...Meindl, Dell’s supply chain has been very successful because “The online channel has proved very effective for the sale of computer hardware and by 2009 represented about half the sales in this category. After more than a decade of tremendous success selling its PCs only online, Dell started to sell PCs through retail stores such as Wal-Mart in 2007.” Dell’s online supply chain manages through supplier, Dell, and customer. In addition to the retail supply chain, Dell manages through the supplier, Dell, retail store, and customer. Therefore, they are hitting their targets on every end of the market share by being successful in every way. The main supply chain challenges that Dell is now facing is the low-cost hardware. Chopra and Meindl stated, “For low-cost, standardized hardware, however, the online channel is significantly less attractive because its main strength, inventory reduction through aggregation, is not as valuable for low-cost, standardized configurations.” Therefore, Dell is not strong in this area and they are aware of this. In addition, it appears that Dell is not focused in this area as well. Chopra and Meindl suggested, “Online sales allow Dell to significantly improve its performance for high-value, customized hardware in terms of both responsiveness and cost.” Dell is more focused on their success on what they are doing so well which is continuing selling their high-value customized hardware. In fact, if I was a part of their supply chain team I would...
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...Dell’s Supply Chain Sheila Aninipok Capella University Dell’s Supply Chain is one of the leading computer companies who cater to customer specifications on an instantaneous basis in the world with respect to its personal computer products. The organizations success has been because of its capacity to decrease costs and create a streamlined supply chain management system. Dell is able to offer effective personal computers to customers at a lowered cost plus gives the customers the ability to build a computer with a personalized customer’s specific requirements. This is a direct business model that ensures that computers can be configured according to the buyers’ specifications and directly delivered to them. This strategy helped Dell to become an industry leader for many decades (Chopra & Meindl, 2013). Dell’s model created the conditions for loyal customer base and ensured its success in a competitive industry. One strategy that works for Dell is their online selling system. When a customer goes online and searches for specifics on a computer to fit their application needs, one of the criteria they search for is of course affordability, reliability, and speed (RAM). One of the first computers I purchased myself in college is a Dell. Dell utilizes colleges or universities as one of their marketing outputs. The University collaborated with Dell to give discounted prices to students and for every computer purchased the student received a 15% offer (Chopra & Meindl...
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...1 Introduction A supply chain may be defined as an integrated process wherein a number of various business entities (i.e., suppliers, manufacturers, distributors, and retailers) work together in an effort to: (1) acquire raw materials, (2) convert these raw materials into specified final products, and (3) deliver these final products to retailers. This chain is traditionally characterized by a forward flow of materials and a backward flow of information. For years, researchers and practitioners have primarily investigated the various processes of the supply chain individually. Recently, however, there has been increasing attention placed on the performance, design, and analysis of the supply chain as a whole. From a practical standpoint, the supply chain concept arose from a number of changes in the manufacturing environment, including the rising costs of manufacturing, the shrinking resources of manufacturing bases, shortened product life cycles, the leveling of the playing field within manufacturing, and the globalization of market economies. The current interest has sought to extend the traditional supply chain to include ìreverse logisticsî, to include product recovery for the purposes of recycling, re-manufacturing, and re-use. Within manufacturing research, the supply chain concept grew largely out of two-stage multi-echelon inventory models, and it is important to note that considerable progress has been made in the design and analysis of two-echelon systems...
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...broadcast Wednesday on Dell's Supply Chain Transformation. The team at Dell, from Annette Clayton, VP of Global Supply Chain and Operations, to a number of supply chain, communications and video professionals, was first rate and universally friendly (thanks Bruce Raven). You can see an on-demand version of this outstanding broadcast here: Dell's Supply Chain Transformation Videocast. It was our biggest event ever, and I believe the largest on-line event in supply chain history. We had a huge audience from around the globe. I frankly learned a thing or two. When Dell announced in 2008 that it was moving into the retail business and making other related changes to its supply chain, it really did seem to me like the end of an era. The primary corporate icon of supply chain excellence was giving up on its legendary make-to-order model, outsourcing large swathes of manufacturing, and seeming to move back to the supply chain field it had been previously outdistancing by many lengths. But as many of our readers noted at the time, the customer has to drive the supply chain. There was a significant portion of the market, especially globally, that wanted to buy a different way. To grow, Dell had to expand its customer value proposition to reach different market segments. That required different supply chain strategies across multiple dimensions. Dell wasn't giving up on make-to-order - it remains a multi-billion business - it was adding new supply chain capabilities to serve markets...
