dell-global supply chain management.docx

8/10/2019 Dell-Global Supply Chain Management.docx

1/5

Global Supply Chain Management Case Study of Dell

Global Supply Chain Management Case Study of Dell

Introduction

Today, the requirement is to effectively manage the supply in order that it will

contribute to the quality of the products and services and for organisations to make

sense of the process. For e-businesses such as Dell, supply chain management

serves as a tool for securing a large market share. As the basis of providing superior

service, Dell should continuously obtain cost leadership, differentiation and focus on

specific niche in terms of procurement, distribution strategies and delivery strategies.This report will cover the concept of supply chain management and evaluates its role

as a value-added practice for Dell where the extent to which supply chain

management could contribute to the success of the company. It is the aim of this

discussion to learn about the internal processes at Dell taking into account the core

components of the supply chain management system.

Supply chain design and strategy

Important to e-business processes is the supply chain management (SCM) as atool

for securing a large market share. As the basis of providing superior service, through

e-business the organization should obtain cost leadership, differentiation and focus

on specific niche in terms of procurement, distribution strategies and delivery

strategies (Hugos, 2006). Nonetheless, the practice of each company varies with the

extent of how they perceived their supply chain to contribute to the quality of the

products and services and how they could make sense of the process. Dell

Computers, for example, is very particular with costing and delivery as well as

customer relationship whereby first value innovation is the priority.

Kraemer and Dedrick (2002) maintain that although the company only entered the electronic

industry in mid-1980s Dell is now considered a company that enables to serve and maximise

the capabilities of the personal computer industry. It is reasoned that the market potential is

the driving force behind Dells general location decisions, while costs and capabilities are the

driving forces behind the specific location of Dells activities". As such, though Dell generally

appears to be receptive to its business model, the company was enabled to serve those

markets by means of effective production capabilities and cost structuring.

Going back, innovation therefore requires the supply chain management to be resilient

especially in the area of customer service. According to Administration (2008), it would be

necessary for IT companies to increase service channels and integrated design of integratedcommunication structures, manage intertemporal evolvement of customer demand and


2/5

acquire adaptive learning of customer preference. Dell has eight identified customer

segments namely global accounts, large companies, midsize companies, federal

government, state and local government, education, small companies and consumers. So,

there is the need for Dell to reexamine the factors affecting the implementation of customer

relationship management at Dell within the e-business context.

Frederick Betz (2001) contends that that there are three strategic challenges for information

strategy and Dell is not an exception. These are: using the new electronic medium to its full

advantage, upgrading information capability and improving the flow of information in the

entirety of the business. Responding to these challenges means to position the business

component in the strategy in order to put focus on the application of the information system

to business purposes. It would be also necessary to implement the strategy within plans and

training to implement changes in information systems and business processes by which Dell

did. When the Internet emerged as a major business channel, Dell adopted its use to Dells

business model. Dell envisioned the Internet as an effective mode of direct sales to

customers.

Supply chain relationships

Direct selling to consumers is what sets Dell apart from its competitors, as it is only

the company which sells through catalogues before without the obstruction of in-

store inventories, separating bond between inventory and product selection. Dell

also had embraced online PC retailing making the company a leader in providing

customers requirements through configurator software; which allows customers to

select from an array of choice while also proving online technical support. As ICMR

(2007) puts it, Dell had developed elaborate and sophisticated decision-support

software to help its own technical staff troubleshoot problems and purports on

extending this richness back into its supply chain.

If there are words to describe the general strategy Dell have chosen it would be

optimised integration whereby the supply chain is integrated to meet and exceed

suppliers and customers expectations while not sacrificing quality and relationships.

Dell takes into account the collective performance in the creation, distribution and

support of an end-product (National Research Council, 2000, p. 27). True enough,Dell increased integration to boost the overall performance of the supply chain

through focusing and coordinating the relevant sources of the needs of the supply

chain. Dell benefits from this process as evident in increased functional and

procedural synergy, faster response to the industry and market changes and

increased competitiveness and profitability (National Research Council, 2000, pp.

27-33).

To proactively respond to the growing demands of the consumer database, Dell established

a complex web of relationship that seemed to be serving its purpose. As such, the key

strategy that Dell implemented is the consolidation of the three technical aspects. These

aspects are online sales, online support and infrastructure. Dell resorted to online selling


3/5


4/5

In sum, Dell has a global supply chain design that changes according to the

requirements of its immediate environment - the IT industry. Supply chain at Dell is

strategically positioned in way that core activities are prioritised in lieu with the

supply chain itself. Segmentation is critical within the supply chain as it lineates the

ongoing relationships one at a time. Supplier relationship is important also because it

is directly tied and complementing the customer relationships unique for Dell.

Technology is also a leading driver in the supply chain management of Dell as it

backed the whole process.

References

Administration (2008) Strategic Innovation: How Dell Redesigned the Value Chain.2 July. Retrieved on 18 December 2009, from

http://www.unitedbit.com/strategic-innovation-how-dell-redesigned-the-value-chain/.

Hugos, M. (2006). Essentials of Supply Chain Management. John Wiley and Sons.Inc.

ICMR Center for Management Research (2007) Dells Supply Chain ManagementPractices.http://www.icmrindia.org/casestudies/catalogue/Operations/OPER063.htm.

Kraemer, K. L. and Dedrick, J. (2002) Dell Computer: Organization of aGlobalProduction Network.Irvine, California: Center for Research on

Information Technology and Organizations.

Kramer, K. L. and Dedrick, J. (2001) Dell Computer: Using E-Commerce To Supportthe Virtual Company.Irvine, California: Center for Research on InformationTechnology and Organizations.

Lucas, H.C. (2002) Strategies for Electronic Commerce and the Internet. Cambridge,Massachusetts: MIT Press.

National Research Council (2000) Surviving Supply Chain Integration: Strategies forSmall Manufacturers.Washington, DC: National Academy Press.

Willcocks, L. Petherbridge, P. and Olson, N. A. (2002)Making IT Count: Strategy,Delivery and Infrastructure.Boston: Butterworth-Heinemann.


5/5

dell-global supply chain management.docx

Documents