Logistics Management: A Case Study of Dell Corporation

This report analyzes the logistics management of Dell Corporation, including global manufacturing plants, just in time production, inventory management, outsourcing manufacturing, and maintaining sustainable competitive advantage. It also discusses the concept of sustainability and its implementation in Dell.

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Logistics management
Name of the student
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Table of Contents
Introduction......................................................................................................................................3
Dell Background Information..........................................................................................................3
Logistics Management.....................................................................................................................4
Reasons behind Dell logistics Management Success......................................................................4
Global Manufacturing Plants...........................................................................................................4
Just in Time Production...................................................................................................................5
Inventory Management....................................................................................................................6
Outsourcing Manufacturing.............................................................................................................6
Maintaining Sustainable Competitive Advantage...........................................................................7
Logistic management of Dell and its suitability to other companies...............................................7
Concept of Sustainability.................................................................................................................8
Concept of Sustainability in Dell.....................................................................................................8
Conclusion.......................................................................................................................................9
References......................................................................................................................................10

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Introduction
Supply chain management is a fundamental aspect that ensures the success of business
both as a industry as well as in the marketplace. The business organizations have been capable to
gain a sustainable and competitive advantage by adopting the effective and competitive supply
chain management strategies. The supply chain of the company depends on the proper planning
and implementation of the strategies. In short Supply chain management or logistics
management can be defined as the movement of goods and services that involves the movement
and storage of raw materials, inventory or finished goods from the point of origination to the end
users or a third party medium. Therefore a proper coordination of different interconnected
channels is utmost necessary for the success of the business. The following report takes the
example of Dell Corporation to determine the Logistics management in a much better way.
Dell Background Information
Dell is an American Multinational computer technology company that has its
headquarters in the Round Rock area of Texas (dell.com 2018). The company deals in the
development, selling, repairing and support of the computers and different computer related
accessories. Dell is amongst the most advanced Computer manufacturing Companies of the
world and is reputed of producing one of the most advanced versions of computers among the
other computer companies of the globe. The management of the company excels itself in holding
them as well as their suppliers to a high standard and ensures both responsibility and guarantees
sustainability. The high standards set by the company are meant to ensure a proper respect for all
the employees, customers and the suppliers of the company. The management of the company
ensures full transparency and honest deals with the customers. The company decided to open the
doors of its manufacturing facilities for the customers to see, evaluate and then choose the

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services and products. This has helped them to gain significant loyalty and trust and has helped
them to hold a significant position in the market.
Logistics Management
According to, Mangan Lalwani and Lalwani (2016) logistics is generally the complwx
and diversified organization and implementation of different business operations. The
management of logistics is the part of the supply chain management that plans, implements and
controls the efficient, effective forward and reverse flow of goods and services between the point
of origin and the point of delivery. The complex process that is involved in logistics can be
visualized, analyzed and managed by the implementation of dedicated software. Efficient
management is the key to the success of the organization.
Reasons behind Dell logistics Management Success
Global Manufacturing Plants
The mentioned company has a number of different global production facilities in
different geographical locations of the world which makes it one of the most successful MNC’S
of the world. The management of Dell chooses the location of its manufacturing or development
plant after a thorough and careful consideration of a number of different parameters or the
location specific advantages that these areas provide to the company. The main advantages of
establishing a number of different international operational centers are:
a. Lower labor costs
b. Tax exemption in most cases
c. Proximity of location to large international markets

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d. Reduction in delivery time and better packaging
e. Better Services because of the close location
Though there are a lot of disadvantages of establishing R&D facilities or manufacturing
facilities at new areas of the world, the management of the aforesaid company has impressively
neutralized such risks. The absence of numerous global plants in the organizational set up of
Acer is also a striking difference and clearly weakens the logistical reach of the company. The
company thus has to totally depend on the third party players to supply the manufactured
products to the end users.
Just in Time Production
Just in Time Production Model was a production model implemented by Toyota Motor
Corporation in the early 1960’s. It emphasized the need for just the required equipments, only
the required accessories and only the required time needed for the delivery of a product or
service. The management of Dell inspired them from such a concept and implanted the same
strategy in their organization. However the initial implementation phase saw the rise a number of
different problems within the organizational set up as implementing each of the different things
on time and making them available easily to deliver the products and services on time was an
arduous task for the management (Mangan Lalwani and Lalwani 2016). The management of the
said company changed the approach and started to implement CCID consulting and direct
business model which created a joint model and limited the exposure of any forms of risk. On the
other hand the management of Acer has failed to implement a proper business model while
delivering the products which is one of the biggest failures. The Just in time production process

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is not at all suitable for Acer as it will struggle to meet the pace of the process and will lead to
huge failure.
Inventory Management
The management of Dell has successfully replaced inventory with proper information
which has formed the basis for the logistics chain management of the company. It also seeks to
reduce and manage inventory through the use of information. Such a replacement allows the
organization for a lean supply. A minimum inventory level is flexible enough to adapt to the
changes of the demand and supply process. The following contributes to the reduction in the cost
of the manufactured products of the organization. The company has also stocked up a large
inventory in supply as it helps the organization to avoid any form of risk arising in the supply
chain of the organization. Supply and demand are difficult to predict and is projected to
variation. This makes the supply chain much more risky and absence of a proper inventory can
make the Company vulnerable to external risk. Thus the presence of a well planned and effective
inventory management helps the organization to be a step ahead in logistics management.
Outsourcing Manufacturing
Outsourcing is perhaps the most common strategy is adapted by the large companies to
reduce their operating costs as well as their labor costs (Mangan Lalwani and Lalwani 2016).
Outsourcing has helped Dell to concentrate on their own competencies on how to manage and
maintain an efficient supply chain, customer service, research and develop new products and
redevelop the old products. The management of Dell computers has focused on the

