A Case Study of Dell Supply Chain Management

Recognized as one of the leading computer manufacturers, Dell uses an astonishing supply chain through pull-to-order procurement and just-in-time inventory management. Their strategy is highly efficient and drives costs to a minimum while allowing for minimal lead times and production times of under 4 hours for each order as their suppliers maintain levels of inventory based on forecasts within Dell warehouses near Dell assembly

Reorders are placed at the time of review (T), and the safety stock that must be reordered is:

The shortage of chipset is not only due to manufacturer’s capacity constraints; it could be defects from manufacturing. Therefore, Dell wouldn’t want to just rely on supplier but to take control of the internal operational improvement to target cost saving model and maintaining manufacturing flexibility.

How has Dell used its direct sales and build-to-order model to develop an exceptional supply chain?

Fierce competition, fluctuating market demand and rising customer requirements has led to customers becoming more demanding with increased preferences (Zhang and Cheng, 2006). In, the 21 st century, participating largely in globalization has created significant opportunities, and at the same time, put pressure on the automotive industry manufacturers to enhance quality, improve styling, increase organizational efficiencies and drive innovative features into their products in an effort to attract customers and expand into new markets (BCC, 2005). This paper explores the concept of supply chain management with a case study of one of the greatest motor brands BMW. We will look at the supply chain strategy of the company and how successfully it

By grafting its system of custom direct sales onto the Internet infrastructure, Dell has transformed these activities, creating an innovative and efficient procurement, production, and distribution network. The innovative advance made by Dell in deploying Internet communication as the foundation of its production network, is a process innovation. Although to some extent, the Internet has enabled Dell to create a new product -- a PC custom-configured through Internet communication -- it is the process of organizing flows of materials and information within its network, from customer order to procurement, production and delivery, by means of Internet communication, that defines the innovation at the Firm. The case supports this notion by stating “While most other PCs were sold preconfigured and pre-assembled in retail stores, Dell offered superior customer choice in system configuration at a deeply discounted price, due to the cost-savings associated with cutting out the retail middleman. Additionally, an important side-benefit of the Internet-based direct sales model was that it generated a wealth of market data the company used to efficiently forecast demand trends and carry out effective segmentation strategies. This data drove the company’s product development efforts and allowed Dell to profit from information on the value drivers in each of its key customer

ABSTRACT-The purpose of this paper is to present a case study of any industry of india whether it is manufacturing, service, Health care and retailing industry and the Problems faced by these industry these days. This paper takes in account the technique of supply chain management. It has not been clear how do firms build a responsive supply chain in global manufacturing environments. Built upon a synthesis of the existing literature and relevant theories, this paper presents a research model that defines the drivers, strategy, and practices of a responsive supply chain and the performance outcomes. This paper is one of the rare empirical studies that identify key variables relevant to the implementation of a successful responsive supply chain. The effective implementation of a responsive supply chain requires a careful definition of a responsive supply chain strategy in terms of the product range, and the frequency and innovativeness of the product offerings. Firms also need to provide key implementation practices (i.e., sharing of information with customers, collaboration with suppliers, use of advanced manufacturing technology) to achieve pull production to achieve responsiveness to the market.

Supply Chain Management (SCM) has been defined by Supply Chain Management Institute to be “the management of relationships in the network of organizations, from end customers through original suppliers, using key cross-functional business processes to create value for customers and other stakeholders”(SCM-Institute, 2016).

The current supply chain used between Riordan’s China location and the local Chinese company is the responsive supply chain process. One of the features of a responsive supply chain is that companies use a build-to-order and mass customization process as a means to meet customer specification requirements. The local Chinese company is a make-to-stock operation and future demands for fans are forecasted based on previous three years sales. They use this method in hopes that previous sales history will repeat itself without any significant changes.

In the San Diego distribution center (DC) information flow example, dealers not being notified automatically of order status would be classified as

Dell has been quite a leader when it comes to manage its inventory and supply chain issues but it faced some challenges too while growing. In this case study two aspects of two Dell have been discussed which Dell faced while growing. The first challenge was Inventory Management while continuously meeting the demands and requirements of its customers and second challenge was how to maintain its customer relation.

Suppliers, manufacturers, sales people, and customers have their own, often incomplete, understanding of what real demand is. Each group has control over only a part of the supply chain, but each group can influence the entire chain by ordering too much or too little. Further, each group is influenced by decisions that others are making. This lack of coordination coupled with the ability to influence while being influenced by others leads to what Stanford’s Hau Lee refers to as the Bullwhip Effect.

The “bullwhip” effect was coined in by Proctor and Gamble (P&G) when the company experienced extensive demand amplification for their diaper products (Lee et .al, 1997). The bullwhip effect is a phenomenon in the supply chain whereby unpredictable elements introduced by human behaviour in the lower part of the chain becomes more pronounced the higher up the chain they move (Baugher, 2012). By synchronizing the supply chain the bullwhip effect can be eliminated. The bullwhip effect describes how inaccurate information, and a disconnection between production and real-time supply chain information result in loss of revenue bad customer service, high inventory levels and unrealised profits (Agarwal, 2009).

4. In a service supply chain, the (explicit) cost of information is higher than in a product

Although Dell is an extremely successful company, there are areas of improvement and enhancement that should be considered. After a thorough analysis of Dell¡¯s IT tools, business model, IT infrastructure and competitive advantage, we have developed seven key suggestions. By implementing these recommendations, Dell can keep its high ranking in the competitive computer industry by increasing customer satisfaction, competitive advantage and superior value chain, without changing its principal operations to achieve these goals.