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Logistics And Supply Management Of Dell Business Essay

This survey will recognize the problems associated with logistics and supply management of Dell, different ideas implemented by Dell, the framework, dynamics and key procedures of marketing channels and logistics adopted by Dell.

Dell that proven in 1984 is just about the second largest pc manufacturing company. It includes a large number of suppliers that supplies amount of components that your industry uses to make PCs. Today it got unique position in market with the help of its performance objectives like high quality, swiftness, and dependability with low cost.

Analysis demonstrates Dell adopts three key source chain strategies that are Dell DIRECT SELLING that helps it to get in contact with customers immediately and helps to shun bullwhip result, Build-to-order that helps it to follow Just-In-Time inventory and get good thing about the machine and Supplier Integration that helps the organization to build up warm relationship using its suppliers, so blend of the strategies makes the organization unique and successful. In addition to these it s distinctive production crops at different favorite locations and resourceful transformation process enabled Dell to obtain competitive benefit over its opponents.

Dell also provides additional after sales service like call centers that are set up all over the world helps local customers to resolve various specialized problems and queries related with their system. In case there is marketing and promotion, it follows consistent pattern. It does it s marketing and promotional strategies through its global headquarters that helps it to talk effectively with its diverse worldwide aim for clients. Furthermore to these, some of strengths of its resource string like use of it at each stage plus some weakness of its resource string like difficulty for home users to make computer are shown.

Table of content

No. Content Page no

1 Introduction

Background Information of Dell, Target audience, Current Market Position, 4Vs of Dell


2 Statement and examination of issue

Brief elucidation of logistics and supply string management of Dell. Explanation of its making Plants and change process model. Addition operations performed by Dell. Strengths and weakness of its source chain.


3 Conclusion

review of report 18

5 Appendix And Recommendations 19


Background Information

In recent years logistics and supply chain management have grown to be the most vital issue for Organizations. Dell has realized this from primary therefore by adding more focus on its logistics, source chain management and direct sales strategies it is becoming one of the most successful Personal computer companies in the world. Dell was founded on November 4, 1984 in Austin Texas, by Mr. Michael Dell when he was students at school of Tx in Austin. Initially only Dell implemented its key supply string strategy of direct selling, primarily they use to take orders on phone according to customer s condition. Then later they do tried to use retail channel from 1990 to 1994, but after that it came back to its direct model and grew quickly and in 1999 it became the main PC company in United States and two among all computer companies in the world. Michael Dell s this unique supply chain strategies and his successful way of placing them directly into practice played considerable role in Dell s success. [Referenceforbusiness, (n. d. )]

Competing against giants like IBM, Hp and Apple, it has 96000 employers working all over the world. Besides pcs, company also offers HDTVs, Mp3, scanners, video cameras, PDA S and other digital equipments made by volume of other companies. [Dell, (2010)] The business is perfectly known for its unique and impressive logistics and supply chain management. As Dell gets to worldwide it relies on number of progressive staff, suppliers that can supply or deliver the merchandise with biggest value so that it can have a positive impact on customer romantic relationships and which can make it to maximize its growth, development, client satisfaction and finally profit. Some of the suppliers of Dell are Dataflow Peripherals Ltd Who supplies free parts to Dell, Intel, Nanya technology firm, parade, o2 micro, Sonix, Material series etc. [Dell, (2010)]

Target Audience

The target market of Dell is divided into 4 sections, large organizations which include big companies and administration organizations, small and medium businesses, and home users. Dell satisfies all its customer segments through direct selling models. 70 %70 % of Dells sales match their large business customers. [Manataki, (pg 11, 2007)]

Performance Objectives and Market Position

The performance aims of Dell are higher Quality pc at less expensive and fastest Speed as it gets major cost savings benefit than its rivals because it adopts DIRECT SELLING Model it does not need to pay to stores and by following Just with time Inventory Method it generally does not maintain inventory for longer period of time which helps the company to lessen its cost ensuing it to deliver PC at sensible price, high quality with the fastest rate than its rivals. Furthermore to these other performance goal of Dell is high Stability, Customers can trust it as it offers central importance to its customers by permitting them to make their own laptop or computer, and providing them straight. While in case there is current market position, Dell is known because of its unique previously listed performance objectives that is higher Quality of Computer and Laptop computers at lower prices with a highest swiftness makes Dell distinctive in the Market. Other than these the successful and unique resource chain and after sales service of Dell also helps it to get distinctive position in market. [Slack et. al. , (2009)]

