Dell Supply Chain

Contents

Executive Summary.................................................................................................... 3
Supply Chain Structure of Dell and Challenges Faced................................................4
Transformation Approach Implemented by Dell..........................................................5
Results Obtained from Dells Transformational Approach............................................6
Critical Success Factors Identified by Dell..................................................................7
Lessons Learnt from the Study................................................................................... 8
Skills Needed in Implementing Supply Chain Segmentation......................................8
Recommendations for Supply Chain Improvement.....................................................9
Conclusion.................................................................................................................. 9
References................................................................................................................ 10
Executive Summary
This report involved a critical case analysis of Dells supply chain and the analysis

revealed that Dell has been highly successful in achieving competitiveness in its supply chain

process. One of the major factors that have contributed towards effectiveness is the direct selling

business model and it is recommended that the company should focus more towards achieving

higher level of efficiency in its performance.

Supply Chain Structure of Dell and Challenges Faced

Supply chain is one of the most important functional areas in any organisation, as it is

primarily concerned with ensuring that the final products are being delivered to the customers on

time. Supply chain comprises of a range of players in the process including the suppliers of raw

materials, manufacturers, distributor, retailer and end consumer. The product flows through this

process and reaches end consumers. However, an analysis of the supply chain of Dell indicates

that the company has a distinctive and separate supply chain process in particular. The company

has a direct selling model which suggests that there is no middle men in the process and the

products are being sold directly by the company to consumers via its website. This reduces the

entire length of the supply chain process of the company, as there are suppliers, company itself,

distributors and end consumers. There are no middlemen in the process and this ultimately

enhances the chances of faster delivery to the end consumers. Thus the supply chain structure of

Dell can be indicated as:

Supliers Del Distrbuo EndCosumer
Challenges: The task of managing the supply chain process is not an easy one, as it requires

proper level of collaboration across all the supply chain members in ensuring that the timely

delivery of the products and services to the final consumers is performed. In respect to Dell case,

it is analysed that the supply chain is usually a shorter one but still it poses significant such

challenges in the process of performing efficient management of supply chain process. The

major challenge is the proper integration of suppliers and customers over the Dells centralised

structured system because there needs to be real time interaction that needs to take place between

customers and suppliers of Dell so that customers can be updated regarded the availability of

products and services with the company. Apart from this, another major challenge noted in this

respect is mainly in the form of distribution of products and services. It is quite crucial that there

should be efficient such distribution that should be ensured by the company in making it sure that

the product reaches customers on timely basis. Because of absence of middlemen in the Dells

supply chain process, this is a major limitation that has been noted in the entire supply chain
performance of the company. These are the major challenges that are evident in respect to the

Dells supply chain performance (Ignatiuk, 2009).

Transformation Approach Implemented by Dell

Dells supply chain process indicates that the direct business model of selling its products

and services as adopted by Dell have a greater level of implication in its performance. There has

been a specific transformation approach adopted by Dell in order to support its business model of

direct selling to its customers. In order to support such business model of eliminating middle

men, there are two major areas in the supply chain that require significant level of

transformation. These are mainly identified as the area of suppliers collaboration in the virtual

platform whereby both the sellers and buyers meet together. This allows Dell in timely

responding to its customers need by way of responding them positively about the availability of

products and services as requested by them. This approach to supporting the supply chain and

thereby the customers requirement have proved to be highly beneficial to Dell in meeting out its

customers need in a positive manner (Ignatiuk, 2009).

Apart from this particular factor, another major factor that has been noted is mainly in

respect to the distribution platform as utilised by Dell. Timely and secured delivery of its

products and services is crucial from the point of view of meeting out its customers need. This is

a crucial factor in online business because customers usually have lower level of belief and faith

over the online model of purchasing electronics items. As a result, it become essential that the

distribution pattern should be sound enough supporting the needs and requirements of the

business in a positive manner. In this relation, it is noted that Dell has a strong network in terms

of tie-ups with courier networks and services. The orders received by the company are being
delivered at the customers address by way of its stronger distribution network system in

particular (Dell and Fredman, 2010).

These are the major transformational approach that has proved to be highly beneficial to

the company in supporting its direct selling model.

