Dell Inc. is one of largest computer companies in the world where since it was incorporated in the year 1994 it has continued to maintain its stand as one of the best technology companies. Dell main supplies include personal computers (PCs), computer peripherals, data storage devices, servers, network switches, MP3 players, cameras, HDTVs, software, and many other electronic gadgets and equipment (Schmidtberg & Leshuk, 2010). Currently, Dell is considered as number 1 shipper of PC in the world where the company has employed over 103,300 people all around the world. Over the past few decades, the change in technology has continued to occur where this has impacted a lot of changes in Dell supply chain management, especially in the millennial and/or digital age.
Dell supply chain management is considered as the main pillar of success in the company business model. The main element that is applied by Dell is its “direct sales mode” strategy. The idea of using this mode is to have the ability to bypass dealers in the market and by this dealing directly with customers (Spearman, 2011). Through this, the company has been able to continue with its customization aspect where customers are able to order specifications of the product. This strategy has continued to offer Dell a great competitive advantage over its competitors. The direct access to its customer information has also enabled the company to improve on its supply chain while forming a partnership with other large companies such as Sony.
Today customer and employee relation are one of the most important elements in every supply chain management. With this, Dell success has been largely contributed by basic features which have significantly helped the company to cope with the increasing competition in the market. These three elements comprise of Direct Sales Model, Build-To-Order, and Supplier Integration (Kiron, Kruschwitz, Haanaes, Reeves, & Goh, 2013).
Direct sale model has been a Dell custom which has been embraced over years and it has also gained popularity in its effectiveness to maintain a competitive advantage. Direct sale model is used as a platform to encourage the direct relation of the company with its customers. Customers are able to request straight orders to the company through the Dell website. Through the model application, the flow of information between Dell and its consumers is enhanced where the company enabled on the ability to measure the strength and weakness of its products and services. With this kind of data, Dell supply chain has been continuously improved in various aspects i.e. manufacturing, transportation, and other areas meant for improving its competitive advantage in the market. On the same note, Dell has upgraded its relationship development where it established virtual system integration which allows effective participation of customers, employees, and the entire company management in making important decisions in the company (Spearman, 2011).
Another important element of Dell supply chain management is “Build-to-Order” strategy. This strategy is used by the company as a more effective approach in the direct sale model. The company uses a build-to-order model only to provide the requested products and services (Dogan, Najmi, & Raman, 2010). One of the main benefits of this approach is the reduced cost of inventory. Through the various types of requests, Dell is able to acquire a high degree of inventories with less struggle of maintaining its innovative capability. By monitoring the incoming request, Dell is able to track demand changes and various types of defects which need to be replaced or corrected quickly.
Dell supplier integration refers to the relationship maintained by the company thus to also maintain effectiveness in its supply chain. The suppliers are considered to be significantly important in the company internal success. The selection of Dell suppliers is based upon the ability to deliver value-added gears which will help improve the performance measures of the company. The main objective of this strategy is to maximize the speed and also minimize its inventory. For example, if a consumer orders 15,000 PC’s which should be delivered in 2weeks, the company will be able to deliver quality products in 2 or 3 days (Kiron et al., 2013). Some of the key suppliers of Dell include Sony, Samsung, LG, Motorola, Microsoft, and other large tech companies. This approach helps Dell to avoid ‘Bullwhip Effect’ by sharing demand with its suppliers. The company has also established an open platform which can be reached by all respective suppliers in the approach of promoting continuous improvement in different stages of manufacturing (Ramachandran & Chen, 2012).
One of the features Dell has not been able to achieve in establishing itself as a world leader in the technology industry is the ability to integrate its direct shops all around the world. With the effective recommendation of this approach, Dell will be able to enlarge on its market share and its dominance in the market.
Generally, the manufacturing plants of Dell are redistributed by regions. The number of plants per region is determined by the size of the market which is estimated to be served. For example, North America is served by four major manufacturing plants which are Texas, Austin, Tennessee, and Nashville. The manufacturing process of Dell Inc. has majorly categorized in seven (7) different sections which follow in the order as follows; Customer order section, Kitting, Build, Software installation, Final Testing and Labeling, Boxing, and Shipping (Menninger, 2014). The first process in the transformation process is the customer order section where customers are able to order electronically. After a successful order application, the orders are monitored through software Factory Planner Maintenance Online from Dell orders management system, scheduling, to the final product. Kitting is the stage where all the required components in the manufacturing process are assembled. This involves all the major suppliers participating in effective completion of different manufacturing stages (Zafar, 2010).
The ‘build’ stage is the main point where customer orders specifications and designs are implemented. This stage is considered to be significantly important as meeting the consumer needs is number priority of the entire supply chain management. It at this point the quality of the machine life is traced through the installation of machine-readable barcodes. The following stage includes the installation of software’s which should be able to support and meet the consumer specifications (Autry, Goldsby, Bell, Moon, Munson, Watson, & Jayaraman, 2013). This stage also includes the improvement of the company software and drivers by updating with the current features in the market. After the installation of software’s and drivers, the final manufacturing stage includes testing and labeling. Customer order requirement is then crossed checked before packing and shipping the products. The feedback information of the delivered products is also significantly important where Dell has managed to emphasize their review thus to improve on its strategies (Dogan et al., 2010).
