Implementing Supply Routing Optimization in a Make-to-Order Manufacturing Network
Massachusetts Institute of Technology (MIT) - Operations Research Center
London Business School
Nanyang Technological University
Nanyang Technological University (NTU)
École Nationale Supérieure des Mines de Paris
July 25, 2008
MIT Sloan Research Paper No. 4708-08
Dell's supply chain for desktops involves Asian vendors shipping components by sea to several U.S. plants. While suppliers are responsible for shipping enough inventory, Dell can re-route and expedite their shipments while in transit and also transfer on-hand inventory in order to balance supply across sites. This paper describes the development, implementation and impact of the process and optimization-based control system now used by Dell to address this supply routing challenge for its US-bound monitors. This new methodology is estimated to have reduced Dell's inventory re-positioning costs for monitors by about 60%.
Number of Pages in PDF File: 42
Keywords: Dell, supply chain, make-to-order manufacturing
Date posted: August 7, 2008
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