------------------------------------------------- Executive Summary As director of Supply Chain Systems, Teri Takai recommends implementing virtual integration strategies from companies like Dell to portions of Ford’s supply chain strategy. Although there are several key differences between the companies, the restructuring plans of Ford 2000 have set a viable foundation to implement Dell’s virtual integration strategy in inventory management, customer service and support and suppliers’ management. The redesign of the process must include design not only of the supply chain but also of fulfillment, forecasting, purchasing, and a variety of other functions that historically been considered independently within the Ford hierarchy. Teri …show more content…
Virtual Integration not only elevates Dell’s speed and efficiency in meeting customer’s needs, but also allows it to achieve market capitalization greater than Ford’s with fewer assets and lower revenues and profits. Dell applied virtual integration in four main areas: organizational simplification, inventory management, customer service and support, and suppliers’ management. Ford’s supply base is complex in nature when compared with the DELL supply base—many more layers and many more companies. This is one area that would be difficult to apply the same degree of virtual integration. Although there are several key differences between the companies, the restructuring initiatives of Ford 2000 have set a viable foundation to implement Dell’s virtual integration strategy in inventory management, customer service and support and suppliers’ management. In order to successfully implement the virtual integration, the problems existing in the current supply chain will be identified and addressed. ------------------------------------------------- Issues Identification After closely examining Dell’s “virtual integration”, Teri realizes the differences between Ford’s purchasing organization and that of Dell’s pose complications. The redesign of the process must
The following research paper is based on The Home Depot Company, one of the largest home improvement specialty retailers in the United States. In addition, the analysis also includes supporting feedback obtained through an interview session with the Home Depot’s Operations Manager, Jaime. Jaime has a bachelor’s degree in business administration and has been employed by the company for eleven years. He possesses the knowledge and skills that are necessary to administer the supply chain management process for the 605 W. Morrison Rd. location store. The Home Depot has utilized several IT technologies that have helped the company gain core competencies in supply chain management processes. They have adopted the Omni-Channel Supply
The most critical shifts in Dell’s contextual factors, including industry dynamics, trends, technology changes and shift of the competitive landscape are following: The industry has changed significantly over the last 20 years. The traditional business model in the PC industry was inside-out, supplying machines based on orders from distribution, resell and retail channels, thus following the indirect selling concept. Dell’s direct model was at this time a new, challenging concept, taking orders directly from the end-consumer, and thereby, eliminating the middleman, costs and time. This was the initial crucial shift away from the traditional schema, allowing Dell’s quick
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
QVC is a large multinational corporation operating in five countries. They offer customers a wide array of general merchandise. Their business model is based on utilizing technology to deliver quality products, fulfillment and customer service. QVC sells its merchandise on its own broadcast network, on the Internet, and through a few select self branded retail stores. QVC utilizes a decentralized order, fulfillment and distribution system that is interconnected via communication technology. QVC has a complex organizational structure This system poses several risks to QVC, largely centered on loss of the transportation system and disruptions in communication system. QVC could benefit from reducing its hubs and operating from smaller number of hubs, using a less centralized strategy. Upward supply chain integration may not be entirely possible for QVC, but upward in tradition to the greatest degree possible would help to reduce risk and improve operational efficiency by reducing transportation costs.
The Dell Direct Model was ingenious. Michael Dell took a simple concept, selling direct to the consumer (Appendix. 1), and built a business model that, quite simply, outclassed his competitors. By selling to the customer direct, eliminating the traditional dealer channel and using a just-in-time (JIT) production procedure, Dell has created unparalleled efficiencies
The automobile manufactures belief that expansion of a company in increase in the global competitive market explains that the firm is likely to face competitive environment. Many companies are forced to develop their supply chain according to the decision by reducing their manufacturing expenditure and improvement of the products. JLRs decision to build a new plant in the North America to serve the customers is taken for customer satisfaction and values and to avoid all the barriers between the ultimate customers and the suppliers. For a positive supply chain, many decisions involving to the flow of product and information are required. Efficiency of the work done is very much essential in any company. To increase the efficiency of the company the best key is to connect with the suppliers online by sharing the future plans and decisions of the company. This kind of sharing will help the company in considering the proper data and information of the demand or requirement of the company. E-Collaboration with the suppliers gives great benefits to the company. Technologies such as inventory planning, online analytical processing and enterprise resource planning help in collaborating with the suppliers in a best possible way. The inventory planning helps in forecasting the demand of the products or services in the market. The online analytical processing gives a detail note of the past performances from various suppliers which can help in the current efficiency. And the
Dell argues that the direct model and virtual integration is beneficial to the customer from distribution to
In 2002 congress considered legislation authorizing $47 million to help develop supply chain integration standards. Since the introduction of the bill to integrate supply chains, The legislation, The Enterprise Integration Act of 2002, was enacted to authorize the National Institute of Standard and Technology to work with major manufacturing industries on an initiative of standards development and implementation for electronic enterprise integration (H.R. 2733 (107th): Enterprise Integration Act of 2002). According to the case background readings setting supply chain standard will improve supply chain management. In this paper I will discuss how setting supply chain
Essay 1 : Introduction to Dell 3 Parts - Look at the Business Model in Particular (Is it fit for purpose?) – Then the Ecosystem – The Modularization and mention licensing Look the Paradigm of Dell Conclusion
Third, Dell has a rapid-response system for linking all suppliers, workers, managers, and customers to Dell’s value chain. This interactive real time communication system is employed to order parts, manufacture and outsource computer modules, and coordinate assembly and distribution of products to customers. Managers employ this system for all human resource functions, workers and suppliers for all coordination sequencing and quality control processes,
Dell hold and maintain its business model on integrating five key strategies: rapid time to volume, products built to order, elimination of reseller markups, superior service and support, and low inventory and capital investment.1 They designed project and the resulting tools to support Dell’s low-inventory and low-capital-investment strategy and to widen its impact further than the plant floor into the foregoing stage of its supply chain. Tom Meredith, at the time chief financial officer, said in the May 18, 1999 earnings conference call: “Customers see no advantage in a manufacturer low-ering inventory to six days if there are still 90 days in the supply
The business model of dell which concentrates on a built to order framework where the middleman is removed and PCs are sold directly to the end buyer
The initiative of both processes serves different purposes such as to reduce risk, transfer of vital information and interdependencies on external organization in supply chain. The decision on which integration model to implement depends on the cost, product type, organizational size, scope and organizational structure. Businesses that want to achieve great
Supply chain management has gradually been accepted by strategy makers in corporations all over the world, who are keep trying to make corporations more competitive through supply chain management. During this process, information system means a lot, which determines whether the supply chain can work well. Success of DELL is mainly determined by the quick response supply chain system, using an efficiency information system. Especially in this informative period, information acquiring ability means everything. Details on DELL supply chain managing through information system are also stated here.
Leveraging partners: Dell signals its suppliers about the customer demand, the projected market shifts and sourcing strategies and in return expects the suppliers to share information regarding new technology drivers and capacity outlooks. With the help of information systems, it pools data on demand and supply trends. It also