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Essay about Dell Erp

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How ERP implementation builds 's world famous Supply Chain: Virtual Integration: When ERP fits the Dell's Direct model: The introduction of enterprise resource planning (ERP) software improves the coordination between firms. Before ERP, the each function in value chain had separate organization with separate information system. Each function performed its own tasks thus not globally optimizing the whole value chain. ERP builds the "electronic nervous system" to links all units together and increases overall productivity. In some cases, firms found that they could eliminate most inventories by shifting to faster but more expensive transportation alternatives (e.g. air cargo) that replenished supply just in time. Simply put, ERP …show more content…

A further advantage to the Dell approach is the instant, current and continuous market research that it produces. In knowing exactly what individual customers want in a personal computer or computer network, Dell is able to anticipate market demand and shape the technological and competitive parameters of the computer industry. Dell argues that the direct model creates the most compressed PC supply chain by eliminating all intermediaries. Moreover, compared to a traditional supply chain structure, the direct model can reduce inventory investment by 50 to 70 per cent. The concept behind Dell's drive to reduce inventory inefficiencies "has nothing to do with stockpiling and everything to do with information". Due to its made-to-order approach, Dell is able to see on a daily basis if, for instance, customer preference is shifting to larger PC monitors. The company can also discern whether this is happening for certain customer segments or across the market. Dell immediately relays its assessment of this information to its suppliers, allowing them to adjust their inventory accordingly and rapidly meet demand. It stands to reason that the more information a company has about what a customer wants and how much he/she requires, the fewer inventories the company

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