Logistics Management of Dell

This essay discusses the logistics management of Dell, a multinational IT company. It explores Dell's competitive advantage in logistics, the issues it faced and how it resolved them, its strategies for logistics, its unique business model, and recommendations for improvement.

Running Head: LOGISTICS MANAGEMENT 0
dell
LOGISTICS MANAGEMET OF DELL
System
4/19/2019

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Executive Summary
Dell is multinational IT Company, which is situated in United States. It sells maintenances and
support computers and it is related to products and services. The founder of dell was Michael
Dell, it is one of the top technological corporation in the world it employees more than one lack
forty five thousand people. Dell trades in personal computers, servers and data storage as well.
In this essay, the logistics management of dell is discussed. Dell logistics management is one of
its main competitive advantages. Earlier dell had a major issue with the logistics, but they
managed by building their own software named Linux. Apart from this, many logistic strategies
are used by dell, which are unique and different and this helps them to have a competitive
advantage over the other firms. They follow four strategies for their logistics management, which
are moving companies in right direction, special handling, shipping specialization and logistics
and carrier specialization. Dell is a highly successful company and the main reason behind it is
the business model and supply chain, dell is the only company which have direct supply chain
model, it sells the product directly to the customer, it reduces time as well as the overall cost of
the computer. Lastly, there are some recommendations as well for the company so that they can
improve some of their operation, such as it should send surveys to customers to know the
demands of customers and should provide them with a backup system in the computers. All these
things can help dell to become better.

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Contents
Executive Summary.........................................................................................................................1
INTRODUCTION...........................................................................................................................3
Logistics and supply chain of Dell..................................................................................................3
The issue with logistics of Dell and the way Dell fixed it...............................................................4
Dell strategy for logistics.................................................................................................................5
1. Moving companies towards a the right direction.................................................................5
2. Special handling....................................................................................................................5
3. Shipping specialization.........................................................................................................6
4. Logistics and carrier specialization......................................................................................6
Business model of Dell....................................................................................................................6
1. Product and services customization......................................................................................6
2. Supply chain management....................................................................................................6
3. Affiliate marketing................................................................................................................7
4. Online service and delivery..................................................................................................7
5. Quick response......................................................................................................................7
6. Advertising and promotion...................................................................................................7
7. Online services and customer relations................................................................................7
The competitive advantage of Dell and how it became successful.................................................8
Recommendation of Dell.................................................................................................................9
Conclusion.....................................................................................................................................10
References......................................................................................................................................11

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INTRODUCTION
Dell is multinational IT Company, which is situated in United States. It sells maintenances and
support computers and it is related to products and services. The founder of dell was Michael
Dell, it is one of the top technological corporation in the world it employees more than one lack
forty five thousand people (Miffling, 2009). Dell sells personal computers, servers and data
storage as well. In this essay firstly the logistics management and supply chain of dell is
discussed, followed by the issues of the logistics management and the ways dell solved it,
strategies of dell logistics, business model of dell , success of dell and lastly the
recommendation of dell.
Logistics and supply chain of Dell
Dell logistics is one of its main competitive advantages. Nowadays in a competitive world, it is
important for all the companies to have a strategy that can be different from other companies and
attract more customers. Dell logistics is one of its ways of having a competitive advantage over
its competitors Hewlett- Packard and IBM (Sandberg and Abrahamsson, 2011).
Dell has a business model, which is called the direct model, in the direct model Dell sells its
products directly to the customers without the using the retail channel.

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With the help of the direct model, it is able to make good and long lasting relationship with the
customers. They also have different segments of customers in order to approach them easily.
This helps in making the logistics of Dell an easy and unique approach of build to order strategy
(Hill, 2014).
The model success is based on three pillars
1. Keep the inventories at zero
2. To produce until the buyer buys
3. To maintain the measurement of the performance
Supply chain of Dell has the biggest role in the profit generation of Dell’s success. This also has
a very quick product design, construction, assembly, and direct shipment to the customers. The
inventories of Dell have been abridged by the use of the shared information ( Myerson, 2012).
The reduced inventory has given Dell a planned use of information, which has made possible a
good amount of decrease in the time of delivery of Dell also giving it a competitive advantage
(Usoro, 2010; Wilding, 2011).
Some of the strategies of vertical integration that Dell uses are
 Clear definition of what Dell does
 Minimum number of suppliers
 Fast communication system
 More importance to the assets and guarding the assets
 Clarity in what Dell does the best
The issue with logistics of Dell and the way Dell fixed it.
Dell allows the customers with the built to order computer strategy. If any of the supply chain
delays it can affect their revenue. A lot many years ago, the base of Dell was dependent on
UNIX system, which kept Dell’s supply chain smooth after sometime the system showed up
some problems that began to increase instead of stopping. The demand for Dell increased and the
supply chain management interrupted it and hence the issue of logistics problem begins with the

