency and effectiveness in many areas. On the other hand the company used the rapidly growing IT technology well by working on customer focused ordering system which enable them to design their own product, which resulted in much satisfied customers and zero inventory level. Zero inventory level was further implemented by changes in the supply chain and integration of the entire company`s operations into the supply chain. Through redesigning of systems and process, Dell is able to become the most efficient PC manufacturers in the world. Dell has installed a system which serves as a benchmark for many manufacturing companies.
As a manager I have a mandated task to figure it out on how to improve on costs, delivery of computers, product quality and the general market image. The company works with more than 100 suppliers. The simulation assumes that the company deals in one main product, supply of computers, and also have one constant unit price in stock moving along the supply chain. The company works with more than 100 external suppliers, with 40 of them making up to 80% of it outsourcing expenditure. The overseas suppliers are given due consideration depending on the market structure in their country and the current exchange rates against the dollar.
Balance Score Card:
Financial Perspective
Objectives

Measures

Cost Leaders

Unit Cost, difference in price compared to competitors

Increased Revenues

Growth in Sales, Net sales

Adequate ROCE

ROCE ratio

Profitability

Profit margin, Gross Profit, Net Profit

Customer Perspective
Objectives

Measures

Customer Satisfaction

No. of complaints, No. of repeated customers

Customer Loyalty

No. of repeated customers, Sales surveys

Timely Delivery

Cycle Time

Internal Perspective
Objectives

Measures

Innovation

No. of new products introduced, expenditure on research and development.

Improvement in Supply Chain Management

% of cost reduced, time to deliver a product

Efficiency in Operations

Variances, asset utilization.

Learning and Growth Perspective
Objectives

Measures

Employee satisfaction and retention

Employee turnover rate, productivity rate

Development of competencies

Employee productivity rate

Trained Employees

Training programs, productivity rate

Income Statement
31-Oct-2012 31-Jan-2012 30-Apr-2012 31-Jul-2012
Revenue 16,031 14,422 14,483 13,721
Cost of revenue

12,646

11,355

11,345

10,849

Gross margin

3,385

3,067

3,138

2,872

SG&A

2,218

2,009

1,976

2,013

R&D

236

234

261

270

Total operating expenses

2,454

2,243

2,237

2,283

Operating income

931

824

901

589

Investment and other income, net

(24)

(32)

(63)

(38)

Income before taxes

907

792

838

551

Income tax provision

143

157

106

76

Net income

764

635

732

475

Balance Sheet
Assets
All values USD millions.

31-Oct-2011

31-Jan-2012

30-Apr-2012

31-Jul-2012

 Cash & Short Term Investments

13.84B

14.82B

13.72B

12.01B

 Total Accounts Receivable

10.02B

9.8B

9.49B

10B

Inventories

1.4B

1.4B

1.47B

1.62B

Other Current Assets

3.01B

3.42B

2.85B

3.03B

Total Current Assets

28.26B

29.45B

27.52B

26.66B


31-Oct-2011

31-Jan-2012

30-Apr-2012

31-Jul-2012

Net Property, Plant & Equipment

2.12B

2.12B

2.12B

2.06B

Total Investments and Advances

2.18B

3.4B

3.5B

2.75B

Intangible Assets

7.9B

7.7B

7.81B

10.17B

Other Assets

302M

45M

998M

1.12B

 Total Assets

42.04B

44.53B

43.29B

44.1B

Liabilities & Shareholders' Equity

31-Oct-2011

31-Jan-2012

30-Apr-2012

31-Jul-2012

ST Debt & Current Portion LT Debt

1.83B

2.87B

3.19B

2.61B

 Accounts Payable

11.11B

11.66B

10.97B

11.19B

Income Tax Payable

-

432M

-

-

Other Current Liabilities

7.28B

8.65B

6.66B

6.91B

 Total Current Liabilities

20.22B

22B

20.81B

20.71B

Long-Term Debt

6.43B

6.39B

5.81B

5.83B

Provision for Risks & Charges

-

2.56B

0

0

Deferred Taxes

0

(40M)

0

0

Other Liabilities

6.73B

4.26B

7.31B

7.81B

 Total Liabilities

33.38B

35.62B

33.93B

34.35B

 Common Equity (Total)

8.66B

8.92B

9.36B

9.75B

Common Stock Par/Carry Value

12.07B

34M

12.31B

12.41B

Retained Earnings

27.47B

28.2...