Question:
Write an essay about the “supply chain management”.
Supply chain management is a process that includes management of its supplies and flow of goods and services from the producers to the suppliers to the end user that is consumer. It is a process that describes the channeling of goods from being stored in store houses to undergoing a process production. It is a movement and storage of goods from point to point consumption (Fawcett et al., 2014). Online selling of goods is a new concept that is now accepted globally over the age of internet. Purchase of good has now become more convenient for customers. E-commerce is the electronic commerce where the transaction of goods and services between the sellers and the buyers through the online sources that is the internet. The online retailers are on rise. Retail involves the purchase and sell of goods and services to customers through various distribution and marketing channels. The retail demand and supply depends on the supply chain of the company. Sustainability can be defined as production and usage of goods and service at present without hampering the future generation. The report analyzes the business’s global logistics, supply chain channels and sustainability throughout the value chain all the way to the end user or the customers. The main aim of the report is to describe the strategic tangible assets of a firm, the value chain, and explain how to harmonize the value chain to achieve strategic outcomes (Fernie, & Sparks, 2014).
Dell Inc. is a private multinational computer technology company based in America. It headquarter is in Texas, United States and the company is involved in repairing, developing and selling computer and the other related products. The company was formed in the year 1984 by Michael Dell. Dell is one of the largest technological corporations that sells and develops many products such as personal computers, servers, data storage devices, software, cameras, printers and music players. The company is engaged in employing more than 103,300 people worldwide.
The company is well known for its innovation in supply chain management and electronic commerce. The company is also well known because of the integration of the concept of e-commerce in its process and operations. The online retailing of the company started in the year 1994 where the company was involved in selling products worth more than a million dollar per year. By 2000 the company was the largest seller of personal computers worldwide. The innovative idea of involving in online selling of the computers was the result of developing a business model that would allow the company to sell the computers even at the era without internet via mail. Another factor that contributed in motivating the company for launching Dell.com was the treat from its competitor Compaq. The company has expanded its online operations in other countries as well such as Europe and Asia. Its first retail store was launched in India. The company has expanded its retail branches to many other countries such as India, United States, Canada, Moscow, and United Kingdom. In the year 2015 the company was the third largest seller of computers after HP and Lenovo (“Dell – Official Site for Home & Business IT Solutions | Dell India”, 2016).
Logistics management also known as supply chain management is the flow of goods and services from the producers to the distributors to wholesalers, retailers and finally to consumers. . The main aim of the supply chain management is to distribute and produce the amount that is sold in the market without any inventory left. Supply chain involves three processes (Wisner et al., 2015). One is the product flow management where there is movement of goods from suppliers to customers. The next step is information flow management that involves transmitting orders and updating the status of delivery. The lat step is financial flow that consists of payments through credit system. The system of supply chain management is widely used in engineering industries, operations management, logistics and information technology (Waters & Rinsler, 2014). The main aim of supply chain management is to plan, map, perform, check, and control the supply chain actions with the purpose of synchronizing demand with supply to improve its presentation globally. There are two main types of supply chain software- execution and planning application (Stadtler, 2015).
Supply chain management is the used by the business house to provide an effective service to its customers by developing a sustainable business considering all the aspects from suppliers to customers. Supply chain management of Dell is known to be the best in the world. The company uses the direct model to manage its supply chain management and its linkages as it believes in directly dealing with customers. The supply chain management helped the company clear its stock of inventories. The companies use four steps to manage its supply chain skills. . It depends on assessing what’s going on in the business and then it designs the supply chain to match the requirements of customers. The company also enables the capability and tries to stabilize the situation in company to make sure it works (Govindan et al., 2015).