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order. After this, the IT department just had one decision and that was to increase capacity.
(Freeman, 2010)
The lack of capacity is one of the main issues. A lot of the IT professional have to deal with the
headspace running out issue. The main solution to this is adding a server that is bigger but Dell
took a different step and did something unique. The IT department moved away from UNIX and
opted for a new system of operating.
Dell now uses Linux instead of UNIX as its system of operating. Dell’s new operating system
works with six different servers also with the additional recovery disaster systems. It was done so
that of a certain problem occurs only one server will shut down not the entire system. The new
system of Dell can process many data and is more efficient and it makes the new system of Dell
more cost effective and better than the previous one. Dell spent a lot its own time to look and
learn the issues of the logistics and then made the necessary changes every firm or organization
should do the same.
Dell strategy for logistics
Dell is an organization, which manages its transactions and logistics in way that increases the
effectiveness, reduces the costs, and satisfies the needs of the customers. For many
organizations, this is one of the main issues in gaining success and therefore many organizations
are turning for help to Dell (Dekker et al, 2013).
1. Moving companies towards a the right direction
Dell has made and designed systems and established IT strategies for the logistics and
transportation companies around the world. The customers of Dell include all the leading
airlines, cargo carriers and third party logistics providers.
2. Special handling
Dell understand the market challenges and market needs which are linked to a particular
sector of logistics and transportation and also proven to be a track recorder in developing
results driven solutions.

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3. Shipping specialization
Dell helps the business to merge in supply chain tools and create operating efficiencies.
Dell supply chain process integrate the electronic booking with the trading partners in
order to make the procurement process more efficient to provide customers with
sufficient capabilities
4. Logistics and carrier specialization
Dell outshines in end-to-end integration for ordering, fulfillment, tracking and tracing
optimizing invoicing. By increasing the visibility of the demand of shippers the carrier
and logistics providers can predict better and react to the demands in a better manner, the
relationship between the shippers and carriers helps in working functionally and gives an
electronic proof of delivery. Dell has a very effective and efficient way of data
management; it reduces cost and fulfills customer needs (Christopher, 2016).
Business model of Dell
Dell is one of the leading direct selling computer systems company. In addition, it grows bigger
every day. Dells sell directly to the consumer by using the internet. They build products, which
consumers want to order. Dell abolishes the markup and costs them to decrease the risks, which
are associated with the large number of inventories and the finished goods. Relationships with
the customers are also very important (Monczka et al, 2015)
1. Product and services customization
Many Dell online stores are expanded and many online offerings contain customer
reviews and product news in accumulation to catalog of the product. This simply means
that people will be visiting Dell to see the catalogs that can offer some additional
information. This thing also increases the visits on the website (Mangan et al, 2016).
2. Supply chain management
The supply chain of Dell is a strategy to deliver the customers with the customized
quality and low cost computers that are always delivered on time (Ginter, 2018) . Dell
takes the orders directly from the customers by the use of online systems. Then, Dell cut
the cost of intermediaries because that would otherwise increase the cost of the

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computers to the customers. Dell saves a lot of time in processing the orders as well by
dealing with the customers directly. This helps Dell to think for future rather than wasting
its time managing the supply chain
3. Affiliate marketing
Marketing partner means selling the company’s website to the consumers for
commission. Dell provides the opportunity and allows to link with the website to dell.
Com. Dell pays around 2 to 4 percent on the sales that are made by clicking on the link of
dell at the site of partners. Many people can click the link of the website to know more
about dell.
4. Online service and delivery
Dell provides the online delivery services. Online services are those in which the
customers can buy the products through online system and the staff delivers the products
later to the buyer.
5. Quick response
Dell is able to make computers on a fast rate than its competitors. Computers have a good
life cycle and dell enjoys advantage of early to market.
6. Advertising and promotion
Advertising is a very important part of any business; dell provides many different forms
of advertising so that everyone gets attracted to its product and starts to purchase it. Dell
tries to attract new customers by promoting campaigns in order to boost the turnover.
Dell now uses online web for managing it supply chains and to increase the speed and
reduce the cost.
7. Online services and customer relations
E- learning and E -training have become a part of dell both of the services are provided
on the official website of dell and the chat technician is also available for help 24/7 for
the online service and customers can purchase any products online. Apart from this dell
gives discount to the customers if they purchase any more products. The relationship with
the customer and supplier helps in knowing the real time and meet the demand of the
customers quickly also it helps dell to maintain low inventory