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...Analyzing Dell’s supply chain management system Dell’s supply chain strategy is legendary. If you want to build a successful SCM system, your best bet is to model your SCM system after Dell’s. In a team, research Dell’s supply chain management strategy on the web and create a report discussing any new SCM updates and strategies the company is currently using that were not discussed in the text. Be sure to include a graphical presentation of Dell’s supply chain model. When researching Dell’s supply chain management strategies on the web, I discovered new SCM updates and other strategies the company is using to improve business. Dell is leading second in hardware design, manufacturing and distribution; It is lead by HP. The reason for their success is, it has a Direct relationship with customers, it has a low cost and but best value, It’s built to order, it has customized systems and the highest quality and technology. The idea of supply chain management system is one of the most important systems for a PC in business because, the material s for Dell accounts on average for about 20 billion a year. Improving SCM by .1% has a bigger impact than improving the manufacturing process by 10%, and the Technological breakthroughs cause very short Product life cycles. Competitors have falling short to Dell because unlike competitors, 90% of dells supplies are ordered online using integrated websites of suppliers and Dell’s business to business strategy. Dell’s factories...
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...and Africa; and 12 per cent in the Asia–Pacific region. In 2003, a year in which most computer makers lost money due to slumping global demand for PCs, Dell saw its annual revenues jump by US$5 billion to US$36 billion, made US$2.8 billion in operating profit, and gained 2.3 per cent in global market share. By this time Dell had gained, and held for five years, the position of market-share leader. However, during the mid to late 2000s, Dell’s position in the global PC market began to change. In 2005 it lost its market-share lead to one of its main rivals, Hewlett-Packard. By 2008–9, Dell’s second-place PC ranking came under threat from the Taiwanese computer maker Acer. In 2003, Acer had ranked seventh in PC sales around the world, but by 2008–9 Acer’s share of the global market had risen to 11.8 per cent, just behind Dell with 13.7 per cent and HP still on top with 19.6 per cent. The hallmarks of Dell’s early success in the PC market were direct selling and build-to-order manufacturing, underpinned by supply chain and inventory efficiencies. Dell’s cost structure was the lowest in the industry. Dell grew quickly by giving customers exactly what they wanted at a price that no other competitor could match at the time. While Dell outsourced some operations—for example, component production and express shipping—it assembled its computers in its own manufacturing plants. In addition to its four...
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...Crafting And Executive Strategy Assignment 1 Case Study # 6 Dell Inc. In 2008 : Can it overtake Hewlett – Packard as the worldwide leaders in personal computers ? Submitted to : Prof. James Farmer Submitted By : Roshni Patel Student Number : 300686000 Question 1: Dell inc. Began with a ‘winning strategy’. At this time (2012), this strategy is not used to the extent that it was once was and the company is now not the company that it was once. Did Dell’s strategy fails, did the company fail to effectively execute the strategy or did the environment changes around Dell? Evaluate the possibilities. Answer: Dell is a global company that delivers products and services in more than 190 countries and company had given employment to over 4000 employees. The company deals in enterprise computing products, monitors, printers, software and peripherals with a focus on fully integrated improved environmental performance into business. The company had gone through many ups and downs from its inception in 1984 and has to face many challenges and competitors to stay ahead in the market. Dell founded the company with simple vision and business concept that the personal computers could be built and sold directly to consumers which would eliminate the additional cost of intermediaries between the company and consumer and thus reducing the overall cost of the PCs making it cheaper than other PCs in the market. The other advantage was that it reduces the costs and risk associated with...
