Innovation Capability of the Company Dell - Case Study Example

? Supply chain management, innovation capability of the company Dell Table of Contents Introduction 3 Discussion 3 Conclusion 8 References 9 Introduction Dell is one of the leading US based Multinational Corporations headquartered in Texas. The organization was established by Michael Dell. He had a broad vision about technology designing and manufacturing. He invested 1,000 US dollar in the year 1985 in order to achieve his broader future goal. The first computer of Dell Inc. was launched in the year 1985 by Michael Dell. The organization achieved best system provider award due to its innovative printers and revolutionized desktops. The organization is continuously focusing on technological innovation. Attractive tablets and touch screen products has increased the brand preference. Recently, Dell is one of the leading brand names within the technology industry due to its effective product differentiation and supply chain process (Mentzer, 2004, p.112). This essay will focus on various supply chain strategies and processes of Dell. Discussion Delegated suppliers of Dell are the strongest assets of the organization. Effective and unique supply chain process is the major core competency of the organization. Dell focuses on two criteria during the selection of the suppliers. These are health and safety and management qualification. Effective contribution of diverse suppliers have supports the whole business process of Dell. Effective supply chain strategy and process helps the organization to meet market demand and customer satisfaction. A firm of suppliers need to have the dignity, respect and ethical standards (Mangan, Lalwani and Mentzer, 2004, p.112). Moreover, women owners, ethnic minorities, veterans and disable veterans are the effective parts of the supply chain management of Dell. Supply chain network of Dell consists of 6 key ingredients, such as sub-component manufacturer, component manufacturer, component assembler, wholesaler, retailer and final customer. The organization utilizes several sub-component manufacturers to establish the major component. These established components are provided to Dell. The organization has developed itself as large wholesaler in global market place. These completed components of Dell are then purchased by the wholesaler. Following to this, several global retailers purchase these products from their wholesalers to mitigate the market demand (Bozath, 2006, p.22). Finally, the end-potential customers avail the products from retailers to satisfy their own individual level of needs and desire. Dell follows a unique supply chain process. Suppliers and customers are two key parts in the supply chain process of Dell. The suppliers of Dell supply the products on appropriate demand in every two hours. Generally customers place order for the products through phone and internet (Li, 2007, p.51). All the manufacturing units or plants of Dell have unique internal storing system. Merging storing system is the key part of the supply chain of Dell. Effective logistics associates of Dell provide deliveries and services within the mentioned deadline. The organization focuses on highly qualified and capable suppliers as the major goal of the organization is to meet the satisfaction level of customer through effective customer service and significant technological innovation. Dell operates within the first movers industry. The suppliers of Dell always focus on innovation and effective supply chain processes. The organization tries to invest significantly in order to avail latest and developed materials to develop several innovative products like touch screen. Highly qualified suppliers are necessary for this reason. The unique suppliers help the organization to utilize unique source of product materials. Supply chain theory depends on two key aspects like supply chain management and internal functional co-ordination. Effective supply chain management helps the organization to monitor and manage the suppliers in a unique strategic manner. The employees of Dell take the major initiative to identify the best products and suppliers. The organization has developed several motivating reward programmes for the employees for discovering new innovations through products and suppliers. Dell Think Tank award is the most valuable and prestigious award among the employees of Dell. The Dell Fellows is another prestigious award as it is credited to the top competent innovators within the engineering community who consider customers along with global technology. Inventor of the Year is the most prestigious award among all. This award is credited in every year for most innovative ideas. Andy Sultenfuss has won this award in the year 2009 and 2012. He generated 50 innovative ideas that enhance the successful product invention and business operation. In terms of major characteristics of supply chain, the organization avails multiple training workshops on yearly basis. This workshop helps the global suppliers to share best operation practices. Recently, the organization’s supply chain management team is working on the Carbon Disclosure Projects. Major objective of this project is to disclose the appropriate information about organization’s carbon emission level. Recently, the organization is trying to reduce the level of carbon emission. The organization tries to invest in the resource management in order to improve the efficiency of supply chain network through their several review and monitoring sessions (Hackley, 2003, p.39). These sessions help the organization to identify the risks and performance gap. It