Dell Desktop Supply Chain

Dell’s company strategy is to deliver a quality product to their customer and the company will not hold inventory. The orders come in through the internet and that is how purchasing orders the parts that are needed to supply the customers with orders. Because Dell wanted to be able to touch the world with their product the internet was their best way of achieving this. The internet gave Dell the ability to surge in their sales. With the surge in sales, Dell had to take the production of Dell products to other countries. To do this they had to do research to ensure that they could bridge the cultural differences and obtain the ability to open plants in major cities where the product could be sold saving cost in transportation to get the

Dell uses a just in time order fulfillment policy and accurate forecasting of sales to minimize inventories. This allowed Dell to hold inventory of finished products far below levels of their competitors (10-20% compared to 50-70% industry level) and furthermore allowed them to quickly implement changes to their product lines as new technologies became available. This quick inventory turnover also allowed Dell to retain more capital. Finally, this policy enabled Dell to respond immediately to technological progress in components and deliver state of the art new finished products (e.g. Pc’s holding the newest Pentium microprocessors) while competitors

Historically, Dell has been known as an industry leader in supply chain management. They have been credited with developing supply chain processes that have come to be recognized as some of the most innovative not only in their industry but throughout all business sectors. All of these accolades made Dell an unlikely choice since there didn’t appear to be much room for improvement, at least from a supply chain standpoint. However, over the past few

The advantages of Dells model are: The internet allows Dell an extensive scope and reach for its products at a relatively low price (Dedrick and Kraemer 2001). Using the internet Dell has been able to automate many of its business functions, such as product configuration, order entry and technical support (Dedrick & Kraemer 2001), therefore the company can achieve higher revenues without customer service costs increasing greatly. Online configuration ensures that the customer gets exactly what they want. Dells build to order strategy means that inventory levels are low, they only hold approximately 4-8 days of stock, therefore inventory costs are low (Breen 2004).

Supply-Chain Management is the activities that procure materials and services, and transform them into intermediate goods and final products and deliver them, through a distribution system (Heizer & Render, 2011, p. 452). DELL is a computer technology corporation that develops sells, repairs and supports, computers and computer related products. DELL has realized that supply chain is becoming more and more important for the success of today’s business world and they work accordingly to keep a competitive advantage in the market. This study will examine to what extent Dell has used supply chain management to gain and retain a competitive advantage in the computer market.

When Dell started its campaign to allow customers to configure and customize their computers according to their needs and budget Dell had serious issue regarding Inventory Management. Dell needed and Inventory which comprised of right computer parts at right time and right place. To manage this entire Dell

These procurement strategies enables Hudson Bay to lessen their lead times and make the company in a position to respond to market requirements on time and also advise the exact shipment destination to its suppliers. So that it can meet the consumer demands effectively (Choi, 2014).

The direct supply chain model that Dell has been using for many years to sell customized PC’s to customers via the internet has been very successful. Dell designed and structured the supply chain to provide customized computers in a quick manner and with a reasonable price. Customers can visit the Dell website and configure the PC they desired and see the cost options they selected. Once the order was finalized, Dell would then start the building of that customized computer to meet the customer’s selection and ship the finished product directly from the manufacturing

Having the low cost advantage Dell is able to expand the gap between cost and customer's willingness to pay. Therefore, they are able to satisfy their end-consumers, who are educated want product stability, high-end performance and low lifetime costs. They have served the US market and started to expand their market worldwide; in addition, they have

Barrett believes that Intel is a technology leader and that manufacturing improvements have accelerated since the exit from the DRAM business. He attributes this to improved engineering techniques, not advances in process equipment. He agrees with Chou that high volume manufacturing is not critical to success. This view is somewhat contradicted by selectively staying in the EPROM business – a high volume, commodity business. Upon further examination, however, his belief is that EPROMS are not critical because they provide advantages for learning, but because they provide a critical link between Intel and its competitive environment. Staying in a commodity business allows Intel to learn how to lower unit costs and to use this knowledge across all of its products.

For Dell, they created an extranet for suppliers. Suppliers could see all order information and Dell’s production schedule. They could feed this information into their own production system. And produce the computer for different orders.

Dell uses a push-pull strategy. It produces computers by using components after a customer order. Dell’s model is called a Direct model where suppliers deliver to Dell and Dell is directly in relationship with the customer without distributors and/or retailers. The customer is in the beginning (specific order) and at the end of the process. Suppliers are situated very close to the plant which results in a easy coordination. There are few suppliers and it saves money through shipping directly to customers. Next to specific components, Dell also uses some components through all orders. Each order consists of a motherboard for example.

4. What are the implications of your recommendation? How will it affect Dell as a company?

     Our recommendations allow Dell to enhance their supply chain management system, increase customer service, gain market share, and increase revenue.

One of the most important aspects to consider when comparing the current purchasing strategy with the proposed one is the impact of direct deliveries from external suppliers to the central warehouse on the lead times of spare parts which are ordered by the warehouse planners. Lead times have a big influence on inventory planning and replenishment policies and lead time savings can be very beneficial for the business of a warehouse and the performance of a SPSC (de Treville et al. 2004). Hiller and Liebermann (2001) regard unnecessarily long lead times as a form of waste and minimizing or avoiding waste as a key component of superior inventory management. In the current setting, three stages of the SPSC are involved in the purchasing