This paper will look at the supply chain of Dell Incorporated. The rationale for choosing Dell is the recognition it gained for its efficient supply chain. The company's business model is based in five key strategies namely, rapid time to volume, products built to order, elimination of reseller markups, superior service and support, and low inventory and capital investment (Kapuscinski, et al 2004).
Michael Dell, who is also regarded as the computer industry's longest tenured chief executive officer, founded Dell Computer Corporation in 1984. Later in 2003, the company changed its name to Dell, Incorporated. The company is one of the most famous manufacturers of computer worldwide, which caters to the needs of individual and corporate clients with a very unique business concept (About Dell 2004). Dell Incorporated is headquartered in Rock Round, Texas.
Dell, Inc. and its subsidiaries are actively involved in the design, development, manufacture, marketing, sale, and support of a range of computer systems and services worldwide. The main business activity of Dell is in the provision of products and services to customers, which enables them to establish their information technology and Internet infrastructures.
Dell offers a wide array of products and services to its clients. ...
Currently, Dell is the third largest computer manufacturer in the world. During 2004, the company generated a total net income of $41, 444 million. The company also generates employment for a total of 46, 000 employees (Dell Inc. 2005).
Dell's Supply Chain
Traditionally, personal computers were manufactured in large volumes, forwarded to distributors and were sold individually to customers. This supply chain became problematic as it requires a huge level of inventory and small set of configuration for customers. Dell introduced a new supply chain which rests on minimizing the costs of inventory and customization according to a client's specification. Dell employs a just-in-time inventory strategy which allows the movement of inputs only when a customer places an order.
Table shows the flow of material in Dell's supply chain.
The company's supply chain begins when a customer places an order through telephone or online via the company's website. Dell processes the order by undertaking a financial evaluation (credit checking) and configuration evaluations (checking the feasibility of a specific technical configuration). After passing these two evaluations, the order is forwarded to the company's manufacturing plant in Austin, Texas for assembly. Dell's plant notifies the company's suppliers and request the components needed for the customer's specification. It should be noted that Dell takes care only of the CPUs assembly while monitors are directly outsourced from other suppliers (Kapuscinski, et al 2004).
Figure 1. Dell's Supply Chain
Delivery of components to Dell's manufacturing plant in Texas is relatively faster than its counterparts in the industry. It is