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manufacturing of computers as their main business and thus from a long time the Company has
outsourced the manufacturing of the components and other accessories of their brand. The
company has kept the manufacturing of the main components of the software with themselves
just because they want to avoid any kind of unwanted complications in the manufacturing
process. Outsourcing is thus one of the reasons for success of Dell. Acer on the other hand has
failed to garner much attention in outsourcing its tasks which has made it impossible for Acer to
gain a healthy competitive advantage in the market.
Maintaining Sustainable Competitive Advantage
The maintenance of a sustainable competitive advantage is utmost necessary for the
success of the business. The company can sustain its hold in the market if it can ensure a proper
strategic competitive advantage in the market. The maintenance of a strategic competitive
advantage ensures the stronghold of the company in the market (SEMAHEGN 2017). The
mentioned company has been able to keep the stronghold by reducing its dependency on direct
sales, selling the products through retail channels as well as online selling and launching a
number of different products like laptops, notebooks, computers, accessories and many more as
such. The company was practically forced to develop new capabilities by selling through
different types of channels like retail and online sales (Rushton Croucher and Baker 2014). This
was helpful for the organization to develop more products and regain the lost position. It also
took some extra steps to ensure the best customer service for their clients (Jacobs Chase and
Lummus 2014). It introduced a concierge service for the customers of the organization that
provided personalized and remote services for all their customers. The management of Dell has
also increased its presence in social media by means of establishing direct sales models for the

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customers. Therefore it can be seen that the presence of the competitive advantage in the market
has been a reckoning force for the organization in the global arena.
Logistic management of Dell and its suitability to other companies
The logistics and supply chain management of Dell includes a number of key marketing
channels. These marketing channels of dell contain both the suppliers of the organization as well
as the customers. The company does not engage any intermediaries or third parties in between
them and thus makes the process much faster in nature. The main models of the supply chain
management Direct Sales Model- The direct sales model of the organization does not involve
any of the retailers or the wholesalers for selling the PC’s it produces (Aguirre and Goudge
2014). The following model helps the management of the organization to be in direct contact
with the customers and thus helps to get the correct feedbacks of the customers regarding a
certain product. The direct sales model of the company also reduces the cost and additional time
that is otherwise incurred in other channels. The fact that the products are handed directly to the
customers drastically reduces the price of the materials and reduces the operating cost of the
company.
Concept of Sustainability
Business sustainability is most often defined as the management of the triple bottom line
which is the process by which the companies manage the different financial, environmental,
social and other needs of the business (Christopher 2016). The following approach however is
dependent on the accounting based perspective and is not always dependent on the time element
that is inherent within the business sustainability. The business organizations must adhere to
some strict principles to maintain the flow of sustainable development. There are a large number

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of different business practices that helps to improvise the business sustainability and help the
organization to move along the path of the backbenchers to be the leaders of the community.
Therefore Sustainability is one of the main elements that must be kept in mind by the
organizations to ensure a long run in the market.
Concept of Sustainability in Dell
The management of Dell unlike most of the other companies has taken the sustainability
issues seriously and has an ambitious goal of demonstrating that the social and environmental
benefits of their customers provide to the world by using their different products act supreme
over the footprint of making and using them tenfold (SEMAHEGN 2017). The company has
introduced the concept in 2013 which is also known as the legacy of good is basically a
commitment to ensure the sustainability is implemented in the business by the process by which
they carry on their business activities. The management of Dell also regularly measures the
progress by interacting with the customers. Dell is also involved in supporting the youth learning
and boost information and communication technology skills among the underprivileged people
of the societies. The management has thus ensured a proper and efficient Sustainable process in
place to ensure a great future for the organization (Christopher 2016).
Conclusion
The following report has presented the readers a well constructed study on the different
elements of logistics and supply chain management of a company. The example of Dell has
provided a practical viewpoint to the readers and will help to get a clear and realistic picture of
supply chain management. A thorough analysis of the total report is necessary for the readers to

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get a compact idea of the aforesaid topic. The scope of the report has increased due to the
presence of the both generalized as well as specific sustainability report of the organization.

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References
Aguirre, G.C. and Goudge, D., 2014. LOGISTICS AND SUPPLY CHAIN
MANAGEMENT. Patrick D. Fountain, p.57.
Christopher, M., 2016. Logistics & supply chain management. Pearson UK.
Dell.com. (2018). Dell United States Official Site | Dell United States. [online] Available at:
http://www.dell.com/en-us [Accessed 12 Apr. 2018].
Jacobs, F.R., Chase, R.B. and Lummus, R.R., 2014. Operations and supply chain
management (pp. 533-535). New York, NY: mcgraw-Hill/Irwin.
Mangan, J., Lalwani, C. And Lalwani, C.L., 2016. Global logistics and supply chain
management. John Wiley & Sons.
Rushton, A., Croucher, P. And Baker, P., 2014. The handbook of logistics and distribution
management: Understanding the supply chain. Kogan Page Publishers.
SEMAHEGN, A., 2017. LOGISTICS AND SUPPLY CHAIN MANAGEMENT (Doctoral
dissertation, ADDIS ABABA UNIVERSITY).
Stadtler, H., 2015. Supply chain management: An overview. In Supply chain management and
advanced planning (pp. 3-28). Springer, Berlin, Heidelberg.
Wang, G., Gunasekaran, A., Ngai, E.W. and Papadopoulos, T., 2016. Big data analytics in
logistics and supply chain management: Certain investigations for research and
applications. International Journal of Production Economics, 176, pp.98-110.