Lyle Week paper
This business model keeps costs low in shipping and inventory, but can see increased manufacturing sots because of the supply chain requirements involved in the custom fabrication of individualized orders. The case study begins with the investigation of the increased manufacturing costs that reached an alarming level in 2005. Case Study Question Responses The case study questions involve process analysis, decision-making, supply chain optimization, and root cause analysis. Because Dell Inc. Assembled a group of appointed experts with a division director leading the business process improvement, the data required to answer the questions is readily available in easy to use figures, tables, and charts. The increased manufacturing costs relate directly to the supply chain, and solutions to the supply chain and manufacturing problems for the company will result from the task team analysis. Examining the effects of the recommended changes resulting from the root cause analysis on the supply chain also provide valuable insights that may be applied to nearly any manufacturing process.
Manufacturing Costs Identification Why does AL incur higher manufacturing and logistics costs than AL? Identify costs incurred by 15 and not by AL. Identify any costs incurred to only AL and not AL. Manufacturing a consumer ready PC from an L’S configuration versus an AL configuration requires the extra steps of installing the motherboard, and often the power supply. This increase costs because of the additional assembly costs, and supply chain issues related to the additional components.
These supply chain issues include the quality Of components, forecast inaccuracies, the volatile demand of new product introductions, and the largest issue of suppliers not meeting delivery obligations. The steps involved in elevating an AL assembly to an AL incur the additional costs of all f these potential supply chain issues, and the costs of the additional components and assembly. The 1. 5 costs are relatively stable because without the motherboard installed in the chassis, the chassis is in a state that could satisfy a wide variety of customer orders.
Because of the associated costs of installing a customer-specified motherboard into a mature chassis, the transition to an AL chassis may spike manufacturing costs. Manufacturing Solutions Which of the six proposed manufacturing solutions should Dell implement based on survey results (Fig. 6-1 Why? What are the pros and cons of this commendation? Based upon the cost per box information and the survey results, option AAA -integration at supplier logistics center using Dell factory associates appears to be the best solution.
The reasons behind this decision come from the information that option AAA has the lowest complexity score from the experts within the company, capital expenditure is low, cost per box is below the average of the options, and there is no impact to the current process. The pros of this option are that a minor change in the supply chain should provide a ready to customize chassis without sign incant cost per box increases. The cons are a minor capital expenditure, and hiring personnel to build the new chassis at the supplier logistics center.
Chippies Supply Shortage What would you do if the chippies supply shortage further deteriorated? The supply of chippies is critical to competing a product, and the shortages account for more than 60% of the supply chain problems of elevating an AL chassis to an 1_6. The only real way to combat a known problem of this magnitude is to increase the safety stock of chippies. The small size should not create much of a storage problem, and the ability to keep the supply Hahn moving should cover the additional inventory costs.
Methodology Analysis How good is the methodology employed by the Business Process Improvement (BPI) team to determine the optimum manufacturing option for Dell? Are there more effective approaches? A survey of experts within the survey area should yield a variety of ideas and feedback from a numerous viewpoints. The survey was an excellent choice, and I cannot think of a more effective approach. Supply Chain Changes What changes need to be made in the supply chain for Dell to effectively address the root causes contributing to the increase of AL manufacturing?
What would be the effect of these changes? The changes should start with creating a reasonable safety stock of chippies to keep the supply chain operating. The next issue is checking or testing the quality of the motherboards before the installation Step so that developing a new forecast could yield a close to accurate supply. The final issue is proper demand forecasting for daily operations as well as new product introductions. The long lead times for components and volatile demand levels, ad to the increased manufacturing costs, and may decrease customer value in the long
Learning Application run. What have you learned from this case study that you would be able to apply in an organization where you have previously worked or currently work? The department where I work produces a product that has a similar complexity that depends on multiple areas contributing elements of the final product that must be assembled in the correct order, and function as a complete unit – just like the Dell desktop PC. This case study illustrated the problems that we experience, and used a smart survey to gather feedback for informed decision-making.