Performance Goals model


[Slack et. al. , (2009)]

4V s of Dell Level, Variety, Variation, Awareness;



[Slack et. al. , (2009)]

1) Volume The level of level of Dell is high as it highly repeats the procedure of making computer systems on a regular basis and adopts expertise and systemization by adopting Direct sales model and Build-To-Order strategies. So this higher level of size helps the organization to reduce the expense of units.

2) Variety - The amount of variety of Dell is low because by and large it does not add more product types, as it commit less in R&D field. So usually it satisfies its customers with the existing product lines, rather than introducing new types of product and increasing complexness to manage it.

3) Variation The level of variation popular is low and stable, as the organization uses Build to order strategy, it just makes the laptop or computer s according to demand concluded by customers no lofty variation in demand can be seen.

4) Visibility The level of visibility is lower in Dell because it adopts standardization and centralization at each level of its creation and generally Dell does not expose the inner operations of personal computers to the customer who have ordered it, it just can take the order and provides around delivery time frame.

Statement and Examination of Issue

Key Marketing Stations of Dell;

The marketing channels of Dell includes only its suppliers and customers, there are no intermediaries like wholesalers and sellers and this helped it to provide the orders to your client at the fastest velocity. Dell s Route of Distribution starts off with its suppliers which provides it necessary components needed to build Personal computers. After building process Computers are straight send to the entranceway of customers. Dell used short channel to deliver its products since it wants to lessen the complexity, time, cost which boosts if more range of intermediaries are being used.

Distribution Stations and Logistics Stream.


Research founded that the main element and the standard factor of Dell Success is its 3 key supply chain Strategies. Direct Sales Model, Build-To-Order, Distributor Integration.


Direct Sales Model Refers to the verity that Dell will not use any merchants or wholesalers for advertising its PCs but requires order directly from the clients through its established website and provides directly to the customers according to their order. This model allowed company be in immediate connection with its consumers and know about their need immediately. By this, source string Strategy it can create immediate relationship with each individual customer, can also know about their benefits that they need from Dell computers. With the help of this model, company can also know about whom its last customer was, what they purchased and what were their choices. This data helps Dell to put additional products and services according to the customer s choices and make it get nearer to them. [Nilekani, (2010)]

Direct Sales Model:

Figure 4

No more time and cost, as Laptop or computer s are directly delivered to Customers.

Additional time and cost, required to deliver PC s to Customers through Retailer.

This unique strategy is becoming its marketing strategy and also provides product development information. Dell upgraded its direct romantic relationship to Virtual Integration, So with the use of information technology now its customers can become it s partners, for this it organizes, platinum councils(local meetings) where its large number of customers comes, discuss their experience with technicians, salespeople, professionals of Dell, discuss about their needs and targets from technology that assist organization to get competitive advantages on other Computer companies, which does not provide such services. [Thompson and Gamble, (1999)]

2. 2 Build-To-Order

Build to order strategy is the Source chain strategy which focuses on building computer only once customers order it. In order shown in amount 5 first customer place purchases from Dell s website as per their requirements, then your information about configurations as per customers necessity are send to manufacturing floor and then the assembly commences. [ Thompson and Gamble, (1999)]

Figure 5

If Dell s this Build-to-order supply string strategy is in comparison to other personal computer companies, it is clear Dell experienced several advantages. Firstly the level of inventories is really small, that results into low priced to keep and keeping them, on the other hand other pc organizations were required to pay cost to maintain its inventory. Subsequently, extremely fast response can get to demand changes for occasion if some new software or processor comes then Dell don't need to wait around till the first stock gets rid off, and can notify the customer about the new components if the customer desires then only it have to tell to its suppliers to provide it so no unused stock will be kept and Dell will make exactly what a customer wants. Apart from this by pursuing build-to-order strategy Dell gets benefit of just in time inventory which helps it place out the defective element and replace it quickly before more defective components raises out.

2. 3 Suppliers Integration.

