Dell Direct Model & Virtual Integration The Dell Direct Model Dell's award-winning customer service, industry-leading growth and financial performance continue to differentiate the company from competitors. At the heart of that performance is Dell's unique direct-to-customer business model. "Direct" refers to the company's relationships with its customers, from home-PC users to the world's largest corporations. There are no retailers or other resellers adding unnecessary time and cost, or diminishing Dell's understanding of customer expectations. Why are computer-systems customers and investors increasingly turning to Dell and its unique direct model? Dell taking maximum benefits from various competitive strategies to counter act the competitive forces prevalent in the PC market. • Price for Performance. By eliminating resellers, retailers and other costly intermediary steps together with the industry's most efficient procurement, manufacturing and distribution process Dell offers its customers more powerful, more richly configured systems for the money than competitors. • Customization. Every Dell system is built to order. Customers get exactly, and only, what they want. • Service and Support. Dell uses knowledge gained from direct contact before and after the sale to provide award-winning, tailored customer service. • Latest Technology. Dell's efficient model means the latest relevant technology is introduced in its product lines much more quickly than through slow-moving indirect distribution channels. Inventory is turned over every 10 or fewer days, on average, keeping related costs low. • Superior Shareholder Value. During the last fiscal year, the value of Dell common stocks more than doubled. In 1996 and 1997, Dell was the top-performing stock among the Standard & Poor's 500 and NASDAQ 100, and represented the top-performing U.S. stock on the Dow Jones World Stock Index.

1. DELL
SUPPLY CHAIN OF DELL

2. DELL
COMPETETIVE STRATEGIES
Price for Performance
Customization
Service & Support
Latest Technology
Superior Shareholder Value

3. DELL
DIRECT MODEL
Virtual Integration
Relationship Marketing – C/S
Competitive Pricing
Best in class Service
JIT Operations

4. DELL
BUSINESS
Negligible Inventory ( 32D -
7D
JIT Delivery
SRM – 204 –to 47
Order to Delivery -1 and ½ Ds
Negative Cash Cycle

5. DELL
MARKET SEGMENTATION
Relationship Buyers
Transactional Buyers

6. DELL
MARKET SEGMENTATION - ADVANTAGES
Unique opportunities
Focused
Better Economies
Up & Cross Selling
Intelligent Forecast

7. DELL
VIRTUAL INTEGRATION - BENEFITS
Agility and Market Responsiveness
Ability to meet customers’ needs efficiently
Efficient Operations data transparency and data sharing
Integration of suppliers and customers in real time
No constraint of time and place
Elimination of Distribution Channel helps save time, money & efforts
Intelligent forecasting
Improved time to market
JIT procurement and manufacturing
Operations based on Pull model rather Push model
Reduction in transaction and cycle time

8. DELL
SUPPLY CHAIN DRIVERS
PRODUCTION – JIT / FAS / B2O / PULL
INVENTORY – VMI / JIT
LOCATION – Distribution centers have bigger coverage
TRANSPORTATION – Assembling centers close to customers
INFORMATION – Transparency in SUPPLY CHAIN Operations

9. DELL
COMPETENCE
High Performance Product Line
Relationship Marketing
Aggressive Pricing
Flexible and Efficient Manufacturing Operations
Excellent Service
UNDER PROMISE – OVER DELIVER

10. THANK YOU
CA VINOD KR SHARMA