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DELL Supply Chain
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DELL Supply Chain
- DELL SUPPLY CHAIN ANALYSIS Presenters: Deepika K S Deepika S Dhanush Patel Dileep M Dileep - Dell marketing team
- • Started in Michael Dell’s dorm room at the University of Texas 1983 1985 2000 $6 million $500 million $25 billion • Reason- supply chain and distribution strategy
- Supply chain integration strategies • Use of rapid seamless communication • A clear definition of what DELL does best • Selection of partners who are best in their respective fields • Use of a minimum number of suppliers • Using internet as a strategy • Less emphasis on guarding intellectual assets and more emphasis on using assets rapidly before they become out of order
- Functioning Historical Sales List price Promotions Competitor promotions Inventory position Market trends
- STRENGTHS Total command Knowledgeable Low operating costs Direct customer relationship Inventory
- REASONS FOR SUCCESS • No more middleman Mail-order system Use of internet • Virtual integration Dell also required its key suppliers to establish inventory hubs near its own assembly plants. • Innovation on the assembly floor Manufacturing cells
- WEAKNESS • Dell’s sales revenue from educational institutions such as colleges only accounts for a merely 5% of the total
- OPPORTUNITIES • Diversification strategy Peripherals including printers and toners, but now also includes LCD televisions • The internet
- THREATS • The competitive rivalry • Fluctuations in the world currency markets • Almost identical prices • Technological advancement
- "We are always looking for ways to take out waste, to take out time and take out costs, and then passing those savings along to our customer" - Dave Schneider Engineering Manager for Dell Americas operations
Notas do Editor
- By carefully analyzing and making strategic changes in the personal computer value chain, and by seizing on emerging market trends, Dell Inc. grew to dominate the PC market in less time than it takes many companies to launch their first product.
- What was this supply chain?---But what dell did was integration of all these activities internally so that direct distribution is possible
- Lets have a look at the value chain analysis of DELLSo the transformation is end to end
- So what were the strategies that helped them to succeed?
- Value chain, end to end transformation---- all these are fineBut how do they know the demand– how do they function?
- For this functioning to happen, all the levels in the organization must be involved in decision makingstrategic level decisions overall corporate strategy direct sales method operational level analyze and predict the capacity in supply chain
- Dell has total command of the supply chain.Dell cuts out the retailer and supplies directly to the customers. It uses information technology, and Customer Relationship Management (CRM) approaches to capture data on its loyal consumers. So a customer selects a generic PC model, and then adds items and upgrades until the PC is kitted out to the customer's own specification. Components are made by suppliers, never by Dell. PC's are assembled using relatively cheap labour. You can even keep track of your delivery by contacting customer services, based in India. The finished goods are then dropped off with the customer by courier. Dell has total command of the supply chain.They are a knowledgeable in areas of information, communication, e-commerce, e-business, and internet and web technologies. Dell is a computer maker, not a computer manufacturer low operating cost relative Direct relationships with customers such as corporate and institutional customers.Dell turns over inventory for an average of every six days, keeping inventory costs low.
- .” These “cells” grouped workers together around a workstation where they assembled entire PCs according to customer specifications
- also provides Dell with greater opportunities since all they have to do now is to visit Dell’s website to place their order or to get information.
- The competitive rivalry Dell sources from Far Eastern nations where labour costs remain low, but there is nothing stopping competitors doing the same - even sourcing the same or similar components from the same or similar suppliersAlmost identical prices, price difference is no longer an issue for a customer. They might choose other brands instead of waiting for Dell’s customized computers.Technological advancement is a double-edge sword. It is an opportunity but at the same time a threat. Low-cost leadership strategy is no longer an issue to computer companies therefore it is important for Dell to stand out from the rest.
- Even though it is said to be that their relationship is “DEEP” with customers it’s quite visible that the service is not the greatest among all. Having a direct relationship with the customer is a good strategy but considering big customers who are going to be retailers is a big threat.But DELL is an excellent example of implementation of supply chain management.
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