Dell Push-Pull Supply Chain Strategy

[@arkasadhu2820]

It's 2022 and I am still learning from your videos. Thanks a lot.

[@benngoma537]

great video. i am a SCM honours student and i found it really helpful

[@ErickC]

Fascinating - now that I think of it, with the exception that everything was done in-house, push-pull was basically how Motown made music. It might seem like an odd analogy, but Motown was the musical equivalent of a factory, and operated on factory-floor principles. 70% of the music was pre-manufactured - i.e. the Funk Brothers being the Funk Brothers. The other 30% came from whoever was singing in front of them. The songs seem more customized than they actually are because the vocalist and lyrics make each song seem distinct, but if one were to tune out those elements, that 70% would become readily apparent. What made it work was the fact that, while the music was essentially produced on a push-pull assembly line, the music was easy to dance to, the Funk Brothers were the best of the best, the lyrics were culturally "safe," and the vocalists were exceptional performers. The end result is that you never notice that you're getting the same five or six songs with different lyrics and a revolving cast of vocalists over and over again. Barry Gordy was, of course, a very smart man.

[@shariqspk]

Very impressive Mr. Ian, thanks for your efforts and style of presenting Dell's Push-Pull mixed approach.

[@carlosvence]

Oh man, these videos is pure gold! And sadly most of the people don't know that! Great Video!

[@abhishekkulkarni3840]

No pause while explaining , no hiccups , explanation is clear and crispy . Ian fires on all the cylinders . Full marks for the presentation skills .

[@Driveyoursuccess]

Hi James. Yes, you are right. Your semi-fixed BOM is exactly configure or made-to-order. However, your company controls the options provided to your market. Controlling the options allows you to control the costs.

[@Driveyoursuccess]

When I referred to a "markup" I was referring to the added cost that comes from selling through retailers. When you purchase a computer/laptop from a retailer, you are covering a number of additional costs. However, when you purchase directly from the company making the computer, then your pricing is lower. Dell essentially eliminates this "middle man - retailer" and sells to your directly. Lower cost to sell for Dell - better price for you as a customer.

[@claralucylopezcartagena5923]

thanks for your explanation. That was my doubt too!

[@bobichina]

Wonderful explanation with real world case study!

[@Driveyoursuccess]

Hi Perla. It depends upon the product, the market and the uniqueness of the product. Some products take months, some weeks, others days and yet some can be delivered same day. It depends entirely upon whether you're operating in a linear market with constant demand or a cyclical market with infrequent demand.

[@sanju0202able]

thank you soo much .. tomorrow is our operations management exam wish u were our lecturer.. thanks again..

[@Driveyoursuccess]

That's exactly how I would put it. In fact, I'd call it "assemble to order" but it wouldn't have the same recognition. Very good point.

[@Driveyoursuccess]

Honestly, it all comes back to marketing. What do your customers want? What options are essential to market entry, essential to market dominance or nothing more than "me-too" offerings? What option will be that all-important differentiating factor and how many customers would purchase if you did offer that option? Ultimately, the options are defined by the profit derived by offering those options - and those answers come from knowing how many customers would buy and how often.

[@Driveyoursuccess]

Hi Joshua, What do you mean by the "boundary"? Are you asking where the push and pull portion intersect and customer demand forces the company to push finished goods while pulling raw materials & semi-finished product? If so, then the link to the other video in the description should help: Dell Kan-Ban: Kan Ban Manufacturing System: Lean Principles

[@clemayk]

Thank you for an excellent explanation of a combination of push and pull system!

[@Driveyoursuccess]

Thank you very much Al. It's great to get some feedback.

[@querobot451]

Thank you for the sharing. The most qualified video for SC stratergies i found on youtube. will def follow.

[@lisaslavick7737]

thank you for this video...it was very helpful to me in understanding supply chain management specifically the push-pull strategy.

[@Driveyoursuccess]

Thank you very much for the feedback.

[@Driveyoursuccess]

Thank you very much Anuraag.

[@honghu5425]

Thank you very much on the strategy of supply chain. The video more clearly clarify important point.

