Table of Contents

Introduction. 2

Working Title. 3

Reasons for Choosing This
Topic. 4

Literature Review.. 5

Research Questions. 8

Aims and Objectives. 9

Research Methodology. 9

Proposed Action plan to be followed over a period of May/2009 to
September/2009. 12

Conclusion. 12

References. 13

The
Dell Way to Supply Chain Management

Introduction

Number
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.

As
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.

In this
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
hiccup.

Working Title

“The Dell Way to Supply Chain
Management”

The
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:

“Supply
Chain”

In
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
manufacturing industry.

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 “DELL”

Dell
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. 

Reasons for Choosing This Topic

One of
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.

Dell
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,
2005).

So
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.

Literature Review

The
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.

Amidst
the manifold reasons for the popularity of SCM concept, Mentzer (2001)
identifies the 3 major drivers’ responsible fro effervescent growth of the
subject-

  • 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.

These
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.

But
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)

Though
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
times.

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Steven
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.

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(Source:  Dell website)

Curt Johnson,
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.”

Research Questions

Based
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:

  1. What determines the successful supply chain
    management model vis-à-vis visibility,
    action, management, authority, technical equipment etc?
  2. What are the changes that are required in
    orthodox model of SCM existing so far?
  3. What are the Dell ways to deal with the Global presence
    of business?
  4. Can Dell still do better by reconstructing its
    SCM model
  5. Satisfaction level of Dell customers 

Since a
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
to cover.

Aims and Objectives

In view
of the research questions selected one can try to construct the critical
analysis by setting and achieving the following aims for the proposed research
topic:

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  • To learn about various supply chain models as
    proposed by various scholars
  • To review the background of DELL as a computer
    company
  • To study the SCM model adopted by Dell viz warehouse, inventories, operations,
    finances etc
  • To evaluate the measures it has taken to
    innovate its SCM (such as environment initiative, EICC)

Research Methodology

This
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

Along
with these Qualitative issues certain Quantitative measures are also included
in the topic. These qualitative measures may be:

  • The
    assessment of the Supply chain management concept in industry throughout.
  • The
    assessment of the  Dell way to
    integration of supply chain in its business
  • The
    categorization of Dell and competitors associated with similar or different
    strategies.

Literature
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.

To
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)

This
semi-structured format used in qualitative research has the following
requirements:

  • Relies
    on developing a dialogue between interviewer and participator.
  • Requires
    more interviewer creativity.

This
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).

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Quantitative
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.

The
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.

Proposed Action plan to be followed over a
period of May/2009 to September/2009

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Conclusion

Dell
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).

References

  1. Cooper D R & Schindler P S, 2006, Business Research Methods, Tata McGraw
    Hill International, New Delhi.
  2. Cooper et al., 1997. In Mentzer, J.T., 2001. Supply Chain Management. SAGE pg 2
  3. Del, M. & Fredman C., 2005. Direct from Dell: Strategies That
    Revolutionized an Industry
    . COLLINS
  4. Hamel, G., 2002. Leading the Revolution: How to Thrive in Turbulent Times by Making
    Innovation a Way of Life
    . Harvard Business Press pg 296-297
  5. Harrison, T.P., Lee, H. L. & Neale, J.J.,
    2003.  The Practice of Supply Chain Management: Where Theory and Application
    Converge
    . Springer
  6. Hines, T, 2004. Supply Chain Strategies: Customer Driven and Customer Focused. Butterworth-Heinemann
  7. Holzner, S., 2005. How Dell Does it: Using Speed and Innovation to Achieve.
    McGraw-Hill Professional,
  8. Khosrowpour, M., 2005. Advanced Topics in Electronic Commerce. Idea Group Inc. pg 268
  9. La
    Londa, B.J., 1998. The costs of “functional shiftability”. Supply Chain Management Review, 34(1) pg 9-10
  10. McCormack
    et al., 2003. Supply Chain Networks and
    Business Process Orientation: Advanced Strategies and Best Practices.
    CRC
    Press pg 131
  11. McGrath,
    M.E., 2000. Product Strategy for High
    Technology Companies: Accelerating Your Business to Web Speed
    McGraw-Hill
    Professional, pg 210-215
  12. Mentzer,
    J.T., 2001. Supply Chain Management.
    SAGE pg 1-5
  13. Miltenburg,
    J., 2005 Strategy: How to Formulate and
    Implement a Winning Plan
    Productivity Press. pg 287
  14. How Dell Does IT: Supply Chain
    Management
    accessed
    on 9th February 2009 from <http://www1.euro.dell.com/content/topics/global.aspx/casestudies/en/emea/ie/fy2008_q1_id224?c=ie&cs=RC1078533&l=en&s=pad>
  15. Schmied,
    J. (1993). “Qualitative and quantitative research approaches to English
    relative constructions” In Souter & Atwell.
  16. Velte,A
    & Elsenpeter,R.C., 2008. Green IT:
    Reduce Your Information System’s Environmental Impact While Adding to the
    Bottom Line.
      McGraw-Hill
    Professional, pg 173-181
  17. Vollman,
    T.E et. al, 2004. Manufacturing planning
    and control systems for supply chain management,
    5th (ed). Mc Graw
    Hill-Irwin, New York.
  18. Wilkinson,T
    J, McAlister A, Widmier S, 2007, Reaching
    the international consumer: An assessment of the international direct marketing
    environment
    , Direct Marketing 1(1),p
    17-37.