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The competitive advantage of Dell and how it became successful
Dell is a multinational company, which is a very competitive in its global strategy, which also
gives company a competitive advantage due to its well-known strategy of direct selling and build
to order approach and strategy. This approach helped Dell to work with the lowest inventory
possible in the industry. The reduction in inventory gave advantage of cost to Dell, even the
wholesalers and retailers reduced their cost for Dell. Dell provided customized products for the
customers to make it more attractive (David, 2013).
Dell has 200 suppliers and it has access to real time automated info for example the trends of
demand and the expectations of volume for diverse components, the connection among the
direct selling model and the suppliers has helped Dell to manage with the demand and supply
well.
Dell operates with the business in the whole world in a lot of diverse marketplaces. Dell has
situated its industrial plants through the world because of the advantages of the location such as
high productive workforce low labor cost etc. Dell location choice also gives it a competitive
advantage.
The way Dell uses internet has revolutionized the company. Dells are very friendly to the
customers and its website is too very customer friendly as it helps the customers to place orders
easily. There is also a customer relation tab on the Dells website, which helps it to monitor the
type of computers the customers are buying. Dell not only uses the internet to make the customer
buying process easier but also to build good relationships with the suppliers.to make the
suppliers work 6 days of inventory the suppliers have to be involved in the company in order to
meet the needs of the customers.
Dell’s e-commerce is a very large part of the competitive advantage. The infrastructure of e-
commerce internet is very advanced and knowledgeable as it helps Dell in deterring the trends
and demands of the products.
Dell has strategic alliance with the other companies in order to sell the products on the Dells
direct selling distribution channel. Dell achieves competitive advantage as it has different supply
chain management. Dell utilizes technology to interpret the information. Dell keeps themselves
involved in the customer buying process and this way are able to deliver according to the

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customer needs and helps Dell in building relationship with the suppliers, which helps in getting
the on time deliveries (Goldmann, 2006).
Recommendation of Dell
1. Due to the high growth in quality completion, it is important for Dell to keep its
competitive edge in the market by offering the new technology product and services.
2. Due to increase in Dell’s global sales Dell needs to add additional suppliers for supply
chain management system (Helms and Nixon, 2010).
3. Dell has a good control in its market but Dell needs to focus more on the domestic market
share
4. Dell should send out questionnaires for surveys in order to know what the customers feel
about their brand, it also build good relationship among the customers and the Dell
5. Invest more in the development and research. Because of the growth in competition of
quality, it is very important for Dell to keep the competitive edge by offering new
products and services. Dell should focus on expansion of product market so that it can
complement the sales of the computers this can take account of particularly designed
systems for specific businesses or some additional hardware’s for markets and it is
important for Dell to study its competitors in order to think of new techniques and
products (Baker, 2014).
6. Dell can offer online data backup capabilities one of the easiest ways to earn revenues is
to offer the existing customers with back-up options on Dell’s servers, this will give
advantage to both the customers and Dell (Rothaermel, 2013; Samson, 2012). For the
customers it would be the most helpful as there data would be safe and they can retrieve
it anytime, and even Dell can be helpful as they can charge for this additional service
(Griffin, 2009).
7. Enhance a customer support services, based on survey results that was done on Dell it as
seen that Dell can lose customers due to the decrease in provision. Dell must focus on
cost benefit study in order to determine if they should spend more into answering people
who can answer the technical queries and can upkeep the consumers through the needs
and the problems. Dell has taken a lot of advantage of low cost labor in other countries
through outsourcing the most of the technical support calls from the US headquarters in

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India and the issue was that the corporate customers did not like the kind of service that
they were getting and hence Dell; should make some adjustments.
8. Increase the recognition of the company through the national campaign of advertising, in
order to maintain the name of Dell in the market. It is important for Dell to consider a
national advertising campaign in order to increase Dell’s visibility. Ads would be one of
the most effective and efficient way to reach a large number of markets (Akpala, 2009).
Conclusion
Dell is multinational IT Company, which deals in personal computers. In this essay, the logistics
of dell has been discussed. The main competitive advantage of dell is its supply chain and
logistics management. Dell has a unique way of supply chain it sells its product directly to the
customers, which save time and cost both. Many years ago dell was using a system called UNIX
and it had some major issues with the system it changed from UNIX to LINUX to run its
operations smoothly. Dell has very good logistics strategies, which are effective, and fulfills the
needs of the customers They follow four strategies for their logistics management, which are
moving companies in right direction, special handling, shipping specialization and logistics and
carrier specialization. Dell is a very successful company because of its unique supply chain and
fast delivery and its unique strategies. However, there are some recommendations that dell needs
to follow in order to perform much better.

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