Supply string management is one of the essential aspect applications which boosts along with size of the organizational procedure. Similar is the situation with Dell, a US based computer manufacturer. Reason for choosing this organization is proficient supply chain so it has that has helped it in attaining high level of customer satisfaction over time. It really is this supply chain that managed to get easy for Dell never to only establish immediate connection with its customers, but also provide them with required product in minimum amount possible span of time. Till 2006, Dell was regarded as as top Computer supplier in global market, however in third quarter of this same calendar year, HP overtook Dell. Perfect reason behind this defeat was reported as disturbed source chain management of Dell over which extra attempts must restore its position in the market.
Dell adopted a unique technique of selling PCs directly to the clients bypassing all the resellers that existed in various conventional models. This plan made it easy for Dell to maintain its profit percentage along with providing cheaper product to its customers. This provided Dell a higher end competitive advantages that made it possible to further expand this resource chain strategy further and make its application in various regions of the world without the ambiguity. (Dell's Resource Chain Management Practices)
Using this immediate model helped Dell to make customized made products that are completely established over demands provided by clients. This also helped in reducing inventory costs as all the products were created on direct basis. Because of removal of most such intermediaries, efficiency of the company also acquired augment due to reduced time utilization and superior product availableness at low prices than other suppliers operating on the market. (Dell's Supply Chain Management Practices)
Prime reason for adopting this system in this case is easy availability of high overall flexibility to the customers in the form of customization of all its products matching to their requirement. It also allows its users to make an online repayment with an extremely secure money copy service use. This booking of product could be achieved either through online booking or buying through telephone. There is an on time tax free delivery at almost all of the places of world by Dell. (Dell's Source Chain Management Techniques)
One of the very most advantageous activity it performs is the fact it directly obtain the customer requirement in both software and hardware portion that is the main essence of its resource string management. This violates any need for additional engineer, thus save a big number of resources which could further be utilized in various other operations.
Planning is one of the most crucial aspects in resource chain management as it is this factor that decides the attainment of pre-decided goals. And yes it is these factors that produce sure how effectively Dell can make its lifestyle possible in a profitable manner. Each one of these reasons make it inevitable for the company to avoid this parameter from its supply string management. (Case Study: Supply String Management at Dell, Dell's Immediate Model )
Dell basically centers over anticipating its consumer demand in accordance to the exterior environmental factors. Dell works over a sizable range of assumptions as it isn't possible for the company to be sure that it is able to predict every single scenario which could happen. Prediction and depiction of customer patterns has become relatively easier with the progress of technology and rising utilization of internet around the world. Nonetheless it is not easy to make a right estimation of the demand of the clients that may be proved from the presence of storing and warehousing, which is considered as an essential need of all the companies. (Case Study: Supply Chain Management at Dell, Dell's Direct Model )
Supply Plan of Dell is based over made on order computer product. This is permitted through preparation of a basic infrastructure of the product and finalizing it when an order is placed. This step in supply planning was made to maintain apposite synchronization between highly changing demand of the customers present in current market as compared to the option of the product. Source Plan of any business is developed relating to the availability of the product with the company. Manufacturing something is known as to be an important step in supply string management of the business, but rendering it available to the customer along with maintaining revenue is also considered to be an important job. Also, providing maintenance services to the customers after product has been sold is important, especially for Dell as it is known for its after sales services. (Case Study: Supply String Management at Dell, Dell's Immediate Model )
Raw Material: When a detailed analysis is to be performed over Supply Aspect of Dell, main facets which come into picture are raw materials that are needed to be able to manufacture the product and obtain required output. Its build-on-order design takes care of this activity in a highly organized mode. As it is assembles laptop computers and computers, it needs all the computer parts and peripherals as its recycleables. A number of the specific raw materials that are essential in the making process are chipset, motherboard, different kinds of memories, images credit cards, LCDs, different software that should be installed on customer demand, various attaching wires, etc. All these entities are arranged in orderly fashion to secure a quality product. (Dell's Resource Chain Management Practices)
Manufacturing Process: It's totally based mostly over the business that which processing procedure it wishes to adopt as a way to prepare its product. This adoption of specific approach is also the representation of quality standard an firm like Dell uses. There are many quality management techniques like TQM (Total Quality Management), Six Sigma, ISO 9000, etc that Dell could take up. Also these techniques draw out the difference in the making process that company will choose for its future development. In current circumstance, Dell employs ISO 9000 quality management way of making its product. This technique ensures that creation engineers are taking care of the product at different levels of production. (Dell's Supply Chain Management Techniques)
This step can be reported to be violated from the supply chain process of Dell as it immediately distribute its produced products to its customers. As UAE is known as to be as one of the hottest appearing business destination, additionally it is one of the largest consumers of Dell products because of their lofty efficiency. Dell uses a mix of take and push approaches for the syndication and marketing of its products. It requires its products directly to the customers by providing the web shopping facility. Ad and advertising of its products make a brand name for the company and raise the demand of the merchandise on the market.