Figure 6

Dell has got suppliers from all over the world which includes countries like China, India, and US etc. A number of the big suppliers of Dell are Samsung, Motorola, Sony, Sanyo etc and all this suppliers products components according to the code of do made by Dell. The relationship of Dell using its suppliers entirely helps its two key supply string Strategies. It considers its suppliers as an important and internal part of its success. The distributor picked by Dell has expertise, experience and capability to deliver value added components and the performance of these suppliers is measured by pre-agreed methods. [Manataki, (pg 13, 2007)]

One of the key goals of Dell is to reduce the inventory and maximizing speed, so it demands its distributor to provide materials at high speed instead. So for example instead of saying we wish 10, 000 to the warehouse inside a fortnight, Dell says we need 10, 000 tomorrow by 7am at warehouse. Among the facts is the fact that Dell does not maintain inventory more than six times. In order to deal using its high inventory velocity, the suppliers are required to retain their stock near Dell s flower, or start their making centre around them, build their warehouse near Dell or they can create it elsewhere and offer to the crops. At some vegetation the company employs Supplier Inventory System this is the components given by supplier are held in vehicle only and are considered according to need and the suppliers have to look after that inventory till it is been removed by the business. Many of its suppliers of Asia who provides hard disk drives, floppy drivers, cable connectors, CD Rom drives items it from different location to processing hub. On the other hand large percentage of its motherboard suppliers fabricates components around Dell flower for example Solectron and SCI located at Guadalajara in Mexico source s Dell US crops. [Christopher, (pg22, 2005)]

For all the procedure above, Dell has close relationship, common trust using its suppliers in order to switch over key data. Furthermore it distributes information with its provider by using internet and IT, it set up website called valuechain. dell. com which runs extranets between Dell and its suppliers. Through Valuechian. dell. com the suppliers of Dell can get information about level of inventory in resource chain, require data, the superiority of components. i. e. if any part is faulty they can notice through this chain and change it out. Apart from this it can also get information about new part transitions. Thus by this system Dell shares demand and development information with its suppliers and by this process additionally, it may avoid bullwhip result. [Manataki, (pg 14, 2007)]

Manufacturing Vegetation of Dell and Change Process;

Figure 7

Dell organizes its manufacturing plants by region, so it builds just a few plants to provide its regional markets. For instance, it includes manufacturing plant life in Austin, Tx, Nashville and Tennessee that provides the marketplace of North America. Seed in Eldorado do Sul, Brazil will serve the market of Brazil and North America. While the market segments in Malaysia and other Asia pacific regions is offered by Penang plant. Xiamen, china acts the market segments of china, limerick and Japan. Crops in Ireland provide the marketplace of European countries, Africa and Middle East. Out of all crops the manufactory of Austin is the biggest one, these stock produce all Dell hardware products. [youtube, (2007)]

Transformation Process of Computers

Generally the change process of computers of Dell are divided in to 7 divisions, Customer order section, Kitting, Build, Software assembly, Final Trials and Labeling, Boxing, Delivery and operate all these divisions effectively it uses various human resources and technology. [youtube, (2007)]

Figure 8

Transformation Process Model

1) Customer Order Section - On this section, the order of customers are electrically transferred to Dell purchases management system and they are transferred to Dell arranging system through their software Stock Planner Maintenance Online where all orders are sequenced into the production timetable every two time and these section act as a brain of Dell processing centers. The machines within the section serialize each part and tracks the order till it is been made.

2) Kitting The various components needed to build orders, supplied by suppliers are taken to this division and then used in build section.

3) Build In this particular division the components are built in in line with the customers need and a individuals readable as well as machine readable barcodes are stick so that it can be used throughout the life of machine and it act as a base for quality system.

4) Software assembly After fitted components, the requests are passed to software assembly division where different types of software are downloaded according to customers need.

5) Final Screening And Labeling After installing special software, the computer s are then transferred to final evaluation and labeling section where, labeling of Dells materials is performed as well as appropriate quality checking is made

6) Boxing And Shipping and delivery After transferring through quality system, laptop or computer s are brought to boxing and shipment centers where additional stuff like screens, printers are helped bring from Dell s combine centers to complete the orders and incorporate them directly into one shipment which is then sent to customers.

