re your Dell still has to maintain inventory of the components.. mother board, power supply, ram, graphics, etc. wouldn't it?
Denise,
No, and that is the beauty of it! CPQ is currently experiencing problem with excess inventory (of machines) in the channel. DELL's entire inventory (of components) is what is sitting in the vans parked at the loading docks. DELL has no inventory of finished machines, because they are shipped as soon as the order is filled; in the case of a large order, as soon as a portion of that order is finished. My understanding (someone correct me if I'm wrong) is that the components do not belong to DELL until they arrive at the unloading dock. That is when they enter DELL's inventory and are paid for. Four to eight hours later, when the truck on the other side of the construction bay departs, they leave DELL's inventory, and DELL receives payment.
That is why, when a supplier, say INTEL cuts prices on a current chip by $150, changes its pricing DELL can realize the savings or pass them on to the customer within hours or days. That is also the reason that DELL does not face the situation where machines, the component prices of which cost (example) $1000 2 months ago but which could now be built with the same or better components for $700, are sitting on the shelves with a price tag of $900.
That's one reason I'm DELLish, 3. |