helps them to develop effective relationship with the suppliers. Dell is considered as a leading component assembler. The organization focuses on the purchasing of components rather than developing them. The organization has mentioned in their company website that they purchase the components and products from the list of total 132 global suppliers. The organization has implemented transaction cost theory in their supply chain network to reduce the operational cost. This cost reduction strategy helps the organization to implement competitive pricing strategy (Slack, Brandon-Jones, Johnstone and Betts, 2012, p.67). This pricing strategy helps the organization to significantly target price conscious customers. The organization always tries to form and develop new ideas and search for appropriate suppliers to avail the effective resources. It helps them to assemble the components according to the market demand and needs of people. The organization works with several innovative global suppliers. The first tier suppliers of Dell consist of Wi-Fi Alliance, Free Standard Group, Blue-Ray Disc Founders and Internet Engineering Taskforce. First and foremost, Dell focuses on effective selection process of suppliers; in which the organization determines whether a supplier is appropriate for a job or not. The Supplier Procurement Department of Dell executes research work for the new suppliers. This Supplier Procurement Department send invitation proposal to the new selected suppliers. Dell provides effective value to the opinions and requests of their potential global suppliers. The organization encourages its suppliers through effective Supplier Registration Portal. After this step, management of the organization considers measurement criteria. In measurement criteria, the management evaluate the effectiveness and capabilities of the suppliers. The organization collaboratively works with the suppliers (Blahus, 2012, pp.11-13). Management of the organization shares business expertise and best practices in order to improve the competencies and capabilities of the suppliers. They have implemented innovative business operation strategy in order to reduce the threat of intense global competition. The organization understood that they cannot compete with the leading and potential competitors through low production cost strategy in several developed and developing countries. The major concern of the suppliers of Dell is diversity. The organization effectively focuses on the Product Innovation Process. They have implemented five steps in this product innovation process. First and foremost, The Dell Think Tank tries to identify potential opportunities through their sheer skill and innovations. This product innovation step helps management to develop second step, i.e. process. This step helps to develop actual product design. Product and service design is the third step in the product innovation process. Identifying new supplier is the fourth step that is initiated by the Supplier Procurement Department (Dell, 2013, p.1). Delivering products through unique logistics is the final step in the product innovation process of Dell. It is true that, global business environment is becoming highly competitive due to the presence of potential competitors and growing market demand. Several organizations are implementing new strategies in business process to achieve competitive advantages. However, effective customer service is the major business concern for all the organizations. It is important for all the organizations to maintain quality and several standards in the business process to meet the intense market demand. Dell is focusing on this parameter throughout all the business operation. Therefore, effective supply chain has become one of the important criteria. The organization needs to maintain it for better business performance and market growth. Conclusion Dell is one of the leading technological organizations in global market place. The organization is famous for its innovative products and customer services. It is clear from the above discussion that Dell focuses on effective supply chain process to provide innovative products and services. They select their global suppliers based on qualification and management background. The organization has incorporated several plans to maintain the efficiency of global supply chain network. Moreover, the organization has developed several departments within the organization in order to monitor and review the suppliers. The organization generally motivates the suppliers to maintain ethical standards and organizational value in the whole supply chain process. Continuous innovation and effectiveness of supply chain network increased the brand value of Dell in global business market. References Blahus, R., 2012. The Importance of Innovations for Czech Business Companies. Journal of Innovation & Business Best Practice, 6(2), pp.11-13. Bozarth, C., 2006. Introduction to Operations and Supply Chain Management. New Jersey: Pearson. Dell, 2013. Dell Services. [Online]. Available at: < http://www.dell.co.uk/>. [Accessed on August 12, 2013]. Hackley, C., 2003. Doing research projects in marketing, management and consumer research. London: Routledge. Li, L., 2007. Supply Chain Management. London: World Scientific. Mangan, J., Lalwani, C., and Butcher, T., 2009. Global Logistics and Supply Chain Management. New Jersey: John Wiley & Sons. Mentzer, J., 2004. Fundamentals of Supply Chain Management. London: Sage. Slack, N., Brandon-Jones, A., Johnston, R. and Betts, A., 2012. Operations and process management. 3rd ed. London: Prentice Hall/ Financial Times. Read More