Dell, last year’s overall winner of the European Supply Chain Excellence Awards, has become a byword for slick and effective supply chain operations, both upstream and down. But Nicky Hartery, Vice President, EMEA Manufacturing and Business Operations, EMEA, claims that given the will, most supply chains could emulate this global leader.
‘Supply chain is a global thing’ says Hartery. ‘You have to control it, but you don’t have to own all the elements. This means that information flows are equally or more critical than physical flows. Our secret is merely our ability to track and understand where a product is and if it is delayed, to move it on, so that the customer never experiences supply chain delays’.
Granted, Dell has the advantage of dealing directly with its customers so it has an intimate understanding of market nuances. As it is continuously linked to the vendor base, changes can be transmitted in hours, not weeks, reducing and minimising obsolescence. Equally, Dell is committed to ‘merging’ the various product elements – printers, keyboards, servers, monitors etc, as late as possible and away from the traditional warehouse. ‘Ideally’, says Hartery, ‘we would do this at the customer’s front door, although clearly that isn’t possible. In practice, everything is cross-docked. We review what we’ve got in our locations before we start building a system, so the components are already on the move to meet up as close to the customer as possible. This information flow, these signals, bring us closer to the customer, raise the velocity and lower the cost, and that is the way supply chains must go’.
One of the characteristics of ‘excellence’ is that you never reach it. Most firms now work extensively with their suppliers to secure continual improvement but Hartery says Dell is a little different because its emphasis is on business process improvement, rather than on individual products or events. Indeed ‘many of our vendors can meet five or six Sigma standards, so the product can stay in the container. We can crossdock without elaborate warehousing, and minimise the number of ‘touches’. Touches are expensive – not just in labour, but they are a source of loss, damage and error.
‘We are always looking at what processes add value – and if they don’t we get rid of them as soon as we can. Our supply chain re-engineering organisation is continually looking to re-form or reengineer the supply chain to give a better experience to customers, and a lot of that is through improving the information flow and the sending and receiving of signals so that we know exactly where the product is.
‘So we don’t see it as important to own everything in the supply chain. We control the material and information flows, we don’t own them’.
Can anyone play? Hartery says ‘There are opportunities for many companies to reduce inventory and achieve significantly higher velocity. They just have to recognise that inventory is bad.
‘On the customer facing side, some firms have greater opportunities than others. If you are serving a customer’s customer, clearly the direct model isn’t going to work so well. But if you are shipping direct, it will’.
Hartery compares Dell in some ways to the low cost airlines. ‘There are a lot of similarities – for example, over half our business is on line. In both cases the objective is to standardise, eliminate unvalued frills, and work a truly low-cost model – that’s the prerequisite for our success’.
Success clearly depends on finding people and partners that share the same outlook, but above all, says Hartery, it’s about doing relatively simple things really well. ‘We need to de-mystify the supply chain, make it simple, and get everyone to assume that it can happen, not find reasons why it won’t’.
- Nicky Hartery is Vice President of Manufacturing and Business Operations for Dell Europe, the Middle East and Africa. Prior to joining Dell, he was Executive Vice President at Eastman Kodak and previously held the position of President and CEO at Verbatim Corporation, based in the US.
- Hartery also serves as non-executive Director at CRH plc. He was a key member of the Irish Governmentinitiated Enterprise Strategy Group, who were tasked to advise on competitiveness and to set out a strategic business vision for Ireland for the period up to 2015.
- A native of Waterford, Hartery graduated in electrical engineering from University College, Cork and holds an MBA from University College, Galway. He is a chartered Engineer and Fellow of the Institute of Engineers of Ireland (C.Eng. F.I.E.I).