Results Obtained from Dells Transformational Approach

With this specific business model and transformational approach as adapted by Dell, it is

revealed that there has been huge level of success being achieved by the company. With this

business model as adopted by the company, the most significant benefit achieved by it is mainly

in terms of cost advantage in its operations. It is examined that there has been the complete

elimination of middlemen from the process, and this has resulted into positive level of outcomes

to the company, as the cost efficiency as achieved by it has proved to be successful in satisfying

its customers requirements positively. Secondly, it is identified that in the declining PC sales

industry, Dell has been able to maintain relevant higher share in the market and this is mainly

because of operational efficiency as achieved by it in its performance. Thirdly, there have also

been the benefits in terms of cost competitiveness because there is no longer need for

inventorying the stock with the company. This factor has also positively supported the

performance of Dell, as inventorying the products cost higher prices to the company in terms of

cost of their operations. All these factors have positively assisted Dell in its performance and this

leads to identification that the results obtained from the transformational approach has been quite

significant to Dell (Ignatiuk, 2009).

Critical Success Factors Identified by Dell

The critical success factors as identified by Dell in its supply chain strategy can be best

described as cost competitiveness in its performance. This is a crucial factor that must have been

considered by Dell in adapting such direct selling model. The focus of the company has been to

provide benefits to the consumers and by eliminating the middle men from its supply chain

process, it has become possible to Dell that the company can transfer the benefits so achieved to

the end consumers. With this approach in particular, there has been the possibility of achieving

significant level of benefits in particular. Apart from this, another major critical success factor is

the attainment of operational efficiency because the virtual system consideration has allowed for

performing the activities quickly and the other processes such as managing inventory levels are

also not needed. These are the critical success factors to the strategy of Dell and they proved to

be highly efficient in achieving higher success levels (Ignatiuk, 2009).

Lessons Learnt from the Study

The lesson learnt from the study is that there is a need for utilising maximum use of

information systems for the purpose of performing the management of supply chain process of

an organisation. This is the best approach that needs to be considered in ensuring that there can

be competitive advantage being possible to the organisation at large. Apart from this, it is also

learnt that Dell has touched that part of the area which has not been considered by others. This

implies that an innovative approach is likely to prove beneficial to the entire organisation and

this is the reason that the company has been successful in its performance. These are the lessons

that have been learnt from doing this study on Dells supply chain.
Skills Needed in Implementing Supply Chain Segmentation

The implementation of supply chain requires certain major skills so that it can be

positively segmented. In this respect, it is analysed that the most significant skill is the ability of

coordination. There is a requirement for efficient level of coordination between different parties

that are involved within the supply chain process of the organisation. Secondly, there is also the

requirement of skills to handle IT systems and processes. This is mainly because the

management of modern day processes requires the consideration of adequate level of ability to

use IT systems that could ensure higher level of success and growth to organisation. This is also

an important skill needed to consider in the process of ensuring efficient supply chain

management (Case study: DellDistribution and supply chain innovation, 2011).

Recommendations for Supply Chain Improvement

The analysis has indicated about the supply chain performance of Dell and this suggests

that there is a requirement for additional level of improvements in its supply chain performance.

The main recommendation to Dell is to provide more importance towards gaining faith of the

users in online mode and secondly, there is a requirement for improved level of efficiency in

respect to integrating more of suppliers so that problems with any supplier could even allow it in

better meeting out the requirements of its customers (Dell Supply Chain, 2015).

Conclusion

An analysis of the supply chain performance of Dell revealed finding that the company

has achieved effectiveness in its supply chain by integrating direct selling model. There are cost
efficiency being possible to it and with such cost efficiency, it has positively satisfied its

customer request.
References

Blanchard, D. (2012). Supply Chain and Logistics: Dell Taps into Innovation to Reach Emerging

Markets [Online]. Available at: http://www.industryweek.com/supply-chain/supply-

chain-and-logistics-dell-taps-innovation-reach-emerging-markets [Accessed: 27

November 2015].

Case study: DellDistribution and supply chain innovation, (2011) [Online]. Available at:

https://www.marsdd.com/mars-library/case-study-dell-distribution-and-supply-chain-

innovation/ [Accessed: 27 November 2015].

Dell, M. and Fredman, C. (2010). Direct From Dell: Strategies that Revolutionized an Industry.

Harper Collins.

Dell Supply Chain, (2015) [Online]. Available at: http://www.dell.com/learn/us/en/uscorp1/cr-

social-responsibility [Accessed: 27 November 2015].

Ignatiuk, A. (2009). Analysis of Dell's Business Strategy. GRIN Verlag.