Documentation is known as to be an important step in supply chain management of the company as it is this factor that means it is easy for Dell to keep an archive for future examination. Future analysis is considered to be highly significant in a variety of financial issues as Dell has to perform comparative review using its own performance at different point of their time. This process is impossible without essential documentation. Following will be the certificates or cargo packages that get excited about the Supply String Management of the organization,
Packed item listing
Financial statement of all the items
Quality evaluation documents
Import/Export authority certificate
Logistics is considered as one of the most important concerns for Dell. This factor makes account when company is providing its product to its customers. This is also helpful in doing various promotional activities that company is performing in order to boost its sales. Cargo was created in such a manner which it functions as a moving banner for the business and ensure that enough people are affected by this promotional take action in which shipment is making its way to its customer. (Dell's Source Chain Management Strategy)
One way of carrying out these promotional activities is through sellers and distributors. But, since Dell avoid both these entities; it must place extra stress over such occurring in order to make sure that it's able to add up to its customer in both quality and variety.
Based over variables defined in earlier sections, supply chain followed by Dell is highly reactive in character as it don't have any intermediate entity, which automatically reduce chances of dilemmas and response time. In such kind of framework, customer directly deals with the organization and not with any supplier that increases response time, hence cost incurring to the company. Such structuring could also be considered to be as the essential reason for Dell being such a successful organization in spite of lots of competitors functioning in the market which implies responsiveness of its resource chain. (Dell's Supply Chain Management Strategy)
Some of the issues that are being faced by Dell in recent times are,
First problem that Dell experienced was regarding its competition, i. e. HP. After 2005, HP overtook Dell in several procedures especially in conditions of supply string management that managed to get easy for HP to provide cheaper products than Dell that reduced competitive advantage of the company. This decreased cost of HP anticipated to increased efficiency of source string put more pressure over resource string of Dell to make further enhancement.
Another problem encountered by Dell was increasing complexity in its products that can't be handled on a direct basis without the assistance from intermediaries. This is an important step for organizational expansion, but it leads company within an undesired course that was not expected by the proper department of the organization. (Dell's Supply Chain Management Strategy)
Some of the chance management tactics used by Dell include,
One of the greatest aspects associated with Dell is its customers that may be segmented in the category of loyal. In order to suffice their aspirations from the company, it started spending more in its R & D section in a way that quality of its products could be improved without the exception.
Also to reduce the risk associated with growing competition in the market, Dell made use of innovation with the help of its supply string to provide its customers in a better manner by giving personalized answers to its clients.
Another strategy to mitigate risk from the organizational performing is molding its supply chain functioning in such a way that it's categorized regarding its product without the difficulty and simplify complexities from the product. (Dell's Resource String Management Strategy)
Dell has incurred a source chain management system which is free of intermediaries in the process consequently which the response time to the consumers demand decreases and so the credibility of the business improves. This framework of supply chain is really helpful for the customers to deal immediately with Dell without interference from any intermediate. The distribution process of the business is a lttle bit bizarre from the standard supply chain process because Dell use to provide its last products right to the finish users or customers. The Economic and politics makes like fluctuation in exchange rates, overall flexibility of operations, and regional trade contracts are being helpful in increasing the efficiency of the resource string management of the business. The supply chain management adopted by the business is highly good for the business as well for the customers because the business use to customise the procedure of supply in line with the band of customers it is going to deal. The business should adopt several quality guarantee systems of TQM, six sigma and ISO. Complexity of the merchandise range should be reduces to improve the organization's development.