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Implementing Supply Routing Optimization in a Make-to-Order Manufacturing Network

42 Pages Posted: 7 Aug 2008  

John Foreman

Massachusetts Institute of Technology (MIT) - Operations Research Center

Jérémie Gallien

London Business School

Julie Alspaugh

Dell Inc.

Fernando Lopez

Dell Inc.

Rohit Bhatnagar

Nanyang Technological University

Chee-Chong Teo

Nanyang Technological University (NTU)

Charles Dubois

École Nationale Supérieure des Mines de Paris

Date Written: July 25, 2008

Abstract

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%.

Keywords: Dell, supply chain, make-to-order manufacturing

Suggested Citation

Foreman, John and Gallien, Jérémie and Alspaugh, Julie and Lopez, Fernando and Bhatnagar, Rohit and Teo, Chee-Chong and Dubois, Charles, Implementing Supply Routing Optimization in a Make-to-Order Manufacturing Network (July 25, 2008). MIT Sloan Research Paper No. 4708-08. Available at SSRN: https://ssrn.com/abstract=1210842 or http://dx.doi.org/10.2139/ssrn.1210842

John Foreman (Contact Author)

Massachusetts Institute of Technology (MIT) - Operations Research Center ( email )

77 Massachusetts Avenue
Bldg. E 40-149
Cambridge, MA 02139
United States

Jérémie Gallien

London Business School ( email )

Sussex Place
Regent's Park
London, London NW1 4SA
United Kingdom

HOME PAGE: http://faculty.london.edu/jgallien/

Julie Alspaugh

Dell Inc. ( email )

1 Dell Way
Round Rock, TX 78682
United States

Fernando Lopez

Dell Inc. ( email )

1 Dell Way
Round Rock, TX 78682
United States

Rohit Bhatnagar

Nanyang Technological University ( email )

S3 B2A 21 Nanyang Avenue
Singapore 639798
Singapore
65-67906235 (Phone)

Chee Chong Teo

Nanyang Technological University (NTU) ( email )

N1 01-A09 Nanyang Avenue
Singapore 639798
Singapore

Charles Dubois

École Nationale Supérieure des Mines de Paris ( email )

60, boulevard Saint Michel
75272 Paris cedex 06, 75006
France

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