Dell Inc. Case Essay Sample
Michael Dell started the company Dell Inc. in the twelvemonth 1984 with a mere $ 1000. Presently the company is considered to be one of the largest computer-systems companies in the universe. It is in fact considered to be the world’s largest company in footings of planetary market portion. Some of the major rivals of Dell are HP-Compaq. Toshiba. and Lenovo Group. Dell’s merchandise line includes “desktop computing machines. notebook computing machines. web waiters. workstations. and besides storage merchandises” and competes in the “concern. instruction. authorities and consumer markets“ ( Kapuscinski. Zhang. Carbonneau. Moore and Reeves. 2004. p. 1 ) .
While most of its rivals have similar supply concatenation direction systems. Dell does non follow the same system. The company follows a direct-sales attack. Michael Dell founded the company based on the construct of short-circuiting the retail merchants. jobbers and distributers in the supply concatenation ( Kapuscinski. Zhang. Carbonneau. Moore and Reeves. 2004. p. 1 ) . Dell has successfully implemented the construct and is alone among its rivals in this manner.
Only $13.90 / page
Dell’s fiscal success to a big extent is attributed to holding a really expeditiously managed supply concatenation which gives it an advantage in footings of monetary value and besides helps in cut downing the bringing times for its clients
This paper analyses the supply concatenation direction system of Dell in footings of scheme and design. These are so compared this with the supply concatenation scheme and design of some of its rivals. The pros and cons of following such a scheme are so highlighted along with the importance of information engineering in the successful execution of the supply concatenation.
“A supply concatenation is a planetary web of organisations that cooperate to better the flows of stuff and information between providers and clients at the lowest cost and highest velocity. with an aim of client satisfaction”( Govil and Proth. 2002. p. 7 )
Computer industry being an industry that advances at a really rapid rate. It is clear that in this instance it is really of import to ever do a really accurate estimation as to how long the pres3nt engineering would last and how to make the maximal figure of clients in this period of clip. Overstocking the stock list with points which would go disused in the close hereafter is a really existent possibility.
Some of the companies like HP and Toshiba attempt to remain abreast of the engineering and market their merchandises really sharply. They anticipate the life-time of their merchandise and usage complex estimations to accurately foretell the figure of units to be kept in the stock list. The extra goods in the stock list are so set up for sale at a lower cost when they become disused.
In contrast Dell believes in maintaining merely for 6 yearss. The stock list system is Just-in-Time and helps the company in cut downing the costs of warehousing engaging people to track and keep stock list and besides the losingss that could be incurred by keeping on to obsolete engineering based merchandises. The company sells straight to its clients which helps it in concentrating towards monetary value. public presentation customization. service and support. latest engineering and superior stockholder value. In add-on. the company besides distinguishes itself from its rivals really easy. by offering customized merchandises to its client ( Altman. 2004. p. 4. 6 )
As is already mentioned above Dell has a alone supply concatenation where it sells straight to the client. The clients place an order with the company and the company supplies the merchandises to its client within a pre-specified bringing clip. The clients can take assorted constellation constituents and therefore the merchandises received by them are customized to their demands. The advantages of direct-sales are already mentioned in the earlier subdivision. The supply concatenation of the company is really closely integrated by utilizing information engineering. Using package the company besides manages Customer Relationship Management by maintaining checks on the types of the computer-systems normally brought by the clients. The company besides manages their providers really expeditiously. Since they merely have a upper limit of six yearss of stock list with them they are propelled to function the clients more expeditiously due to the lesser attempts needed for the repositing. In add-on to all this. Dell besides makes strategic confederations with other companies for case with Palm and Xerox. who could utilize its supply concatenation for selling their ain merchandises ( Altman. 2004. p. 6. 7. 8 ) .
The supply ironss of the rivals of Dell such as HP contain all the constituents like retail merchants. jobbers and distributers. However. these units are really expeditiously managed for case incase of HP and integrated with engineering to do them more efficient. To expeditiously pull off its distributers for case. HP created a hebdomadal allotment system so that the merchandise units to be sold were reasonably distributed among its distributers. This besides maximized the overall merchandise handiness to its clients. HP has late surpassed Dell to go company with the largest market portion ( Harrison. Lee. Neale. 2003. p. 43 )
An expeditiously designed supply concatenation is necessary so that all the constituents interact in a proper manner. In instance of Dell the supply concatenation is designed to run into the specific demands of the clients. This means that the clients can take the necessary engineering for their merchandise. This in bend agencies that the company needs to be abreast with the latest and besides the most popular engineerings available. Any concern would non win if the venture is non profitable plenty. Hence. the supply concatenation must besides guarantee that the merchandises are optimized to give the maximal net income benefit to the company every bit good. Dell has designed its six twenty-four hours stock list system to accommodate this intent. The feedbacks from the gross revenues are hebdomadal and therefore the following hebdomad stock list can be predicted even in the worst instance scenario of engineering alteration. The web based selected system ensures that the complete scope can be easy browsed by the clients. and besides helps in analysing the purchasing forms. The fewer stock lists besides means that the company can easy accommodate itself to the new engineering since it would hold really less backlog to be concerned with which can once more be easy disposed off ( Altman. 2004. p. 19-23 ) .
In contrast HP has modeled its supply concatenation based on a class of action it footings as prosodies. theoretical accounts and cooperation. The prosodies and theoretical accounts are operations research methods and usage complex simulations non-linear stochastic mathematic scheduling methods which describe the complex dealingss between the providers. fabrication workss and clients. The theoretical account development helps to ease a clear apprehension of the forms of stock lists which in bend helps in effectual client direction ( Schniederjans. 1998. p. 83 ) .
