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How Dell became a ‘fast company’

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in Leaders & Managers,Workplace Communication

Eleven years ago, Dell Computers held 20 to 25 days’ worth of inventory in its warehouses. Now, it has no warehouses. In fact, as the just-in-time computer manufacturer assembles nearly 80,000 computers a day, Dell holds no more than two hours’ worth of inventory in its factories.

So, speed is critical.

“Speed is at the core of everything we do,” says Dick Hunter, Dell’s supply-chain director. “When a labor problem or an earthquake ... breaks out, we’ve got to react quicker than anyone else. There’s no other choice. We know these things are going to happen; we must move fast to fix them. We just can’t tolerate any kind of delay.”

Case in point: Two years ago, a labor lockout idled ports all along the West Coast, paralyzing global supply chains. But, because of around-the clock communication with its Asian suppliers and U.S. shippers, Dell had known for six months about the threat of a lockout. Hunter dispatched a “tiger team” that chartered 18 jumbo jets early, keeping costs down, and coordinated flights from Asia to America and back within 33 hours, keeping the supply chain moving.

Bottom line: Dell survived the10-day lockout with about 72 hours’ worth of inventory.

So, how did Dell get there? Why, because of its founder,  Michael Dell. Touring a plant recently, he saw how one line had raised its rate from 300 to 350 boxes an hour.

“Michael congratulated them, and there were high fives all around,”says Hunter. Then, Dell asked how they could get it to 400. “He’s pleased, but never satisfied.”

— Adapted from “Living in Dell Time,” Bill Breen, Fast Company.

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