Dell: Supply Chain & Logistics Management Through Direct Sales Model - Essay Sample

Introduction

Dell is one of the multinational organizations that manufacture computers. The founder of this cooperation was interviewed to explain supply chain and logistics management. This essay is based on a transcript entitled, "Your Computer, Your Way: about the direct sale model of how Dell approaches selling their computers to the public. Also known as the Dell and the Direct Sales Model". The essay discusses ways dell's supply chain and logistics differ from the other computer contenders and how they react towards dell's method. The transcript explains how proper and accurate research facilitates business success. Also, it tells the impact and influence brought by making sales online.

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Question 1

Dell's supply chain and logistics innovations differ from its competitors. The changes in manufacturing and effective distribution strategy used in this organization has helped its reputation and sales rise above other computer sellers (MacNeil and Lehrer, 1999). Before Dell started manufacturing computers, he first analyzed the market and strategized on changes to make in the existing personal computer value through controlling the emerging trends. Dell took less time to dominate the computer market where many companies decided to launch its first product to the customer. The cooperation chose to use online platforms to cut expenses from retailers. The company sold computers direct to the consumers. Conversely, the competitors were building pre-configuration and used retailers to reach the public. The process was long and resulted to depreciation. In Dell's company, consumers attained the chances of creating systems of their choices, depending on their needs. This act made them feel special and not only consumers but part of the organization's team.

The organization created a unique and inventive assembly line process. They audited the manufacturing process and pursued zero inventories. The products are manufactured on order; no products are stored. The company has numerous small teams of workers known as cells who assembles computer systems once the customer places an order. The competitor, such as Apple stores, purchase a large volume of raw materials and stores them to block other computer manufacturers from getting them. Both companies use different inventory strategies that distinguish their characters. These strategies pose higher risks to these manufacturing companies, but they use different ways to combat them. For instance, Dell focuses more on-demand forecast with enormous analysis in data and database. They believe that tremendously lean inventory results in lower prices and survival in the market. While in Apple, they prefer outstanding goods combined with marketing strategies. These features cultivate tons of sales as people buy these products due to new features that come with them.

Question 2

Numerous emerging logistics management and supply chain factors have negatively affected computer chain stores. These include the internet. The advanced technology has brought platforms where one buys products that are later delivered at the doorstep. Nowadays only a few people go out to purchase products from local shops. Online platforms provide customers with a more comfortable and exciting shopping experience. Moreover, all products are available online, where one can easily research, compare, and review the specifications before purchasing.

The computer chain stores are currently facing difficulties trying to compete with online stores. Some of the factors bringing these challenges include size, which limits selection. In some circumstances, for a customer to find a computer with individual specifications, one has to go to numerous locations and shops. Also, price becomes another challenge. Since larger stores require substantial operational costs, products end up being costly to cater for expenses such as rent, employees' salaries, and electric bills. Contrariwise, online stores do not incur some of the costs as products can be stored in the company. Thus, the low expenditures allow them to offer discounts such as percent-off discounts and free shipping, yet they make extra income. However, large chain stores also try to compete through offering coupons, resell of returned items, and in-store discounts. Although they fail the competition due to lower prices given by online stores, they have a chance of redeeming themselves through customer services. The physical stores provide consumers with purchase security as one can quickly return a product. Besides, the knowledgeable salesperson answers questions and sometimes practically demonstrates what it will be like using the product. Nevertheless, although computer chain stores offer these services, people still prefer online to avoid commuting. Online stores offer products with specifications precisely to one needs at a lower price compared to the local stores with higher prices and might lack the critical specifications.

Question 3

According to Frantsiyants, K. (2019), ninety-nine percent of the business ventures fail within the first two years. However, as explained in the transcript, market research helps avert big technology businesses from failing. Technology is a game-changer. Additionally, the more it is advancing, the better the companies are becoming, and failure decreases. Entrepreneurs can now predict the future of business and decide whether to invest massive amounts of resources or not. This depends on the demand for a product and the possibilities of sales in the future. For instance, nowadays, people want portable machines such as laptops and tablets. Thus, manufacturing desktops might bring massive losses since only some offices use them. Most of the desktops owners regret their choice since it is cheaper to invest in a laptop.

Moreover, every computer requires software updates after some time. Desktops need more software updates sessions compared to a laptop. Manufacturers of these products did not pay attention to trends of consumer gravitation, where some end up losing millions of money from buying raw materials for these projects. People in this business by now know that laptops might become obsolete. Mobile phones are currently serving the same purpose as laptops, and they are portable due to lightweight, unlike laptops. People still purchase computers because phones have some limitations. Once the mobile companies solve this problem, the purchase of the laptops will be minimal. So, companies that are still willing to last in the market should avoid traditional ways of doing things and market research the new trends to prevent the massive loss, which might lead to bankruptcy.

Conclusion

To sum up, organizations manufacturing and supplying strategies differ. Different cooperation uses distinguished inventories to create markets of their products. Nevertheless, as explained in the transcript, times are changing, and technology has become a game-changer. Every day we are experiencing new trends bringing changes in organizations' manufacturing, distributing, and supplying sectors. The traditional ways are bringing losses daily. Nowadays, the consumer needs are requiring precise specifications. So, companies manufacturing computers can no longer produce machines and store them, for they might lack buyers. Therefore, any company that wants to last forever in the market must change strategies and approaches to accommodate current and future trends. Also, they must invest in market research to manufacture products that fit consumer wants.

References

Frantsiyants, K. (2019). Online Shopping: The Influence of the Internet on the Transformation of Consumers' Buying Habits and Experiences (Doctoral dissertation, Empire State College).

MacNeil/Lehrer Productions (Producer). (1999). Your computer, your way: Dell and the direct sales model [Video file]. Retrieved January 21, 2020, from https://libraryresources.columbiasouthern.edu/login? auth=CAS&url=http://fod.infobase.com/PortalPlaylists.aspx?wID=273866&xtid=10070