Dell has some fabricating units and gross revenues units that are strategically placed in assorted states. These are really limited in figure and are strategically placed so that the merchandises reach the clients via the cheapest and the fastest path. The company on the contrary topographic points more accent on holding maximal figure of client support offices so that people can easy make them within the state with the least cost. The Global sourcing follows this rule as is late shown when Dell decided to shut down its India based unit so as to incorporate these units with the Taiwan and US based units ( Writer. 2007. para 1 ) .
In contrast the rivals of Dell like Toshiba. and HP have a really big and intricate supply concatenation and distribution web which is dispersed across many states. The thought is to hold the merchandise available at the nearest location so that the client can hold a expression at it and purchase it on the topographic point. Hence. the figure of units available with each of the retail units should besides be optimized ( Harrison. Lee. Neale. 2003. p. 43 ) .
In the present times. Information Technology is considered to be a really of import portion of any Global merchandise company. In instance of Dell the Information Technology is the anchor on which the corporation is built. The company’s website World Wide Web. dingle. com is a really of import portion of the supply concatenation as this is the first point of contact of the clients with the company. The effectual design of the web site and easy pilotage has been really important to doing a really effectual supply concatenation without the demand for any retail merchants ( Altman. 2004. p. 10 ) .
The company has farther enhanced its supply concatenation by utilizing thei2 Supply Chain Managementto be after the orders and communicate with the providers every two hours. This system helps Dell to fabricate what the clients precisely want. This besides helps in finding the cost for bringing and clip for deployment which helps the company in cut downing the costs for the clients. every bit good as the cost incurred by the company. The constituent providers can utilize this system to acquire accurate merchandise demands and stuff demands. The system besides helps in real-time mill programming and besides inventory direction. With the usage of thei2 Supply Chain Managementtool Dell can hold a new fabrication agenda every two hours which shows the latest client orders. backlog Numberss. stock position and provider committednesss ( Altman. 2004. p. 10. 11 ) .
Dell has besides linked its supply concatenation direction with client relationship direction and provider relationship direction. This system is known asDVCM i. e. Dynamic Value Chain Management.This helps the company to analyse issues such as sourcing. distribution. resource and capacity restraints. The full supply concatenation direction system is integrated utilizing the cyberspace which helps Dell in keeping contact with its clients and providers universe broad ( Altman. 2004. p. 10-12 ) .
While its rivals do non follow a complete IT-based merchandising system. IT is however and of import component of supply concatenation which integrates the company with its providers. retail merchants and distributers so that the merchandise units are distributed equally among them easing the overall system such that there is maximal merchandise coverage to the clients.
Dell has built an alone supply concatenation which is alone among its rivals. The system has made Dell the largest computer-seller in a small over a decennary period besides doing it one of the fastest turning company in the universe. The undermentioned graph shows the Personal computer industry company wise gross revenues figures.
Fig- 1 Personal computer Industry Worldwide gross revenues figures ( hypertext transfer protocol: //www. roughlydrafted. com/RD/RDM. Tech. Q1. 07/FFE4A8E2-9816-4344-9FB0-61BED246674C. hypertext markup language )
It is clear from the figure that Dell leads the market of the personal computing machines. However. it can non be said that this is the most effectual of all the supply concatenation methods followed by the Personal computer companies. Any company can remain in front in the market merely when its inventions match those of its distribution techniques. HP has seen a monolithic growing in its gross revenues due to the alterations it has done for streamlining its supply concatenation direction system. The company has taken attention to be in front in engineering and has besides been cutting down the disconnected parts of its merchandise gross revenues and traveling into the more incorporate merchandise section.
This paper discussed the supply concatenation direction strategy of Dell and compared it with its rivals. Dell has no uncertainty made history by utilizing its alone gross revenues theoretical accounts and had become the world’s largest company in footings of market portion. However. in recent clip the company is seen to be slower in accommodating to technological alterations. This has resulted in the company giving its top topographic point to HP in footings of personal computing machine gross revenues. Thus it is clear that the merchandise gross revenues do depend to a great extent on the manner the supply concatenation is managed but a company needs to be ever on the cutting border of engineering if it intends to keep its lead.
Schniederjans MJ ( 1998 ) .Operationss Management in a Global Context. Quorum/
Govil M. Proth JM ( 2002 ) .Supply Chain Design and Management: Strategic and
Tactical Positions. Academic Press. Florida
Harrison TP. Lee HL. Neale JJ ( 2003 ) .The Practice of Supply Chain Management:
Where Theory and Application Converge. Springer. Massachusetts
Altman J ( 2004 ) .Dell & A ; Supply Chain Management. Article accessed on 12Thursday
December 2007. hypertext transfer protocol: //web. syr. edu/~jnaltman/report. physician
Kapuscinski R. Zhang R. Carbonneau P. Moore R. Reeves B ( 2004 ) .Inventory Decisions
in Dell’s Supply Chain. Article accessed on 12ThursdayDecember 2007. hypertext transfer protocol: //www. tmi. umich. edu/dell. pdf
Ran D ( 2007 ) .Market Share Myth 2007. March 16 2007. Article accessed on 12Thursday
December 2007. hypertext transfer protocol: //www. roughlydrafted. com/RD/RDM. Tech. Q1. 07/FFE4A8E2-9816-4344-9FB0-61BED246674C. hypertext markup language
Staff Writer ( 2007 ) .Dell India Shuts Hardware R & A ; D Unit. 11ThursdayDecember 2007. Article
accessed on 12ThursdayDecember 2007. hypertext transfer protocol: //www. cbronline. com/article_news. asp? guid=84302AA9-FC18-47F7-A191-CB75B0B95D17