Case Study Of Dell's Supply Chain Strategy

Supply Chain Management: An International Journal, Volume 7, Number 5, 2002, pp. 271 – 282;

The shortage of chipset is not only due to manufacturer’s capacity constraints; it could be defects from manufacturing. Therefore, Dell wouldn’t want to just rely on supplier but to take control of the internal operational improvement to target cost saving model and maintaining manufacturing flexibility.

Supply chain management is a practice that involves the planning, supervision, and implementation of strategies and controls to direct the movement of goods and services provided to customers. The intent of this essay is to incorporate a synopsis of existing literature and to provide the reader with a general understanding of how supply chain management correlates with the organizational design and structure of modern firms. The essay comprehensively reviews the components of supply chain management and their integration with functional areas within an organization. The information presented in this essay

In 2007, Dell decided to change the supply chain strategy to support the use of retailers for selling a standard configuration computer for customers. Customers could visit their local Wal-Mart or if in China, the local GOME retail store to pick from the standard computer models available (Chopra, 2012, Pg. 6). The changes Dell made to support the retailer to end customer model helps increase the revenues and provides a low cost solution at retail points of sale. Dell utilizes the retailer’s distribution and retail store facilities which keeps the costs low for Dell and also sees lower outbound transportation costs compared to the online supply chain model (Chopra, 2012, Pg. 21).

Supply management is a complex function that’s critical to business success, responsible for delivering efficient costs, high quality, fast delivery and continuous innovation throughout companies’ entire supply chains. The strategic contribution of supply management is measured not only in savings made, but also in increased shareholder value (Niezen, Weller & Deringer, 2007). Nike and Adidas are two global companies try to improve their competitive advantage through strategically managing and utilizing their supply chain. The purpose of this report is to compare and evaluate the supply chain management practices of Nike & Adidas.

In spite of Dell’s Direct Model strategy, the company had lost any price advantage it had over its competitors. Dell also had an issue with channel inventory availability driven by the fact that their competitors were attempting to replicate their strategy. This was a large threat to the organization because they so heavily relied on just-in-time delivery of parts. Dell’s competitors faced many challenges to the direct distribution method, however. According to Exhibit 8 in the case (“Ratings of PC Vendors by Corporate Mangers with PC-buying Responsibility”), channel based support was rated the lowest on all scales, showing that this was Dell’s riskiest area as well.

Design approach – The paper is based on an exhaustive study of eight supply chains which included ten companies in America. Managers from at least four levels of the supply chain were interviewed, and the supply chains were outlined and observed.

The confluence of these factors changed what it took to win in the technology space. Vertically integrated players of the past were replaced with engineering-savvy, asset-light marketing and design companies.3 As such, both large and small technology companies had the opportunity to bring products to market through the use of sub-contracting. By the late 1990s, consumers not only had more product choices but also multiple channels to buy from, including online stores, which were becoming popular. Within the world of technology products, the supply chain systems for the wide-ranging product types were not uniform. For example, the more complex large systems, such as telecom base stations, had a different supply chain model from the smaller consumer electronics products, such as personal MP3 players and laptop computers. This case focuses on the small consumer electronics supply chain, whose characteristics included having many component suppliers, with assembly sites doing the final assembly and testing. The modular structure of technology products meant that the brand owners had to manage a large network of suppliers. To stay competitive, large and small technology companies began to outsource a significant part of their supply chain to third party vendors in order to focus their resources on brand differentiating activities, such as product design and

To what extent has Dell used supply chain management to gain and retain a competitive advantage in the computer market? Corporate

But demand for commoditized products, changes in customer channel preferences, emerging market growth, component cost declines, a more capable supply base and globalization have challenged the singular supply chain. In this case study, Gartner examines Dell 's period of transformative change as it segmented customer requirements to create a portfolio of supply chain capabilities that provided multiple offerings focused on cost efficiency, speed to customers, choice of features and personalization and/or services. We follow the journey from the perspective of key leaders within Dell 's supply chain transformation: Annette Clayton, VP of global operations and supply chain; Jennifer Loveland, disruptive strategy senior manager; Perry Noakes, director of global business excellence and lean; and Bruce Raven, global supply chain optimization senior manager.

Walmart’s supply chain management has proved to be very effective, which has led the company to success. This case study analyzes the company’s strengths and weaknesses, and factors in what threats they face, as well as what opportunities that they can exploit.

This paper will enumerate a brief background of Dell, customer Focus Company that has maximized its value chain for the profitability of the company. This paper will analyze the unique value chain of the company. Furthermore, the paper will evaluate how Dell has used its direct sales and build-to-order model to develop an exceptional supply chain. The main advantages and disadvantages of Dell’s direct sales model will also be analyzed. Also noted is how Dell competes with other retailers that already have stocks in house and how Dell’s supply chain deals with the bullwhip effect. Finally an inferred conclusion is made about the company’s value chain and its role in the company financial status in the market.

This essay will focus predominantly on Dell Compter Inc and how it uses customer data to drive the manufacturing of its products. Discussion on how Dell uses technology to make business decisions is presented. The current model of distribution is investigated and finally recommendations will be made in terms of overall improvement to the current operating model.

As it does with in-customer operations, the Web opens both new channel opportunities and new dimensions of customer service. However, this newly created channel must maintain the fit between a company 's account set and its business model. All too many companies lose sight of this critical factor as they indiscriminately pursue incremental revenues. Dell 's direct-to-customer channel strategy certainly is a breakthrough in the industry. In the early stages of a technology product 's lifecycle, distributors are important for supporting new adopters. Dell has discerned a lucrative set of high-end customers that were ready for direct distribution with arm 's length customer support from help lines. An innovative direct channel strategy gave Dell these crucial elements of its powerful business model: Ø Real-time customer feedback and market insights Ø The ability to "sell what you have"--that is, using day-to-day pricing and sales incentives to shift demand toward products that are currently makable Ø Extremely crisp product life cycle transitions Ø Elimination of the obsolete and excess dealer stock that plagues the non-direct competitors Ø The ability to control pricing on a real-time basis. The capabilities were rooted in each company 's core business processes, many of which focused on supply management. The new supply chain masters consolidated their supplier bases in

Although Dell is an extremely successful company, there are areas of improvement and enhancement that should be considered. After a thorough analysis of Dell¡¯s IT tools, business model, IT infrastructure and competitive advantage, we have developed seven key suggestions. By implementing these recommendations, Dell can keep its high ranking in the competitive computer industry by increasing customer satisfaction, competitive advantage and superior value chain, without changing its principal operations to achieve these goals.