From SCDigest's On-Target E-Magazine
April 5 , 2011
Supply Chain News: Dell Exec Annette Clayton, MIT's David Simchi-Levi Answer Questions on Dell's Supply Chain Transformation
Clayton Discusses Role of Dell's Program Management Office, How Company Handle Change Management and More
SCDigest Editorial Staff
On March 16, Supply Chain Digest and The Supply Chain Television Channel hosted a special Videocast on Dell's Supply Chain Transformation, focusing on the major effort Dell took to integrate and improve its overall supply chain and to segment that supply chain to optimize performance for both its traditional build-to-order model and newer retail market channels.
That broadcast, perhaps the largest on-line event in Supply Chain history, featured Annette Clayton, VP of Global Operations and Supply Chain for Dell, and MIT's Dr. David Simchi-Levi, who consulted with Dell on the program..
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The PMO is still in place today. One of the things we as the leaders of this transformation all learned was that trusting this process paid dividends. It continues to deliver results for us today.
Annette Clayton, Dell |
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What Do You Say?
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After the formal presentation, Clayton and Sinchi-Levi took audience questions, delivered from SCDigest editor Dan Gilmore, moderator of the broadcast. The answers were insightful, and we share highlights of that discussion below. The entire Q&A session can of course be heard as part of the full broadcast, now available on-demand: Videocast: The Dell Supply Chain Transformation.
Gilmore: Annette, a viewer notes we did not talk much about change management issues associated with the transformation. How did Dell handle change management challenges?
Clayton: That's a great question Dan. As I think about the change management, there were four key things that stick out for me.
The first was that this was an end-to-end change, it was not just an operational thing. We needed our colleagues across the company - marketing, the product groups, sales, services - to move with us. So we focused on an end- to-end transformation. That caused us to have to identify a lot of interdependencies. We had to spend a lot of time understanding how the supply chain strategy was interlinked across the company.
It's in our DNA at Dell to be metrics focused, so we built scorecards that defined what success looked like, which included obvious things like forecast accuracy and supply chain cost, but also different ones such as how well our new supply chain capabilities for the customer were being utilized.
One other thing in terms of good practice for change management, we did phased releases, and often released key enablements together, because they were so dependent on each other. These phased releases became very important, and everyone in the company would know when they had to move to next state from current state. That was key.
Gilmore: David, you talked in the broadcast about finding synergies among different supply chains within a company to reduce complexity and cost. The question is, how difficult is it to find those synergies, and can they always be found?
Simchi-Levi: This is a great point. In general, there are five or six opportunities for synergies, in procurement, product design, manufacturing, logistics, order fulfillment, etc.. So for example, when a company is investing in a new business, or a merger or acquisition, it's important to look not only at potential revenue growth but it's also important to look at the potential supply chain synergies.
My experience is that many times during an M&A, senior executives focus on the business growth and do not have enough attention on synergies across customer value proposition, across operations, across supply chain strategies.
 While it is sometimes difficult to find the synergies, it is important work.
Gilmore: A follow up from me. In the broadcast today, you focused on what I would call the supply chain network synergies between Dell's two supply chains. Are you saying the opportunities often go beyond just the physical network?
Simchi-Levi: Yes. We focused today just on the synergies in the network design and logistics, but there are other synergies in procurement, in product design, and a lot of these other synergies were also exploited in this project.
Gilmore: Annette, we had several questions come in around the concept of the Program Management Office that you used for this project. That approach is often used for major IT projects, but less so for supply chain initiatives. Can you explain the function of the PMO, and is it still active?
Clayton: The Program Management Office was a really important element around the leadership commitment around this transformation.
As part of that, we actually had a dedicated senior executive who as I spoke about was focused on the change management end-to-end. With particular person and the entire team that was working inside this space, there was a big premium placed on their influence skills and collaboration skills.
So not only are the good at grinding out the work and managing the details, but they are well respected individuals across the company.
(Supply Chain Trends Story Continued Below)
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