Tuesday, January 28, 2014
How important are supply chain databases to efficient inventory management and supply chain optimization?
The management of efficient inventory management IT systems is essential to supply chain optimization, as was shown at Dell. The Dell supply chain management database systems handle very important business functions that support worldwide manufacturing supply chains, including the Dell inventory management model and delivery of computers, accessories and supplies. Unreliability and a lack of cost-efficiency in the Dell supply chain can cost thousands of dollars per minute in factory time.
When Dell was a smaller company, its IT group ran its supply chain database applications on large, expensive servers. As the company grew, servers lacking the necessary capacity had to be replaced with even larger, more powerful servers. The Dell supply chain database handles a huge amount of transactions and pieces of information. The inventory component manages more than 3 million inventory movements daily from stock rooms to factory floors across all Dell sites, along with the corresponding 3 million messages transmitted to different systems for reporting, analysis, and factory scheduling.
By 2005, many batch processes were taking a long time to be completed. The Oracle Database version was also outdated and unsupported. To continue using this system would have called for a large investment in upgrading these large, expensive servers. Dell decided to migrate to more cost-effective, standards-based PowerEdge servers running Oracle Real Application Clusters 10g. This helped enhance database performance and allowed for scalability for future growth.
By sharing a large database across multiple servers, Dell can easily utilize additional low-cost servers when necessary to handle increased workloads. Dell has implemented this type of system for operations at multiple locations around the world. The most significant time savings occurred in the data extraction for all material transactions, which dropped from almost 5 hours to just 35 minutes, an 88 percent improvement. The time for the entire end-of-quarter jobs processing also decreased from 31 hours to 23 hours.
Supply chain management databases are essential to Dell operations around the world. Factory operations and internal systems depend on these systems to provide real-time information about important business functions and inventory management. By moving the systems to Dell servers, significant additional spending on less efficient proprietary servers was avoided and enhanced performance was attained.
It makes one wonder….how can similarly efficient databases be used for optimization of the inventory management processes of other companies within and outside of the IT field?