[@Driveyoursuccess]

Hong Hu Thank you for your feedback

[@KaushikChoudhury]

I feel it is more like Assemble to Order manufacturing strategy, where the individual part and sub-assemblies are make to stock and final product is make to order.

[@alneri5626]

Great video, very clear and well explained, thanks for uploading.

[@Driveyoursuccess]

Thank you very much for your feedback

[@Driveyoursuccess]

Thank you Abhishek.

[@Driveyoursuccess]

Thank you very much. Let me know if you need any additional information.

[@Driveyoursuccess]

Yes and no. Dell's strategy is an order fulfillment and supply chain management strategy. At the end of the video when I show how to premanufacture 70% of the finished good and leave the remaining 30% to the customer's needs, then that portion can be considered "postponement" - delaying the final stage of manufacturing until a customer order is received.

[@Mary_AngelCR]

Love ur videos

[@jrt2007gjdje]

Thank you Ian for the video. Have a question: Does dell deploy 'full postponement' or 'logistic postponement' strategy (based on 'Pagh & Cooper (1998)'.

[@Driveyoursuccess]

I don't know. It's a good question. In terms of full postponement - no but possibly with logistic postponement as they don't move an inch before securing the demand.

[@alihassan5357]

Thank you very much, this video helped me in my assignment and in understanding more about supply chain

[@Driveyoursuccess]

Ali Hassan You are welcome Ali. Thank you for sharing.

[@sofiaavila8015]

thank you!! it helped a lot

[@Driveyoursuccess]

Thanks a bunch. Take care

[@edgarrodriguez340]

Very good information!

[@joshuadiamond9716]

very well explained, though will you be able to define where does the push pull boundary lie in this Supply chain?

[@mostafapazoki1684]

As I've heard and read from Dell company, it's currently involving in retail distribution. So, "market elimination" is what is being eliminated from Dell strategies. Besides, increasing the number of options makes it more difficult to implement push strategy for 70% with fixed BOM. Right? Thank you very much for this video.

[@Driveyoursuccess]

Dell's strategy is similar to a postponement supply chain strategy - holding off on completing the finished good until you receive a confirmed order. If you control the customizable options to the remaining 30%, then it should pose no problem. However, you are correct in the sense that the higher the options, the harder it is to control. Ultimately, it's a balancing act.

[@gl4730]

Thank u it's very helpful for me

[@croidefeu]

Hello Ian, Great presentation here! I just have a question; what is a markup? and in which way it is related to the direct sales strategy? Good continuation

[@Dataisthetruth]

The only way to successfully implement a JIT operation is to have strong relationships with your vendors, but you can't do that with all of them. I wonder do they only do this with key suppliers.

[@lzmw1405]

shouldn't the pull side takes up more than the push side for Dell's push-pull boundary? umm...

[@patricioprv]

Thanks for the info! Very usefull!

[@saeedbasabain4188]

thanks

[@Dataisthetruth]

Very interesting strategy. Seems as if it would be more complex to maintain an assemble to order operation with over 70% of their computers. How do they maintain such inventory? How do they know what to keep in stock? I am all for a more pull type system for the cost benefits that the customer receives, but to maintain such a complex operation seems challenging.

[@Dataisthetruth]

Oops 70% fixed 30% pull. The operation still seems complex.

[@Driveyoursuccess]

Hi Lu, Sorry it took so long to reply. Essentially, that ending where I mentioned the 70% fixed BOM and 30% semi-fixed as a pull strategy was something that small businesses could do to emulate Dell in some fashion. I don't say that's what Dell actually does - although, they likely borrow from some of that concept in the sense that they have a fixed BOM for some portions and a semi-fixed BOM for others - now, what percentage that is I have no idea.

[@KimiKimine]

Could you give an example of Innocent Smoothie 's Pull portion and push portion , please?

[@VampireGirl89]

so does it really take a month for an order to be shipped and delivered?

[@Driveyoursuccess]

Thank you. Contact me at any time

[@rushikeshkesh7787]

Is Push Pull of Dell and "postponement " the same ?

[@patrick1472]

Thanks!