The Supply Chain of Dell Company and the Production of Computers - Case Study Example

The Supply Chain of Dell Company and the production of Computers Introduction Supply Chain Management refers to the active management of the chain supply activities in order to not only maximizes the value of customers but also to attain a competitive advantage that is sustainable. Supply Chain Management thus depicts a conscious effort by firms in the supply chain to create and operate supply chains in the most efficient and effective ways. Indeed, activities in chain supply entails each and everything right from the development of the product, its sourcing, production, the related logistics and the information systems which are required in order to coordinate such activities. The aim of this research paper is thus to explain the Supply Chain network of the Dell Company, how it manages its suppliers based on the numbers, sizes, strategic planning, locations and negotiation power (Samson, 2012). The Dell Computers Ltd. is a company that was established by Michael Dell and it started its business through selling its numerous computer products with direct business model. The Dell Company was during that time known to be selective in its production in that it focussed on the products, which enhanced the relationship between the organization and its clients. During the 1990’s Dell Company was recognized for having revolutionized not only the computer industry but also the supply chain management through using the “Direct-to-consumer” business model. However, during the past several years, the Dell Company has been keen to transform or change its supply chain management into both a multichannel and segmented model having various policies aimed at serving clients, corporate clients, distributors and retailers as well. How the Dell Company manages its supply chain network including distributors, customers and Suppliers It has been ascertained that Dell is actually one of the few enterprises, which are greatly benefiting from the segmentation of the supply chain. This is through ensuring that it creates profitable one to one relationships between their suppliers, distributors and customers through the different supply chains. It is through this model that different distributors, suppliers and customers can be served using different processes of chain supplies, operational modes and policies. The major aim of using this model is to ensure that the best supply policies and processes are found to serve each particular customer, supplier or distributor at a given time, point, and ensure that company profitability and customer service are maximized. How the Dell Company manages its suppliers based on numbers, sizes, strategic planning, locations and negotiations power The Dell Company uses the Supplier Relationship management through focussing on the reduction of design, sourcing as well as the procurement costs and time. The use of SRM helps the company to achieve great benefits like for instance in the reduction of the product development costs, material costs, inventory costs and an increase in the assurance of supply. The Dell Company thus uses the i2 Supply chain management in both the planning and execution of solutions in order to maximize the velocity chain through optimizing supply, demand, service processes and fulfilment (Daft, 2009). The i2 SCM measures are vital in that they also result in an enhanced client loyalty and satisfaction, a differentiated response to clients, fewer shortages of stock, an increase in throughput as well as a better product mix, a reduction in obsolescence and inventory and also a reduction in transportation, return costs and warehousing. The company thus has also segmented its suppliers based on the numbers, sizes, negotiation power, locations and strategic planning in order to ensure that each distributor is handled effectively. How the Dell Company manages its distributors based on numbers, sizes, strategic planning, locations and negotiations power The Dell Company is known to partner only with a few suppliers in order to ensure that there is a speedy implementation of information that is relayed from the organization in supply chain that is virtual. The company’s orders are therefore created in a computing system, which is networked. Indeed, in relationship management, the level of trust with the distributors is quite vital. Furthermore, the Dell Company normally integrates its distributors so as to seem as if they are part and parcel of the company and also cooperates with such distributors in order to ensure that there is timely distribution of its products and services to different clients (Ravindran, 2012). How Dell’s Supply Chain reacts to the customer’s orders and satisfaction Due to the presence of an effective customer segmentation comprising of big consumers and the direct model, Dell Company has been able to predict the needs or requirements of its new clients and thus order goods, which are tailored towards such information. As a result, a fast inventory of velocity, which the Dell Company maintains with its suppliers, is vital in the provision of more speedy and flexible ordering of goods. Based on the founder of Dell Computers, it was asserted that a faster cycle of implementation comprising of big customers presents lesser managerial problems or complications, which the organization can be in a better position of tailoring programs towards the needs of the clients. This can be truly attested owing to the numerous products produced by the Dell Company with inventory being done or reviewed thirty times of more in a year. Based on Kano’s model, where value is regarded as being a vital component in the forecasting of demand, it normally becomes quite imperative for such organizations like Dell Company to pas lesser attention to the normal client activity cycle while also focussing on the needs of customers especially if the company does not only wish to satisfy the needs of their customers but also in making them to become delighted in the use of the company products as well. In fact, it can also be genuinely be asserted that the innovative characteristics that are unexpected by the clients do not actually lead to any form of dissatisfaction but however, if they are included, they will result into both delight and satisfaction of the customers. The right values used by the Dell Company include a premium service, low prices for their customers and also impeccable quality. It can also be concluded that indeed, the intangible costs are capable of decreasing the value. The Dell Company has been known to ensure that there is timely delivered of all its products to the big consumers using low effort. The big customers not only order the company’s products online but they are also capable of easily accessing a dedicated team of maintainers from third party sources. In addition to that, it can be ascertained that besides responding to and predicting the needs of its clients in time, the segmentation of the Dell Company’s clients into big yet fewer accounts or units help the organization to greatly minimize costs. Indeed, the company’s goal is to ensure that the needs of the clients in the present and future eras should be easily available in an approach that is well coordinated while designing the products (Richard, 2008). Whether the Dell Company uses either the Pull or Push based method for its production The Dell Company uses the Push strategy, which focuses on efficiency and responsiveness. As a result, Dell Company therefore seeks for operational efficiency and thus tries to minimize the costs across the organizational functional areas or even focuses on responsiveness while also trying to order fulfilment, ratchets up the speed and the service levels. The use of Pull strategy is owed to the fact that the company realized the highly responsive supply chain no longer fitted the needs or requirements of the company’s growing businesses. References Samson, D. (2012). Management. New York: Cengage Learning. Daft, R. (2009). Management. New York: Cengage Learning. Ravindran, A. (2012). Supply Chain Engineering: Models and Applications. New York: CRC Press. Richard, L. (2008). The New Era of Management. New York: Cengage Learning. Read More