Table of Contents
Dell Way to Supply Chain Management
of Companies has spent a decade reconstructing their core business process for
efficiency. The objective has been to straighten out the kinks in supply
chain-from suppliers through incoming logistics through work-in-progress
through outbound logistics and customer fulfillment (Hamel, 2002). In this
parlance Dell has been remarkable in its integration of Supply Chain. From an
outside view, Dell computer delivery process appears both short and slick.
defined by Mentzer (2001) Supply Chain Management is systematic, strategic
coordination of the traditional business functions within a particular company
and across business with supply chain, for the purposes of improving the
long-term performance of the individual companies and the supply chain as
whole. For a better understanding Supply chain can be defined in layman terms
as something which encompasses all activities connected with the flow of
materials, services and information through processing of product/ services
facilities to end customer.
context Dell adaptation to changing time for the need of SC has been quite
noticeable and it is one such company among very few to sustain it without any
“The Dell Way to Supply Chain
title is in the form of a statement. The research proposal intends to have
in-depth study into how Dell deals with its supply chain process and
Integration. It deals with the challenges and opportunities that the Dell will
have to deal with the components of Supply chain and the growing trends in the
industry. The special reference to concepts and fundamentals has been given to
supply chain and its implementation to tame the broadness of the topic. The
identification of key words becomes necessary which are:
technical terms Supply chain can be termed as a set of three or more companies
directly linked by one or more upstream or downstream flow of products,
services, finances, and information from a source to a customer. Mentzer
(2001). Figure below explains a typical conceptual model of supply chain in
Computer is a leader in the e-commerce computer hardware market. It is an established brand that leads
personal computer manufacturers both in U.S. sales and overall online sales. Its trademark method of selling products to
customers, corporate and individual consumers, emanates from the Dell Direct
model, a Web-enabled infrastructure that allows customers to customize their
PCs and order other products they need or desire. This virtual integration structure eliminates
the need to manufacture everything, and instead uses the power of the Internet
to share and exchange information with suppliers and vendors to build a truly
superior supply chain that keeps inventory turnover low and costs to a minimum.
the biggest changes in business operate today is how companies view their
supply chains- not in a sequential location-by-location fashion, but instead
holistically, to better understand events occurring both inside and outside
their four walls. This in turn is spawning a much greater emphasis on
collaboration and supply chain process integration.
deals with this dilemma of changing needs so amazingly that companies despite
of understanding Dell’s business model very well; can’t execute it as well as
Dell does. One of Dell’s hallmarks is the ability to execute: the corporate will to do (Holzner,
choosing this topic rests highly on what is that – that sets DELL apart rolling
successfully since decades. Here I will do in-depth study about how Dell views
SCM and its operatability in its organization.
term Supply Chain Management has risen to prominence over the past ten years
(Cooper et al, 1997). In the same context La Londe (1998) reflects positions at
43 companies that carry “supply chain” in their titles. All in all Supply chain
Management has become such a hot topic that it is difficult to pick up a
periodical without a mention of SCM or SCM related topic in it.
the manifold reasons for the popularity of SCM concept, Mentzer (2001)
identifies the 3 major drivers’ responsible fro effervescent growth of the
- Global presence of businesses is highly
responsible to motivate corporation to look for out-of-box solution for
effective ways to coordinate flow into and out of the company
- Time and Quality are standalone assets that sell
in present structure of neck-to- neck competition in any type of
product/service market. Faster delivery on exact time with no defect and damage
is a sure way to success.
- Rapidly changing technology and economic
conditions creates high level of ‘uncertainty’ for businesses. Thus flexibility
on the part of individual companies and distribution channel is aptly required
which in turns demands more flexibility in channel relationship.
factors are enough to compel the scholars and companies for laying out the
research in SCM and as a result quite much has been written about concept and
challenges of SCM.
despite all detailed attention there remains a sort of confusion and lack of
camaraderie to what makes really constitutes a successful SCM . Some defines it
in operational terms, others view it as a management philosophy and yet others
view it in terms of Management process (La Londa, 1998)
companies in this global era placidly understands the importance and
significance of maintaining the efficient supply chain yet successful Supply
Chain network is very challenging to maintain and many factors can influence
success. Management often talks at large about supply chain strategies to
cope-up with dynamic trends and expectations of market. Most often they get
carried away more in strategizing that operational level process involved in
supply chain tends to get ignored resulting into unexpected inefficiencies in
the entire system. Hence it becomes quite important for SC management staff to
have at least broad overview of different supply chain processes and components
(such as demand driven Supply Chains, Actionable Visibility, Collaborative
decision making, Competing on responsiveness, subscription of on-demand
software etc) that can help them mould their strategy in accordance to changing
Holzner (2005) in his book, “How Dell
does it?”, has vividly outlined the
cornerstone of Dell SCM and overall
strategy that sets it apart from other in line.