Dell believes in creating a unique supply chain in order to achieve its goals. It gathers large volume of information from its customers through its direct sales model. The supply chain management team in the company identifies logistics network by identifying current costs of the products in all countries, regions, service level and transportation. The information available to the company helps it to develop strategy keeping in mind the future opportunities. The company used supply chain management to gain competitive advantage from its competitors. The company believes in targeting the customers and its supply depends on the customer segmentation that is divides into three groups as large organizations, small and medium businesses and personal customers (Monczka et al., 2015). The supply chain of Dell is unique because of its in built strategy. This strategy involves the process where once the order is placed by customer all the configuration details are sent to the manufacturing department and the assembling department also starts assembling the PCs. Once the manufacturing is complete and all the software’s are downloaded it is shippers to the customers. The timely delivery of products to its customers as per the requirement makes the supply chain more effective (Richards, 2015).
The supply chain helps the company in reducing stocks and inventory as the company indulges in supplying those good only for which it has demand. It also helps the company in building a strong relationship with its customers. In some cases the customers even pay before the company supplies its products. The use of supply chain management is involved in all levels of market planning that is strategic, tactical and operational level. The company has followed an effective supply chain integration that involves use of minimum number of suppliers and effective communication. It also uses internet to bridge the gap between the promoter and the company. The company also has special set of analysts who are efficient in forecasting the demand of its product in the market. Value chain analysis plays an important role in determining demand and supply of the product (Coyle et al., 2012). Maintaining ethics is the top priority of the company and want its employees to follow all the rules of conduct that the company formulates. The company also ensures that it maintains an effective management process at all levels of logistics chain. The suppliers of the Dell product are required to be ethical and it believes employing employees from diverse workforce. The company did not believe in establishing middlemen and believes in directly dealing with customers. It started out as a direct seller from mail-order system and then taking advantages of the internet for selling its products online. The company’s online sell has increased due to the internet and establishments of retail shops worldwide (Fernie & Sparks, 2014).
Dells success story greatly depends on its innovation in supply chain management. Company believes in establishing direct relationship with its customers instead of engaging middlemen in its supply and distribution channel. The linkages are effective for the company as it depends on partnering with customers and suppliers and not over powering them. Dell was able to gain competitive advantage to it operation because it got rid with the entire traditional distribution channel and established a direct relationship with its customers (Epstein & Buhovac, 2014). It believed in adding and investing the capital to the activities that added value to the company. The formula known as direct business model helped the company decrease its stock of inventories and cost and helped the company increases the profit. The virtual integration concept introduced by dell has potential to achieve both coordination and focus. It involves strategies that are built on the basis of client focus, dealer partnerships, and group customization and just in time manufacturing (Holweg & Helo, 2014).
Sustainability refers to creating an environment that is healthy for the future generation without hampering the development of present generation. The main problem with the supply chain management is the issue of sustainability that affects the organizations logistics network. If a company wants to provide a sustainable product to its customers then it should ensure that the entire process of the value or supply chain management is sustainable (Czinkota et al., 2014). Sustainability includes maintaining the customer’s expectation and ability to manage the company’s environmental, social, ethical issues on life-cycle throughout the supply chain from manufacturers to the retailers. It also refers to social corporate responsibility. Dell believes in maintain sustainability throughout the entire process from manufacturing to distribution. It ensures that the suppliers that are engaged in the activities are ethical in their business code and follows the business laws and ethics. The supply chain management of the company is transparent in nature. The suppliers of Dell are required to present global reporting initiative annually that is based on the sustainability report (Mol, 2013).
The company is responsible for ethical business practices and believes in delivering high standards of behavior. It was the first company in technology industry to go green in the sense to establish the recycling concept in its process. The company employs employees from diverse workforce and respects the culture of each and every employee. It is one of the founder members of Electronic Industry Citizenship coalition code of conduct (EICC) that aims at improving the efficiency of the community by improving its social, environmental, political and ethical condition (Caplan, et al., 2016). The company has a list of requirements that the global suppliers engaged with industry must follow. The list is to ensure that the company supplies to its customers are sustainable in nature. Sustainability requires the manufacturers, distributers, wholesalers, retailers and even the customers to be ethical in their attitude. However with the introduction of online channeling and selling it is becoming difficult for the company to track the record of sustainability of its suppliers and retailers (Schaltegger & Burritt, 2014).
