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lean business

Dell takes on India

Someday a business historian will compile the seven wonders of the modern economy, and at the top of that list will most likely sit Dell’s Morton L. Topfer Manufacturing Center. Located on the outskirts of Austin, Texas, the 300,000 square-foot center–called the TMC by its workers–is the core of the computer giant’s just-in-time (JIT) manufacturing miracle, producing 700 computers an hour.

But the TMC is only one link in Dell’s revolutionary supply chain. Strategies such as direct-to-consumer sales, bare-bones inventory, reverse cash conversion (which pays suppliers after, rather than before, receiving payment from customers), and a requirement that suppliers retain possession of parts until the last possible minute have enabled Dell to build a super-lean business model that has upended high-tech manufacturing much in the same way Wal-Mart changed retail.

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