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Technology Stocks : Dell Technologies Inc.

DELL 133.78

-0.1%

Nov 14 9:30 AM EST

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To: HDC who wrote (105431)	2/26/1999 4:25:00 PM
From: stockman_scott	Read Replies (3) of 176387

<<Dell has narrowed its vendor base by over half during the last couple of years or so. The vendors which were chosen make commitments to Dell regarding supply during times of shortages. They do this because of the huge potential growth they will experience having Dell as a customer.>> Duncan: You are right on target with your comments. The Harvard Case on DELL's virtual integration model is a bible to refer to over and over again (So is Michael's new book). In the chip arena, who is Intel's largest and most LOYAL customer? I am quite sure it is DELL. Who would be the most loyal to DELL when supplies of components start to become scarce? Michael in his new book (starting on pg. 177) talks about "keeping your relationships simple and close by." On page 179 he gets into a great discussion about how to "replace the traditional bid-buy process." Michael talks about working with suppliers and how DELL acts as an advocate for the customer and "one of the key attributes (DELL) looks for in suppliers is flexibility. Suppliers need to have a sprint capacity to work with us, and our demand can't represent a disproportionate amount of their total capacity. And they need to invest in themselves to keep up with us." DELL also uses web links to communicate regularly with suppliers and sets very explicit, data-based objectives. DELL is demanding but DELL is a great partner to grow with. I think Jock and few other investors may have over-reacted and not fully explored DELL's intimate relationships with key suppliers. IMHO, the DELL business model is intact and will only get stronger!! Regards, Scott

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