The sustainability report presented by the company includes various parameters such as focus on customers, innovation, managing supply chain activities, being transparent and accountable, and being ethical in nature. Achieving sustainability is the top priority for the company. The company uses the left over plastics used by the customers to manufacture new computers that help the company reduce the impact of its material sourcing and process on environment (“Forbes Welcome”, 2016).
Conclusion
Supply chain management is an operation that requires careful planning and management. Efficient supply chain helps in reducing stocks and inventories. The author in this report chooses to analyze the Dell Company because it is the most innovative online retail company in terms of its sustainable management approach. . The company also focuses on providing the sustainable good and services to its end uses. The main focus of the company is to ensure that its suppliers are efficient in following the rules and regulations set by the company. The company’s story of surviving the tough competition is inspiring. Its adoption of direct business model and value integration was the main key to success and helped the company built direct relationship with its customers.
References
Caplan, D., Dutta, S. K., & Lawson, R. A. (2016). Corporate Social Responsibility Initiatives Across the Value Chain. Journal of Corporate Accounting & Finance, 27(4), 57-66.
Coyle, J., Langley, C., Novack, R., & Gibson, B. (2012). Supply chain management: a logistics perspective. Cengage Learning.
Czinkota, M., Kaufmann, H. R., & Basile, G. (2014). The relationship between legitimacy, reputation, sustainability and branding for companies and their supply chains. Industrial Marketing Management, 43(1), 91-101.
Dell – Official Site for Home & Business IT Solutions | Dell India. (2016). Dell.co.in. Retrieved 19 June 2016,
Epstein, M. J., & Buhovac, A. R. (2014). Making sustainability work: Best practices in managing and measuring corporate social, environmental, and economic impacts. Berrett-Koehler Publishers.
Fawcett, S. E., Ellram, L. M., & Ogden, J. A. (2014). Supply chain management: from vision to implementation. London: Pearson.
Fernie, J., & Sparks, L. (2014). Logistics and retail management: emerging issues and new challenges in the retail supply chain. Kogan Page Publishers.
Forbes Welcome. (2016). Forbes.com. Retrieved 19 June 2016,
Govindan, K., Soleimani, H., & Kannan, D. (2015). Reverse logistics and closed-loop supply chain: A comprehensive review to explore the future.European Journal of Operational Research, 240(3), 603-626.
Hofstetter, J. S., Wolf, J., Klassen, R., & Shrivastava, P. (2013). Sustainability in Multinational Multi-Tier Supply Chains: Sustainable Supply Chains.
Holweg, M., & Helo, P. (2014). Defining value chain architectures: Linking strategic value creation to operational supply chain design. International Journal of Production Economics, 147, 230-238.
Mol, A. P. (2013). Transparency and value chain sustainability. Journal of Cleaner Production.
Monczka, R., Handfield, R., Giunipero, L., & Patterson, J. (2015).Purchasing and supply chain management. Cengage Learning.
Richards, M. (2015). Supply Chain Implications In Regards To Consumer Behavior In Online Retail: Site-To-Store Versus Direct Shipping (Doctoral dissertation, Texas Christian University Fort Worth, Texas).
Schaltegger, S., & Burritt, R. (2014). Measuring and managing sustainability performance of supply chains: Review and sustainability supply chain management framework. Supply Chain Management: an international journal,19(3), 232-241.
Stadtler, H. (2015). Supply chain management: An overview. In Supply Chain Management and Advanced Planning (pp. 3-28). Springer Berlin Heidelberg.
Waters, D., & Rinsler, S. (2014). Global logistics: New directions in supply chain management. Kogan Page Publishers.
Wisner, J., Tan, K. C., & Leong, G. (2015). Principles of supply chain management: a balanced approach. Cengage Learning.
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