Questions and Answers Essay on Improving the Flexibility of the Desktop PC Supply Chain

Why does L5 incur higher manufacturing and logistics costs than L6? Identify costs incurred by L5 and not by L6. Identify any costs incurred to only L6 and not L5.

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There are several reasons why the cost of manufacturing L5 is slightly higher than the cost of manufacturing L6. Some of these reasons include; L5 is integrated inside a facility of the Dell corporation while L6 is incorporating offshore and also outside a facility that belongs to the Dell corporation. Secondly, in L5 motherboard is transported through the air which is an expensive means of transport. This makes the cost slightly due to the transport cost. On the other hand, the integrated motherboard which is transported through the water which is slow but cheap which does not add on to the end price. The third reason why L5 is more expensive compared to L6 is that more work is done during the manufacture of L5 than the amount of labor that is required during the production of L5. (Babenko, Slesarev, Chigorin, & Lempitsky, 2014)

The cost of the third party that is applied in the manufacture of L5 is also capable of adding on the cost of its production which later makes its cost higher. There is no third party integration cost when producing the L6 which makes its cost low as the cost of its production is significantly low. Another reason why L6 is cheaper is that there is a reduction in the cost of packaging the motherboards of this type of computers. The cost of packaging the motherboards of L5 type is higher which eventually reflects on the end price of this specific type of computers. There is an increase in the amount due to logistics and transportation cost for bringing in the chassis and which are primarily shipped through the air which is undoubtedly very expensive. These costs have an impact on the final price of the L5 type. (Zbontar, & LeCun, 2015). The chassis in L6 are integrated into the motherboards which are primarily shipped through the water which is cheaper and hence a lower cost of the end product L6.

Which of the six proposed manufacturing solutions should Dell implement based on survey results (Fig. 6-1)? Why? What are the pros and cons of this recommendation?

CM-managed 3PI is one of the options that Dell Corporation has in the production of Level 5 and Level 6 computers. (Davis, 2016). This option middle range complexity and the cost is dependent on the complexity of the process involved. Hence option 3A which is the Integration at SLC is the option which was found to be the least complex. Therefore Dell Corporation should consider using this option as it is cheaper due to its lower complexity. Due to this complexity, the cost of producing the machine would go down as the survey had already found out that the least complex option is the cheapest. The advantages of this option are that it is less complicated which is essential for procurement in all corners of the world. Additionally, supplier quality engineering management is reduced which has an impact that is favorable if applied by the Dell Corporation in its production of computers.

This option, however, has several disadvantages that are attributed to it. Some of these demerits include: this option is very complicated for cost accounting. It consumes cost significantly which makes the production of level 6 and level 5 computers to have an increased price in the market. Secondly, the Integration at SLC option is that there are extra control and inventory control headcounts are necessary for this option. Nevertheless, this option seems to be the most viable for the Dell corporation which will facilitate a smooth running of the production of both levels of the computers.

What would you do if the chipset supply shortage further deteriorated?

In the event of a shortage of the chipset supply deteriorates, the manufacturing corporation should consider the following options such as keeping offline the integration at the suppliers' logistic center. (Gawer, & Cusumano, 2014). Additionally, it can maintain the level 6 and level 5 computer manufacturing process without changes. It can also handle the motherboard-chassis integration function at an SLC. Additionally, Dell can manage 3PI directly. Another option for Dell in the event of supply shortages Dell America Operation cellular integration will enable the Dell corporation to carry out level 5 and level 10 manufacturing function.

How good is the methodology employed by the Business Process Improvement (BPI) team to determine the excellent manufacturing option for Dell? Are there more effective approaches?

The methodology of the BPI team was good. The process that BPI applied was good depicting smoothness and sustainability of the corporation as well as the production of the level 5 and level 6 computers. The use of process charting to improve the comprehension of the processes that lead to improved productivity. Balanced scorecards and the gauging a parameters and performance pointers also are determinants of an active BPI.

What have you learned from this case study that you would be able to apply in an organization where you have previously worked or currently work?

Changes in supply for dell will be essential for the corporation to get solutions to the root causes that lead to an increase in the production of L5. Dell should, therefore, consider adjusting its supply chain settings to be able to maintain a competitive advantage that it enjoys. Dell will have its plant that will be assembling motherboards into L5chassis in SLC. (Huang, & Xu, 2015). Due to this, there will be a need for dell to install efficient equipment at the SLC. Revenue expenditure of the new material at SLC will be minimal and fewer effects will take place due to the modification of the supply chain.

References

Babenko, A., Slesarev, A., Chigorin, A., & Lempitsky, V. (2014, September). Neural codes for image retrieval. In European conference on computer vision (pp. 584-599). Springer, Cham.

Davis, G. F. (2016). The vanishing American corporation: Navigating the hazards of a new economy. Berrett-Koehler Publishers.

Gawer, A., & Cusumano, M. A. (2014). Industry platforms and ecosystem innovation. Journal of Product Innovation Management, 31(3), 417-433.

Huang, H., & Xu, H. (2015). Dual sourcing and backup production: Coexistence versus exclusivity. Omega, 57, 22-33.

Zbontar, J., & LeCun, Y. (2015). Computing the stereo matching cost with a convolutional neural network. In Proceedings of the IEEE conference on computer vision and pattern recognition (pp. 1592-1599).