The decision of location of vegetable is been done predicated on combinations of four factors, i. e. it locates the flower where it can minimize costs by recruiting cheap labor, common travel and information, productive technology, easy market gain access to and availability of government incentives. [youtube, (2007)]


Additional Operations of Dell to increase customer value (Customer satisfaction)

Dell also works some other procedures which helps it to check out simple and steady routine at each stage and that in essence helps to increase customer satisfaction.

Additional Businesses of Dell Includes Logistics, call centers, marketing and sales and data centers.


Dell s inbound logistics for materials needed to fabricate Computers are handed by the company s logistics companies and in line with the code of carry out of firm; the distributor should use an able logistics company who are able to deliver components properly and at the exact time given.

In circumstance of outbound logistics, it received amount of best vehicles and logistics companies like DHL, CEVA, FEDEX, ODFL, SAIA, UPS and SCHNEIDER which boats the precise order to exact customer at right delivery time or day given by Dell which on the whole helps to increase customer satisfaction. [Dell, (2010)]

Call Centers

Figure 9

Extensive use of Call Centers is made by Dell, for sales as well for technical helps. It tries to establish its call centers near its major customer segments in order to solve ventures of customers and also to increase marriage with them. It generally recruits regional staff for its call centers, to maximize regional vocabulary and telecommunication. A number of the examples of local call centers are,

Bangalore situated in India for Asia-pacific.

Round Rock and Nash well for all of us.

Bra knell established to handle UK customers.

Amsterdam middle for clients of Middle and Central Countries. [Dell, (2010)]

Marketing, Sales and Support

Figure 10

Dell does its marketing through its global head office which directs special announcements to the mark audience worldwide. It wins its clients and creates long- term romance with them giving the very best quality product and services. The ad and other marketing materials that Dell makes to its customers are always simple and correct. [Dell, (2008)]

While the sales service and support centers are located in several countries to be able to provide service to different customers of varied countries. Furthermore to these Dell also assists telephone technical service centers in several countries to solve the situation of customers. So therefore, Dell sales service and support centers are present in 34 countries around the world in urban areas. [Dell, (2010)]

Strength and Weakness of Resource string of Dell;


1. Dell s three source chain strategies are the most basic strength; it helps the corporation to lessen its cost by having minimum inventory, lowering quantity of mediators in distribution channel, helps the client to customize laptop or computer according to their choice.

2. Dell provides very capable processing, distribution process which really helps to offer powerful systems to customers at a competitive price.

3. Usage of latest it in its source string is the major strength of the organization, for case the extranets produced by dell helps it to talk to suppliers at small period of time. It just content the demand on the extranets and various suppliers source needed components by viewing the needs on extranets.


1. If its supply chain strategies helps it to reduce costs, it can also increase s the price of maintenance because more of use of professional technology, more specialised labors work had a need to operate them which raise the costs of maintenance.

2. Dell direct model might create problem for home individual customers, because some customers cannot easily modify pc s relating to their specifications, it could take days to complete it and on the other hands they can t go to any stores if they found any issue.


- Based on the aforementioned analysis following conclusion can be made

Dell comes under the extra sector industries that not makes all the different parts of pc, just fit the components regarding to customers need, markets them. With its three effective resource string strategies, Dell Direct Sales that helped to implement the computer exactly matching to customer s need, Build - to order that helped to cut the additional stock and take advantage of Just In time inventory, Distributor integration that helped to improve and improve the relationship with its suppliers, and with use of most advanced technology at each step of supply string, Dell became one of the successful personal computer maker company in today computer market.

Dell is accessible in such market which varies by global regions and by different countries, but special popular location of making crops in these different parts, countries and its appropriate management coordination, co-operation and powerful technology and staff, helped the corporation to increase its systems from a city of Texas to SOUTH USA, Europe, Midsection East Countries, Africa, Asia etc. In addition to these it also creates customer value by giving price bonuses for certain bundles of laptop or computer or components and after sales service such as competent call centers and IT centers that are located all around the world that have helped the company to deal with numerous technical problems and inquiries of customer which indeed helped to improve the relationship with the mark audience around the world.

Thus if it comes after the same solitary supply chain techniques you won't take longer time for the business to become number one in pc market.

Total Words-3282

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