Dell's Supply Chain Management

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Dell’s Supply Chain Management The term supply chain management (SCM) was initially used in wholesaling and retailing to denote the integration of logistics and physical distribution functions with the goal of reducing delivery lead times. Manufacturers and service providers have used the same term to describe integration and partnership efforts with first- and second- tier suppliers to reduce cost and improve quality and delivery timing. Terms such as integrated purchasing strategy, integrated logistics, supplier integration, value chain management, supply base management, strategic supplier alliances, lean production, Just-In-Time (JIT) logistics, and supply chain synchronization have been used in the literature to…show more content…
The pulse of Dell 's execution effort centers on increasing business velocity and eliminating waste. Dell employees are constantly focused on driving down backlogs, promoting best practices, and creating synergies among adjacent processes as seen in cross-functional initiatives such as the design-for-manufacturability effort between manufacturing and R&D. This initiative successfully promoted product designs that are easier to assemble.

In 1994, Dell was a struggling second-tier PC maker. Like many others, the company ordered its components in advance and manufactured to inventory. Then Dell began to implement a new business model. It converted its operations to a build-to-order process, eliminated its inventories through a just-in-time system, and sold its products directly to consumers.

Dell carefully targeted corporate relationship customers that had predictable, budgeted needs and that wanted a pre-determined set of product models. The company also selected individual customers who were high-end, repeat purchasers with a preference for early technology adoption. Both account segments had the stable, predictable purchase patterns that Dell needed to make its joint build-product-to-order/buy-component-to-plan system work.

In connection with this, Dell developed a set of new operations capabilities in five crucial areas (2005). First, it created the flawless make-to-order system that has been widely

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