The author of this research paper begins with the history of the company. Michael Dell founded the company when he was a 19 year old student at the University of Texas in Austin. He used a basic model: selling PCs to the final customer and built them to users’ specifications. Dell Computer still does it today, the so-called build-to-order scheme, although with some modifications. He started with telephone sales using IBM compatible PCs, and then assembling and selling his own brand. This model provided a 24-hour hotline for complaints and guaranteed immediate shipment of replacement parts, that is, 24- to 48-hour shipment.
The improvements in design and production processes have helped Dell cut the estimated production cycle time for a desktop computer – from beginning of the build process to placement on a delivery truck – to 7 hours (McWilliams, 1997, cited in Kraemer et al, 1999:11). At its newest Austin plant, named Metri 12, sometimes a PC can be built, software installed and tested, and everything packed in a box for shipping within 5 hours (Ramstad, 1997, cited in Kraemer, 5). The customization that occurs in production is carried over to sales and service. For instance, Dell installs custom software on the machines that it builds for corporate customers. It also maintains an inventory of its customers. It seeks to lower the total cost of ownership for its corporate customers by helping them manage their PC inventories and offering technologies that reduce the cost of hardware and software maintenance in networks. ...Show more