Scm of Dell

Topics: Supply chain management, Supply chain, Personal computer Pages: 8 (2494 words) Published: July 2, 2013
Introduction of Dell Corp.

Dell is an American multinational computer technology corporation based in Round Rock, Texas, United States that develops, sells, repairs and supports computers and related products and services. Dell has more than 103,300 employees around the world, and ranked 38thin the Fortune 500 list which indicates that Dell is third largest PC manufacturerㅇin the world after HP and Lenovo. The company is well known for its innovations in supply chain management particularly its direct sales model and its “build to order” model. A Founder Michael Dell, who was a student of Texas University in the year of 1983, suddenly quitted his school and established Dell Corporation after realizing the fact that he could make a better computer with low price. Contrary to existing indirect sale model, Dell applied direct sale model to efficiently satisfy the customer needs while reducing the delivery time. Through this innovative sale method, Dell started to grow rapidly and thus became one of the most successful companies in computer manufacturing industry. Dell sales though the method of direct sale not only to individuals, but also to multinational companies, small & medium enterprises, government, educational institutions, and etc. Dell is the first personal computer company that delivers customized computers to customers systematically, though nowadays online customization service became a de facto standard.

Literature Review

(Magretta, 1998) on the article "The Power of Virtual Integration: An Interview with Dell Computer's Michael Dell" says that Dell Computer is evolving in a direction that Michael Dell calls virtual integration. (Waddington, n.d.)in the paper "Building an agile supply chain" also contends that vertical integration of Dell enable to communicate and coordinate with suppliers via an extranet as if they were the same company - a so-called 'extended enterprise'. So, this kind of direct customer contact offers Dell undiluted feedback to improve their methods. Davis (2010) maintains, on the paper "Dell's transformative journey through supply chain segmentation", that Dell revolutionized supply chain management with its direct model, configure-to-order (CTO) manufacturing, just-in-time inventory model and impressive cash-to-cash conversion cycle. It is also stated that faced with changing customer needs, product commoditization and competition, Dell designed its supply chains based on a mix of cost optimization, delivery speed and product choices and segmented supply chain capabilities to satisfy specific customer requirements, (Gilmore, 2011) in the article "The Lessons from Dell's Supply Chain Transformation" states Dell had record earnings in 2010. Product availability improved 37%, and order-to-delivery times improved 33% over 2009, according to the recently released financial statements. So, from these numbers, Gilmore explains some key lessons: Dell quite successfully built the supply chains from the customer value and separate supply chains to meet distinct product-market needs, but looked for synergies to reduce complexity and costs. Gilmore, on the article, suggests that companies should learn lessons from Dell when they go through transformation of supply chains, they should take a disciplined approach to transformation and realize the true scale of task with "Voice of the Customer" orientation. According to Klinker, Terell and Mahfouz (2006), in their paper "Dell's Use of CRM-SCM Integration to Dominate the PC Market", they contends that Dell has its own unique SCM, explaining that Dell has developed a strong relationship with both its suppliers and customers. They also argue that this management style enabled computer components to be available from suppliers to meet customer demands through the strategic focuses on efficient supply chain management through i2 software, which is provided by i2 Technologies. (Intel®, 2002) on the case study - "Dell: Building a World-Class...
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