Introduction to Supply Chain Management System: Dell Computer Corporation

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Introduction to Supply Chain Management (SCM) System

Supply chain management (SCM) is the combination of activities which help a company to improve the methods to make a product or service and deliver it to customers. (Larson, 2004) SCM encompasses the planning and management of all activities involved in sourcing, procurement, conversion, and logistics management activities. More importantly, it includes coordination and collaboration with other people who are associated with the business like suppliers, intermediaries, third-party service providers, and customers.

SCM of Dell Computer Corporation

For studies purposes, the SCM System of Dell Computer Corporation could be categorized into following two periods:

Dell’s SCM
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(Strickland, 1999)

(iv) End user support system

Moreover, by directly dealing with the customer Dell got a clearer indication of market trends. This helped Dell to plan for the future besides better managing its supply chain. Another advantage Dell got by directly dealing with the customer was that it was able to get the customers’ requirements regarding the software to be loaded. By eliminating the need of a PC support engineer to load software, the customers gained both in time and cost. (Jhonson, 2013)

Dell’s SCM System from 2008-to date:

Over 2 decades of time Dell’s Configured to Order (CTO) business model did fine. However, over the period due to revolution in IT business, changing needs of the customers and strong competitive challenges in the PC market, Dell’s ability to grow revenue and deliver strong profitability was undermined. This forced Dell to review its business model and make it more competitive in line with the changed scenario in IT business. Following factors played crucial role in forcing Dell to revise its business strategy involving retail channels, pre-built PCs and smart selection methods for customers with new less time consuming Build to Order (BTO) strategy (Blanchard, 2012):

a. Market share loss by Dell in PC business;
b. 100% customization angle was no more

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