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...Apple, Acer and Lenovo. Furthermore, its stock price has plummeted from its record 1998 high of US$139.88 to almost US$20.00 in July 2008. Due to poor performance, the founder of the company Michael S. Dell has returned to the company as CEO and has devised a plan to bring back Dell as a market leader in this industry and to improve its stock price. Company’s Current Strategy Vision: To be the world’s leading supplier of computer systems Mission: To enable millions of businesses and consumers to get online for the first time Objectives: Improving Dell’s stock price Corporate/Business Strategy: • Outsource full system manufacturing facilities in China for retail business. • Split product design departments into commercial and consumer teams. • Listening & reaching customers, expanding and customizing their product and service portfolio • Low cost structure - drive costs out of the company’s supply chain and expand into foreign markets • Grow company in consumer, enterprise and emerging markets 1. EXTERNAL ANALYSIS 1.1. General External Environment Demographic: Global commercial and consumer markets; Wide range of income distribution among customers from individual consumers to governments and large corporations. Socio-cultural: Customers value aesthetic designs. Technological: Business liked process of having computers pre-configured to their specifications. Previously customized components have now become the standard in the consumer market...
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...the largest and most popular computer companies in the business today, but they do much more than just make computers. Dell has exemplified the way e-business is conducted and has innovated many aspects of it to fit their own business model. Ranging from online computer sales to tailored corporate customer support, Dell has integrated several methods of e-business, which have given them a cutting edge against their competitors, especially at a rough time for the PC market. First let us look at Dell’s background a little bit. Dell is a technology company that not only sells computers, servers, and networking equipment, but IT services and consulting as well. Dell revolutionized computer sales by becoming the first company to sell products via phone and the internet instead of retail stores. While initially Dell blew away competition using this new approach, competitors have narrowed the gap. Dell currently employees over 103,000 people worldwide and is widely known for its supply chain and e-commerce strategies. Since its launch in 1996, Dell.com has been more than just a website, providing users with top level support, information, and purchasing abilities. Starting in 1996, Dell began to sell computers via their website, and in 1997 was the first company to record one million dollars in online sales. By 2000 Dell was pulling in $50 million a day in online sales. According to Dell, roughly half of the company’s revenue comes from the website itself. Clearly their website is...
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...problem facing Dell Computers is to ensure that consumer demand is being met and that their competitive advantage and value chain are being maintained. Having multiple manufacturing plants is an example how their competitive advantage is maintained and the value chain is operating successfully. Maintaining a lean production practice and providing a high level of Internet based sales in the personal and business sector are two sources of pride for Dell Computers. Knowing their customer needs and thoughts enables Dell to be on the cutting edge of product design and innovations; delivering their products quickly to their customers and at high level of mass customization. Dell Computers has established a strong relationship with all suppliers, which allows the company to maintain only the needed supplies. Having such a strong relationship with its suppliers, allows the company to focus their research budget on the best way to reach the consumer. The desktop, notebook and other production items are not produced until the order is received from the consumer. Corporations have access to a website that has been tailored specifically to their needs and that allows them complete access to all previous orders with ease. The streamlined production process also has significant accounting benefits. The materials are received as needed but the payment for the supplies is not due to the suppliers for up to 90 days later. The most significant disadvantage to the production system is the extra...
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...QUESTIONS 1. Identify and describe all the different types or forms of innovation exemplified in this article by explaining with data and facts from this case. Product Innovation (the development of an improved product) Dell is the only computer company which offers its customers the built-to-order model. The customers can choose which components they want to have in their computer and can adapt it to their needs. Process Innovation (the development of a new manufacturing process) Dell has brought a maniacal focus to shaving minutes off the time to assemble and ship a computer. By studying videotapes of "the build," as they call it, factory managers have slashed in half the number of times a computer is touched by workers. They've counted the screws in a PC and redesigned it so that the major components simply snap in place. The entire process, from the time the order is taken to when the finished PC exits the factory, is wrapped up in four to eight hours. Organizational Innovation (a new internal communication; introduction of a new accounting procedure) Dell has a very good communication. As they standing under so much pressure regarding to the fact that they have no inventory, they have to have this skill. There is even a round-the-clock communication with the parts makers overseas existing, which helped them to handle with the lockout in 2002. Without this communication they had never managed it through it. With the built-to-order principle Dell has also...
