To: Bill F. who wrote (144121 ) 10/8/1999 12:45:00 AM From: D.J.Smyth Read Replies (1) | Respond to
Bill, i'm sure you know the answer to this. it is my understanding that there are actually three levels of inventory. Dell's personal inventory is six days. contracts with suppliers, however, require they keep twenty or more days of inventory on hand in order to stay in the loop. much Taiwanese business is handled through third party wharehouses and buyers/sellers (not directly owned by the manufacturer). The manufacturer pays the warehouser's buyers/sellers to store products tagged at $X price for X quantity for X time. Even though the manufacturer was up and running again in six days and working double time to catch up, the warehouses, which were closer to the quake's center, experienced more damage. But, contrasting to the Compaq/HP picture, Dell has significant leverage, not because of it's name, per se, but because of its consistent communication and less hierarchical supply chain of command (so I'm told). the day of the quake, Dell was on the phone securing solid committments from BOTH the warehousers AND the manufacturers of X addtl. parts for $X price. Dell not only bought up its own inventory, but but some of compaq's and HPs as well - one simple reason - speed. Precisely because of Dell's particular model, Dell buyers have more leverage and immediate linkage to top brass who sign checks. HP and Compaq have put their buyers about three manager links away from top brass who sign checks, and, because of their retail model, haven't developed the same necessary linkage - they lost time; and in the Taiwan case, lost sales. Dell's contacts are with both the manufacturer, the warehouses, and the shippers.
