Operations Management: Dell's Supply Chain Management - Essay Example

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Report Operations Management: Dell's Supply Chain Management Customer inserts his/her name Customer inserts Table of Contents Executive Summary 3 Introduction 4 Issues 4 Literature Review 4-6 Solutions and Recommendations 6-7 References Appendices Executive Summary The paper puts forth a critical discussion regarding the supply chain management practices at Dell…
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Operations Management: Dells Supply Chain Management
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Download file to see previous pages The direct model introduced by the company has its pros and cons both. However, as the paper discusses, this model has lost its competitive edge in recent years simply because it has been replicated by major competitors such as HP and Acer and today it’s not a novelty to have made to order PCs the way it was few years ago. Because its supply chain system is so dependent on the reliability and commitment of its suppliers, a breakdown at one stage of the company’s supply chain can create havoc in the entire supply chain stream. The suppliers, too, feel pressurized to come up to Dell’s standards simply because there’s nothing such as long term supplier partnerships in Dell. The moment a supplier underperforms, he/she is removed from the list of suppliers which is rather demotivating for the suppliers. However, for Dell, this is just another way of doing business and keep thriving as a low-cost, high quality PC provider. The company also faced issues for reasons external to its own operations; for instance, the recall of Sony batteries. Furthermore, the company has always had to reach a compromise between its business to business market and its consumer market as traditionally the company has always focused on the latter. ...
It is the suppliers who deliver the product that the company promises and any mismatch between the two can lead to potential loss of goodwill. Thus, Dell’s supply chain has been an area related to its core competencies and as the paper discusses, the ultimate solutions offered by Dell have been related to changes in its supply chain and policies that enable the company to retain its competitive edge in its business model, which has become a challenge specially when competitors such as HP have replicated it. Introduction Dell, a renowned PC (Personal Computer) manufacturer is a hallmark of efficient, closed-loop, supply chain management. The company was the first to introduce the “Direct Model” whereby the role of intermediaries (retailers and distributors) in the downstream supply chain was eliminated (Ferugson & Davis, 2007). The company provides low-cost, customized PCs that are ordered either online or via the telephone (Ferugson & Davis, 2007). The reason why the company provides low-cost PCs is because the company’s own cost is significantly reduced by the elimination of intermediaries, plus, the company could accurately predict demand and the nature of demand thus eliminating costs arising from failure to do so. A combination of all this has enabled the company to achieve a strategic competitive advantage. However, in 2006, Dell faced problems when customers complained of long lags in deliveries (Appendix 1). The following section discusses key issues faced by Dell at that time. Key Issues Increasing customer complaints were a product of several issues. The recall of Sony battery cells used in laptops created unfavorable image of Dell (Knowledge@Wharton, 2007). As a result, Dell’s market share reduced ...Download file to see next pagesRead More
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