(Source: Dell website)
director of Worldwide Procurement IT, Dell realates availability of Dell supply chain systems paramount to keeping factories running. . . . any downtime costs
us thousands of dollars per minute. Figure
above outlines the How dell does it. (Source: dell website).
Another book that will be encompassed in
this research will be Vollman’s, “Manufacturing Planning and Control Systems
for Supply Chain Management”. Vollman (2004) has covered the embodiment of Lean
manufacturing in Dell’s Supply Chain. He states this system behind set of
tools/techniques as embodiment of strategy that focuses on dramatically
improving the marketplace response while substantially achieving a major
improvement in cost structure. Further
he discuss the Dell 11 day inventory system which is well quoted by Michael
Dell as “If I have 11 days of inventory and my competitor has 80, and Intel
Comes out with a new chip, I am going to be in the market 69 days sooner.”
on the above discussion it can be deduced that the SCM is the chore component
to determine companies’ success and Dell has done it well big time. This raises
some important research questions:
- What determines the successful supply chain
management model vis-à-vis visibility,
action, management, authority, technical equipment etc?
- What are the changes that are required in
orthodox model of SCM existing so far?
- What are the Dell ways to deal with the Global presence
- Can Dell still do better by reconstructing its
- Satisfaction level of Dell customers
substantial amount of work has already been done in this area it is necessary
for us to analyze the whole area of research from the very deep study into the
topic. The questions are chosen in a way that they are more explanatory than to
be descriptive. The questions roughly cover all that the research topic intends
of the research questions selected one can try to construct the critical
analysis by setting and achieving the following aims for the proposed research
- To learn about various supply chain models as
proposed by various scholars
- To review the background of DELL as a computer
- To study the SCM model adopted by Dell viz warehouse, inventories, operations,
- To evaluate the measures it has taken to
innovate its SCM (such as environment initiative, EICC)
research proposal aims to do an extensive study on the importance of Supply
chain Management and the challenges that the industry is facing in this
context. The research proposal has both qualitative and quantitative topics to
be addressed. As pointed by (Schmied, 1993) qualitative research is a precursor
of quantitative research. Qualitative methods will involve the qualitative
study of subjective aspects of this issue like supply chain, SCM models etc
with these Qualitative issues certain Quantitative measures are also included
in the topic. These qualitative measures may be:
assessment of the Supply chain management concept in industry throughout.
assessment of the Dell way to
integration of supply chain in its business
categorization of Dell and competitors associated with similar or different
review is the first and the foremost step that will initiate this research. A
rough literature review has already been done that justified the scope of the
topic. This will give us a general idea of the statistics involved and will
give us a general idea of the whole process that we have to undergo. The
sources that best suit this research topic are the research papers and books
that integrate SCM and Dell.
assess the efficiency of the Dell we need to have feedback from the SCM
professionals. Questionnaires and
Interviews are the primary data collection technique for gathering data in
qualitative methodologies. Distributing questionnaires to the professionals
will give us their opinion on the overall framework of the industry. Interviews
can be either structured or unstructured but Cooper et al (2006) advices a semi
structured format when it comes to data collection for topics regarding supply
chain process in the industry. A semi structured interview starts with a few
specific questions and then follows the individual’s tangents of thought with
interviewer probes. (Cooper et al, 2006)
semi-structured format used in qualitative research has the following
on developing a dialogue between interviewer and participator.
more interviewer creativity.
will not only serve the purpose of data abstraction but will also establish a
necessary rapport with the tourists which is essential. Individual depth
interviews (IDI) should be avoided as interviewee may find it interfering.
PEST (Political Economic Social Technological)
analysis of Dell SCM will also be integrated in research as most papers that
deal with marketing methods use a PEST analysis. PEST analysis becomes
important because technological and social changes affect the Computers
industry. (Wilkinson, 2003).
analysis requires statistics and the primary method that can be used is to do
this is by conducting a survey. This has to be conducted around the major competitors
of Dell or consultants to get the data to be worked upon. We need to approach
various organizations that can help us to conduct a survey.
data that has been accumulated needs to be carefully analyzed. Structured
interviews with responses should be analyzed qualitatively. Surveys coded and
responses should be analyzed quantitatively.
followed what market term as push or gateway process in supply chain which
states computers to be order through mail. Dell went on by enabling Customers
to customize the product they want as per their requirement or building
computers to their specification in 24 hours. And through this Dell achieved SC
cost advantages as it sells computer directly eliminating the margin that would
otherwise have to be paid to dealers. Orders through Internet reduced
order-processing costs and building computers to customer order and then
shipping them immediately, inventory and related costs was reduced
dramatically. Overall, Dell in possession of most efficient supply chain may be
anticipated as the lowest cost competitor and therefore could compete
aggressively on price in this cut-throat market (McGrath, 2000).
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