Supply Chain Management is an activity carried out by organizations or businesses to better provision of services to customers and to sustain business through a thorough consideration of aspects that affect both the suppliers and consumers. Notably, supply chain incorporates features like manufactures, suppliers, transportation, customers, wholesale people as well as retailer. The main purpose of the supply chain is to ensure that it satisfies the customers' demands through value additions in products and services. Dell is a renowned technological company that specializes in the development, selling, repair and supporting the computers and computer-related products. In its operation, the management of Dell identified the essence brought about by supply chain in corporations and proceeded to implement ideas which gave them an advantage over other corporations. Therefore, the paper focuses on the aspects of the supply chain that has facilitated the success of Dell.
A successful supply chain has been attributed to making Dell a leading computer and technology company. One aspect of the supply chain is the direct model. In the approach, Dell operates by selling its products directly to its customers without involving retailers. Thus, creating a direct connection with individual customers in order to facilitate the service delivery. Moreover, Dell gets the opportunity to provide its customers with a chance to acquire customized servers and computer products which then get delivered directly to clients. The direct supply was initiated by the availability of technological innovations where the internet allows online purchases to be transacted.
Indeed, the online platform transactions help clients to receive their purchased products easily as compared to when the supply chain involves the retailers for in-store purchase. Hence, the online service provisions help Dell to determine prices of various products and allow adjustments in costs depending on the supply and demand in the market. In addition, its ability to provide low prices to its consumers as compared to other retailers. The method is also useful in that it helps Dell to save on costs meant for building warehouses since all the products produced get sold directly to customers thus no need for storage facilities. Nevertheless, customers can visit the online store at their own convenience and come up with a computer that meets their own needs. Typically, the online store has worked very well for Dell where it has continued to enjoy increased new clientele. Also, the direct business approach has been a key factor in ensuring Dell stays at the top as the industry leader in offering computers and its products.
Another aspect of Dell's supply chain strategy for success is the Build-to-order strategy. The strategy gets implemented where the customer actively gets involved in by taking the first step of making an order for their preferred products. The configuration details of the products are then sent to the production sector where the process of PC assembly is initiated. When the manufacturing of the computer is fully completed and all the required software have been downloaded and installed, the arrangement of shipping to the customer proceeds by the use of 3PL. Moreover, Dells relies heavily on existing data to drive their decisions. Dell has been able to stay ahead of the demand curve in the PC market that evolves daily due to the accessibility of data on their sales and customer feedback. The approach helps the company to keep track of new trends, changing the preference in order to develop, improving and add value to their services in the critical segments of the customers.
Virtual integration has been a key factor in the supply chain at Dell company. The management at Dell decided to settle on a long-term relationship where a customer selects, and names the preferred PC brand and its components they send the details to manufactures. Also, for the approach to be effective, Dell prefers its suppliers to establish inventory hubs near their own assembly firms. Hence, the corporation gets the chance to interact with the manufacturers in real time which helps them monitor products and ensure they are precise at the same time meet the customer's needs. The implementation of Just-In-Time inventory scheme which operates within six days helped minimize the duration in which Dell brought in new PC models to the markets thus maximizing profitability. Notably, the approach was vital to the success of Dell as it opened opportunities for vertical integration without utilization of resources to set up manufacturing plants of their own.
Furthermore, the aspect of Innovations in the assembly floor facilitates success. Dell saw the need to shuffle its assembly process entirely. Previously, the company had established long assembly lines where the workers repeatedly performed a single task. Hence, the company sought to establish manufacturing cells where the workers were put on a workstation then they organized PCs in regard to requirements from the customers. The approach attracted most clients since the value of products and services had been of quality thus increasing sells.
Dell Company is identified with a unique supply chain that has designed its assembling and manufacturing process in such a manner that product is manufactured and assembled within the shortest time possible. Through this supply chain, it is possible to postpone early production and the general production of a new product can be initiated. Dell as greatly focused on doing away with intermediary so as to facilitate direct relationship started with the making of the general telephone calls to customer and through interaction that involves face to face and now an interaction that involves the internet. In the general operation, it is impossible for Dell to come up with a single computer until the client has ordered the product and the cash credited. Through the general supply chain management, the company has worked very hard on reducing the general inventory space and investing the capital in the general production. It's unique for a large company like Dell to manage their supply chain without putting in place a warehouse. Additionally, this has been successful since the existing suppliers have also been aligned to make sure that Dell components are delivered, as Dell are using them hence law inventory, in the long run, is identified to have gone down.
In the general supply chain management, orders are made online, received and then downloaded to a manufacturing setup after a period of 15 minutes. The order is then directed to the factory planner which is generating material requests. The customers are then informed about the availability and the process the starts in the kit region then moves from the custom factory. For four hours of the general operation, the company has worked hard in creating the barcode and tag lives in the whole production process. A complete customer order is then picked through the scanned barcode. Through virtual integration, it is important to note that Dell established one great relationship that is direct to the customer has created a good relationship between the manufacturer, customers and suppliers. Generally, the company focus on coming up with one great partnership for labor intensive and the general capital intensive.
In summary, the supply chain is very essential in any business whether large, medium or small businesses. In Dell, the major aspects of the supply chain that contributed to its massive success were a direct model, build-to-order strategy, virtual integration as well as innovations on the assembly floor. The aspects increased maximized profits, attracted customers and let to increase in profit margins.
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