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

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%.

• Type: Journal
• Year: 2010
• Where: MSOM
• Authors: John Foreman, Jérémie Gallien, Julie Alspaugh, Fernando Lopez, Rohit Bhatnagar, Chee Chong Teo, Charles Dubois
• Keywords: Dell’s Inventory Re-positioning, Inventory, MSOM 2010, On-hand Inventory