American Way Cover - 10/1/2001

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Dell | machine-to-machine communications

Micahel Dell Takes On The World

by Helen Bond

We were born out of this turmoil. We didn't have loads of funding when we started, and we didn't have the all-star start-up team. We had a high school graduate with $1,000. The company kind of grew up with change and agility and turmoil, and these destructive things right in the middle of its DNA. So it kind of thrives on that. If you change something at Dell, people say, "Oh great, that's good, something has changed." If you don't change things at Dell, people say, "Why don't you change it? What's the problem, there must be a problem."

AW: How do you see Dell continuing to take advantage of the Internet?
Dell:
The big focus right now is machine-to-machine communications, as opposed to screen-to-screen and person- to-person over the Internet. So let's say a company is buying computers from us standardized on Dell. The old way to do that is to call us on the phone, and we would come to see you with a purchase order, send things in the mail, by fax machines - all sorts of paper flying. We are glad to take orders that way - still will, we are not proud - send smoke signals or whatever. But our customers are telling us that if we can create an electronic link so that when they decide they need 10 or 50 computers for a particular department, that order immediately goes into our factory, then the customer doesn't have this paper shuffle going on.

Then, on the other side with our suppliers, it is kind of the same thing, but we have also been able to integrate the process. So today, we will sell something on the order of 70,000 computers. And whenever we sell a computer, a signal propagates through our system all the way back to our suppliers. Every single supplier knows exactly what materials they need to deliver to our factories so that order can be filled. That allows us to have essentially a pull-driven instead of a push-driven system. So you get out of this business of having inventory problems. You don't have any inventory - what you have is information, and information is a lot easier to manage than inventory.


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