Dell's Ro Parra Speaks at Smith and Accepts Industry Day Award on Behalf of Dell

Ro Parra, Dell's senior vice president of Americas operations and a Smith School alumnus '82, accepted the 2005 "Person of the Year Award" from the Smith School's Logistics, Transportation and Supply Chain Management Society (LTSCM Society) and the Supply Chain Club (SCC) on October 27 on behalf of Dell in a ceremony at Van Munching Hall. The LTSCM Society and SCC traditionally present the annual award to an individual who has made outstanding contributions to the logistics, transportation and supply chain management industry. The 2005 award went to Dell in recognition of its corporate-wide contribution and the efforts of not a single person, but many to the field of global supply chain and logistics management.

Dell continues to represent the state-of-the-art for supply chain and logistics management resulting in optimal competitive advantage and high financial performance for the company, said William DeWitt, Tyser Teaching Fellow of logistics, transportation and supply chain management at the Robert H. Smith School of Business. On behalf of our very active student societies, I am pleased to announce Dell as the winner of the person of the year award, and without a doubt, as the worlds leading example of operational efficiency and speed in a direct-to-customer business model.

Supply chain management is a critical part of the process of successfully creating and selling products in the global economy, said Parra. Supply chain management is a core competency at Dell. We understand the importance of having educational programs, faculty and facilities such as those at the Smith School that actively promote supply chain management best practices and industry advances.

During his talk, Parra encouraged students to pursue a career in logistics and supply chain management saying that it is at the heart of what Dell does, and what he enjoys most about his job. "If we don't attract, retain and develop the best employees, we will struggle," said Parra. A company like Dell has access to a very diverse pool of applicants. Parra urged students develop a cultural sensitivity to other customs: focus on globalization, get an internship overseas, be a student of cultures, and learn a foreign language, he said.

Parra joined Dell 13 years (or "50 quarters" ago in Dell-speak, he said) and has seen Dell rise from a $1 billion company to approaching $50 billion, with a goal of $80 billion in the next three to four years. Dell is the only computer manufacturer to produce its computers in the U.S., and this month opened a new 750,000 sq. ft. facility in North Carolina, which will enable one-night delivery to 65 percent of Dell's customer base, said Parra. The cost of labor for producing one computer at Dell has gone from about $40-50 five years ago to $10 in the U.S., said Parra. Even though it only costs $1 for labor to produce a unit in China, the cost to get the computer to the U.S. customer is $25, he said.

"It is all about inbound and outbound logistics, it's constantly changing," said Parra. In the factory it's less about the product and more about the velocity. Dell used to produce about 300 units per line, per hour. Now they are producing 700-800 units per line, per hour. Parra said that increased volume has caused some unexpected problems; they had to redesign the conveyer belts, add in some ramps and walls so the boxes wouldn't fall off the line, and with the increased volume going into the trucks so quickly, the rollers broke and had to be replaced.

Last year 36.4 million packages were shipped, said Parra, up 44 percent over the previous year. It would be ideal to have the whole order-build-ship process take place in three hours, he said. He mentioned that last year, when Dell had two products on the popular Oprah's Favorite Things episode (Holiday Edition), the entire holiday supply for those items sold out in one day. "Three weeks later, we were ready for the re-run of the show, though," said Parra.

Parra also talked about Dell's fairly recent entry into the printer market, about two-and-a-half years ago. Their goal has been to change the behavior of the consumer with respect to the way that printer ink is purchased: don't buy ink when it's gone, keep a supply in reserve.

After his speech, Parra held a question and answer session with the audience and then stayed on to meet individually with students answering a variety of questions, stressing how important it is to keep a healthy balance between work and family.

The LTSCM Society provides networking and career development opportunities for Smith School undergraduate students, while the SCC provides networking and placement opportunities for the schools MBA students. Each year, the groups present the Person of the Year Award to an individual who has made outstanding contributions to the logistics, transportation and supply chain management industry. The award is presented as part of LTSCM Industry Day, which also includes a career fair. As many as 80 recruiters from more than 30 companies are expected to participate in this years event.

Previous Person of the Year honorees include Jeffrey Crowe, chairman of Landstar System Inc.; Linda Morgan, former chair of the Surface Transportation Board and the Interstate Commerce Commission; Michael J. Ward, chairman, president, and CEO of CSX Corp.; Don Schneider, president of Schneider National Inc.; Herb Johnson, past president of the Council of Logistics Management; and Edward Emmett, president of the National Industrial Transportation League.