The issue of logistics in Dell is broadly distributed into inbound and outbound functions. The inbound logistics are largely handled by Dell suppliers who according to the company code of conduct are supposed to use dependable companies which can be able to deliver various products in safe and sound conditions. On the other hand, outbound logistics are handled by the company itself where it uses some of the most decorated companies (such as FedEx, DHL, SCHNEIDER, CEVA, SAIA, ODFL, and UPS) which can be relied upon effective delivery and required customer service satisfaction. Another important department in Dell makes process is the call centers (Kernodle, Davis, & Peck, 2011). The call centers are considered to be very important since it’s here where the company is able to access various orders and most importantly maintain customer relationships. The setup and distribution of the call centers are done in accordance with different customer segmentation and presence of various barriers such as language which needs to be attended.
Compared to the Dell competitors such as HP, Apple, Lenovo, Microsoft, and others, Dell has a very poor marketing strategy. Therefore, the company should re-evaluate its marketing approaches which should include rebranding the entire company image with an aim of selling out its product and increasing the awareness of the company supply chain strategy advantage (Sodhi & Tang, 2012).
Despite the significant success in its key supply chain approaches which are meant to boost the company innovation strategies, it’s significantly important for Dell to invest intensively in its R & D department. The department will be responsible for the continuous improvement strategies and the enhancement of product quality. A good example of R&D development focus for Dell should be the production of sustainable products which will be able to solve the increasing issues in the society such as energy saving (Gil, Gangopadhyay, Zhou, Gordon, & Nayak, 2011). Competition is another increasing issue in the technology industry where the level of entry in the market is very high. To maintain and enhance its position in the market, Dell Inc. should utilize its strategy in offering personalized service which will enhance the company market share and competitive advantage. One advantage that Dell has over its competitors is the ability to control and maintain customers (Gupta & Dhingra, 2012). Dell customers can be largely grouped as loyal customers whereas for the other companies such as HP and Lenovo can be easily persuaded to changing brand use. Through this platform, Dell has a chance in achieving market dominance and control.
Through the increasing effect in globalization and industrialization effect, the maintenance of supply chain functioning is considered as a vital task in the company management. Apart from benefits such as improved response in Dell supply chain, still the system has a lot of various weaknesses in its distribution network. For example, the system has failed to consider the fluctuating forces like political and economy which have a significant impact in the supply chain efficiency. In order to solve this issue and any future challenges on the same matter, Dell should be able to apply improvement models like the Six Sigma, Total Quality Management (TQM), ISO, and others (Chalamcharla & Kunte, 2012). The concern of system complexities should also be reviewed where in accordance with the changing market, customers are expected to visit easier with less complexity and enhanced efficiency. Also, retailers, wholesalers, and other intermediaries have a vital input in marketing aspects of any company and since Dell has stood on its point in eliminating these entities, it should be able to have a more stressed marketing strategy that will be able to capture the needed output.
Another topic that has gained increasing popularity by each day is the issue of climate and environment sustainability. As stated earlier, Dell should increase its R&D approaches in developing inventions which can improve the company operation. For example, Dell should design a sustainable logistic plan that will able to eliminate carbon emission and also reduce the amount of fuel consumed (Davis Jr & Doset Jr, 2010). The other important factor that must be achieved by Dell is the minimization of errors in its direct online ordering system. The system should be basically improved in the approach of enhancing customer experience where apart from the ability to confirm orders, the customer should be able to monitor the entire supply chain process and also have the ability to request and necessary changes in the system stages.
Conclusion
In summary, Dell is considered as one of the most successful companies in the technology industry and to be specific as a PC maker. Majorly the distribution of Dell manufacturing plants is characterized by various factors which are able to offer the company a competitive advantage against its competitors (Dvorak & Katari, 2010). The main element of the Dell supply chain is aimed at eliminating any form of middlemen in the supply chain system where the company has emphasized the maintenance of the effective relationship between consumers and its suppliers. The approach has been successfully applied by Dell where it has contributed significantly to the innovation process and the company capability in coping with the continuous changes in the industry (Gil et al., 2011).
Through effective communication integration, Dell has an incredible platform which can be used to improve the supply chain system. Unlike in the current strategy used by Dell, the company should focus on improving the R&D department where the coordination of inventory velocity should be also applied in supplier’s plants. In order to face the increasing competition, Dell should improvise on effective marketing strategies that will help to improve on company market control (Johnson, Li, Phan, Singer, & Trinh, 2012). With this in mind, I believe through the application of the above recommendations, Dell Inc. will be able to significantly improve its supply chain management and at the same time enhance its market value.
References
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