Life as a

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Life as a Buyer
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Outline

• life of a buyer
• a purchasing manager of Dell
• Dell and Michael Dell
• sourcing components and finished goods for
  manufacturing
• a purchasing manager of a discount store
• sourcing goods to sell
• a fashion buyer
• sourcing clothes to sell

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Dell and Michael Dell
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Background

• development of the semi-conductor industry and
  the computer industry
• early days
• 1950s mainframe ? big, heavy, expensive
• 60s to 80s minicomputer
• to suit the demand of a mid-range company
• gradually outdated by the development of PC
  (microcomputers)
• 80s onwards microcomputer (PC)

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Background

• commodizatoin of microprocessors in Early 70s
• early 70s Intel 8008 8-bit processor (1972)
  Intel 8080 sold US360 (1974) Intel 8086 (1978)
• development of PC
• needs of small business and home computers
• 1975 Micro Instrumentation Telemetry Systems
  MITS Altair 8800
• Basic interpreter in Altair (Paul Allen and Bill
  Gates)
• 1976 Apple I by Steve Wozniak and Steve Jobs
• 1977 Apple II by Apple and Commodore PET by
  Commodore
• 1977 Spreadsheet VisiCalc and word processor
  Wordstar
• 1981 IBM PC, open architecture MS-DOS by
  Microsoft, the standard operating sysetm of
  IBM-compatible PCs
• 1985 Windows operating system

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Selling Computers in Early 80s

• selling through retailer chains
• traditional make-to-stock mode in multi-echelon
  supply chains
• manufacturers
• forecast demand, e.g., quarterly
• produce various models in large quantity
• forecast and production in rolling-horizon
  fashion

manufacturer
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Selling Computers in Early 80s

• drawbacks of the traditional selling model
• intermediary
• eats up margin
• does not really understand computers
• shields customer demands and market information
  from manufacturers
• mis-match of demand and needs
• holding inventory
• easy obsolete products in a fast evolving market

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Dell Inc. and Michael Dell

• selling direct without any intermediary
• 83 assembling computers in his dorm room
• customized IBM compatible computers
• marketing practically by word of mouth
• 84 formed Dell
• orders through mail, phone, and (later fax)
  customized IBM compatible PC
• operations assembly, software installation,
  testing, quality control, and repairing
• revenue US 6 million

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Dell Inc.

• 85 launched Dells first DC Turbo PC revenue
  US 40 million
• 86 fastest 286-based PC
• 88 went public, though inexperience leading to
  tight cash flow and unsold inventory
• 89 too many computer chips, and plan to develop
  server dropped
• 90/91 also indirect sales
• 91 launching first notebook
• 92 encountering technical difficulty, especially
  in the notebook market

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Dell Inc.

• 93
• canceling a series notebook development
• top five computer companies in the world
• the first quarter loss ever since
• 94 loss US 36 million Lithium-ion battery
  notebook
• 95 rebounded, with profit US 149 million
• 96 Dell.com, selling through web
• 98 Xiamen, China
• 99 number 1 in PC (the third in 2012, after HP
  and Lenovo)
• 02 other products
• ..

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A Purchasing Manager of Dell
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Life of Mr.??? in Dell (1)000 (2) 315-605
800-830 (3) 800-0930

• life before Dell
• early life in Dell
• one-man band, installing software, handing
  correspondence, etc.
• sourcing, quotation, sample mailing, etc.
• company in progress
• office rental and personnel recruitment
• selecting outsourcing partners
• tour guide in site visits for overseas colleagues

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Life of Mr. ??? in Dell

• general work
• organizer of internal and external social
  functions
• screen, maintain, and manage, and develop
  suppliers
• partner with suppliers and their quality
  engineers on product development
• contract negotiation with suppliers
• especially on disputes, e.g., Inventec
  Corporation(???)?Compal(??)?Acer Inc.
  (??)?Twinhead International Corp (?? ) on money
  spent on design, mould, and parts when Dell
  cancelled orders
• market analysis and industry analysis
• on new products, new orders, competitors
• on problems in markets
• ensuring operations matching company goals and
  objectives
• select regional distribution centers and sourcing
  regional headquarters

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Qualities of Mr.???

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A Purchasing Manager for a Discount Store
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Purchasing for a Channel
2nd 000055 to 0017

• identification of market trend, both short and
  long term
• interviewing suppliers to screen and negotiating
  with suppliers to develop products
• judge quality, value and market potential of
  products
• marketing activities of suppliers
• match with position of company
• product assortment
• types, brands, and prices of products
• maximization of revenue and profit
• balance profit and sales quota when necessary
• consistency with company policy and objective
• inventory planning

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Purchasing for a Channel

• material to be filled in

4th 000343 to 000710
4th 0012 to 002227
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A Fashion Buyer
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Life of a Fashion Buyer

• fast fashion
• Next plc

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Life of a Fashion Buyer

• generally responsible for a specific type of
  customers and of products, though affected by the
  size of a company
• small company more variety, less involvement in
  design and technical issues
• large company more hierarchical, and finer
  division of products
• travel to trade shows and to meet suppliers and
  designers
• qualities versatile and flexible, from paperwork
  to communication, from technical to artistic
  issues
• requirements experience, qualification,
  enthusiasm, and self-motivation

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Life of a Fashion Buyer

• relationship with suppliers
• need good working relationship
• negotiate prices and delivery dates
• predict customer response, production cost,
  profit margin, etc.
• interactions with
• merchandiser more strategic level issues such as
  assortment and budget of rate, set targets on
  time, margins, etc., and follow progress
• design design ideas, consistency within and
  across ranges
• quality control buyer more on aesthetic issues
  and QC on technical issues
• fabric technologist sourcing the developing
  fabrics
• marketing and sales

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