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...How do OMM activities create value and a competitive edge at the input, operations, and output stages? A company can add value and a competitive edge at the input stage by choosing the best raw materials possible, the best quality for the best price. A competitor may choose a higher quality raw material but if it costs too much in the end the consumer may not find the value in it. The text uses the example of Amazon selecting the best books for its library. At the operations stage, the business must effectively produce the product by the most efficient means but also maintaining the highest quality. In this stage, the text references McDonalds “a few years ago, McDonalds managed to create a fast-cooking burger machine and installed it in several stores” (Axia College, 2007, p. 376). The problem was the burgers didn’t taste that great. Cheap raw products may not be the best investment if the product in the end isn’t desirable. McDonalds ended up scrapping the machine. Finally, the output stage is detrimental to a business. Getting the product to the consumers when and where they want it is key. Consumers want quality and affordability but they also want convenience. They want to be able to pull through that McDonalds drive thru and quickly grab a great tasting hamburger. Amazon customers want to be able to conveniently pick up a book. Amazon has responded to customers’ desire for convenience by partnering with the Kindle, an online reading tool. Now customers can...
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...DELL SUPPLY CHAIN Green: Typical working of Dell's supply chain The role of SCM is becoming more and more important in today's business wold. SCM is today considrered as a source of competence and innovation. Supply chain management has the objective to have the right products in the right quantities at the right time at minimal cost Dell SC have moved to a more integrated and strategic approach. The key element of his successful business model of the company is its supply chain management. The core elements of Dell’s business model are its direct sales model, usually referred as “direct model”, and the build-to-order strategy. From its very first steps, the direct sales model was adopted: At the beginning computers were sold over the phone and they were built according to the customers specifications. After a short break of using the retail channel from 1990 to 1994, Dell returned to its direct model and grew rapidly. The direct model refers to the fact that Dell does not use the retails channel,wholesaler or distributor but sells its PCs directly to customers through its website. Dell’s Direct Distribution Channel This way it creates a direct relationship with each individual customer.This direct relationship “creates valuable information” about the customer, thus Dell knows who the end users are, what they have bought from Dell and what their preferences are. This “provides Dell with a wealth of marketing and product development information ...
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...1. Examine and analysis Dell’s Direct Model and its basic working and success and future challenges. Dell’s Direct Model Dell has been following it’s unique direct build-to-order sales model for more than 20 years. Customers can plan their own configuration and place orders directly with company via the phone or a web site. Over the years Dell supply chain efficiencies and direct sales gave it a competitive advantage. Dell has also leveraged JIT principle to make its manufacturing process success. Dell’s approach to JIT is different in that they leverage their suppliers to achieve the JIT goal. They are also unique in that Dell is able to provide exceptionally short lead times to their customers by forcing their suppliers to carry inventory instead of carrying it themselves and then demanding (and receiving) short lead time on components so that products can be simply assembled by Dell quickly and then shipped to the customers. Characteristics of direct model * Eliminate costs and risks of carrying large finished goods inventories * High velocity * Low-cost distribution * Direct customer relationship * Build-to-order * Just-in-time manufacturing * Products and Services aimed at specific market segments * Reduced channel costs: from 13.5%-15.5% to 2% of product revenue * Latest Technology was introduced faster than indirect channels * Dell can use IT to directly control its value chain, set quality measures and monitor in...
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...a freshman, providing hard-drive upgrades to corporate customers. In a year’s time, Dell’s venture had $6 million in annual sales. In 1985, Dell changed his strategy to begin offering built-to-order computers. That year, the company generated $70 million in sales. Five years later, revenues had climbed to $500 million, and by the end of 2000, Dell’s revenues had topped an astounding $25 billion. The meteoric rise of Dell Computers was largely due to innovations in supply chain and manufacturing, but also due to the implementation of a novel distribution strategy. 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 I. Statement of the Problem Dell has been following its unique ‘direct build-to-order’ sales model for more than 20 years. Customers can plan their own configuration and place orders directly with the company via the phone or its Web site. Over the years, Dell’s supply chain efficiencies and direct sales gave it a competitive advantage. II. Statement of Objectives * Examine and analyze Dell’s Direct model, its basic working, success and future challenges * Typical Working of Dell’s Supply Chain and future supply chain challenges * Highlights Dell’s evolving Supply Chain practices and strategy and steps being taken by it to recapture its lost market leader...
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