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International Operational And Logistics (REPORT) - Assignment Example

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Executive Summary The report analyzes current operation and supply chain management of Dell Computers and based on that recommended an improvement proposal. The report in the first past discusses the business and supply chain model of Dell. Dell uses direct sale model which was different from indirect distribution channels used by rest of the industry…
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International Operational And Logistics (REPORT)
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International Operational And Logistics (REPORT)

Download file to see previous pages... In Dell, Suppliers are viewed as the integral part of operating business and a key variable for success. The last part of repot analyzes an improvement proposal that could possibly improve the logistics and supply chain of the company thereby enhancing its competitive advantage. The proposal focused on use of information technology in supply chain management of Dell through Oracle 10G and use of e-commerce in its supply chain management. Introduction Dell was incorporated in 1994 by Michael Dell while he was a student at University of Texas, Austin. From its very first initiatives, direct selling model was adopted. In the beginning PC’s were sold over the phone and they were customized according to customers’ specifications. Dell returned to its direct selling model after using the retail channel from 1990 to 1994. In mid 1990’s, the company grew rapidly, thus becoming number one PC seller in the US and number two worldwide in 1999. Dell’s success continued over the following years, but it was not able to avoid the crisis in PC industry in the new millennium. Dell’s growth rate fell, resulting in the fall of its stock price. However, over the time, Dell managed to remain a highly successful company, and its growth rate continued to outperform the industry as a whole. Dell’s strategic choices and ways of realizing those choices have played an effective role in story Dell’s success. The supply chain management of the company is the key element in its successful business model. The core element of the company’s business model is its direct sales model, referred as ‘direct mode’, with the build to order strategy. Current Operations and Supply Chain Business Model This differentiated model of dell help it creates a niche in the distribution channel and eliminates the entire mid channel members to arrive at cost leadership position in the industry. The basic principle of Resource based view is that the competitive advantage for any particular organization completely depends upon the resources which are available at any company’s disposal. It is a management tool to determine the important resources available for any organization. It is very important for success of the organization that these resources are valuable and are not imitable. The direct sales model refers to the fact that the company does not use any retail channels for selling its products, but sells its products directly to its customers through its corporate website, Dell.com. The above figure shows hot the direct model of Dell was different from the indirect distribution channel of the rest of industry. In its direct sale model, the intermediary steps that add cost and time are eliminated, and the company is directly able to link with its customers. Dell directly sells to all its customers, regardless of a home-PC to world’s largest corporations. The direct relationship with individual customer creates a great source of competitive advantage for Dell. This creates a valuable information about the end customers, and thus Dell knows who are the end users of their product, what they have purchased from the company, what are their future preferences, a fact that allows the company to stay closer to their customers by offering add-on products and services. Company distinguishes three customer segments, namely large organizations, ...Download file to see next pagesRead More
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