Comparison of Supply Chain Management: Dell, Zara and Myer

This report compares the supply chain management strategies of Dell, Zara and Myer. It analyzes the reasons behind Dell's success, the steps taken by Dell to maintain its competitive advantage, and the effectiveness of its strategies.

Running head: COMPARISON OF SUPPLY CHAIN MANAGEMENT
COMPARISON OF SUPPLY CHAIN MANAGEMENT
Name of the Student
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Author Note

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Table of Contents
Introduction....................................................................................................................2
The reasons behind the success of Dell..........................................................................2
Comparison of Dell with Zara and Myer...................................................................4
The steps taken by Dell to main their competitive advantage.......................................7
Effectiveness of the strategies that are used by Dell......................................................8
Sustainability and its relevance to Dell..........................................................................9
References....................................................................................................................10

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Introduction
Dell is a multinational organization of the American origin which operates in the field
of computer technologies. The organization has its headquarters in Round Rock, Texas,
United States. The company mainly sells, develops, supports and repairs computers and
computer related products as well. The founder of the organization is Michael Dell and the
company has been able to receive the position of one of the biggest technology corporations
in the world. The organization employs more than 103,300 people all over the world. The
products sold by the company include, servers, personal computers, data storage related
services, software, network switches, cameras, MP3 players, printers and other electronic
devices (Dell.com 2018). Dell is also well-known in the industry for the innovation that it has
made in the supply chain management related activities. Dell has grown in a huge manner
after its establishment in the year 1984. The company has also received the 51st rank in the
Fortune 500 list in the year 2013. The distribution strategy of the organization is one of the
major reasons behind its success in the industry. The supply chain of the organization has
been able to make the organization successful in the industry in which it has its operations
(Dell.com 2018).
The report will be based on the analysis of the various supply chain related strategies
that are used Dell and has further contributed to the success of the organization. The two
organizations that are considered for comparison with Dell are Zara and Myer. Myer is the
weaker organization and Zara is the company which a has a stronger supply chain.
The reasons behind the success of Dell
The major reason behind the huge success of Dell has been unique supply chain
related strategies that have been used by the organization. The main strategy used by the
company is selling its products directly to the customers and further avoiding the needs for

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intermediaries that enables the product to reach faster to the customers. The organization has
invested a huge amount in the customer relationship management related activities which
have enabled Dell to operate closely with the customers. The use of internet is the key
element of the strategy that is used by Dell. The key attribute of the supply chain of Dell is
the visibility of the supply chain of the organization related to the systems of production and
sales (Beske and Seuring 2014). The warehouse space that is required by the organization is
also quite less as the suppliers provide their products just-in-time directly to the production
line of Dell. These suppliers are the major contributors to the success of Dell in the industry.
Dell is a 57 billion-dollar organization is famous for the supply chain related systems
that have been employed by them. The organization was the first in the entire industry to
introduce the system of configure-to-order or CTO model. This allowed the organization to
offer products to the customers according to their needs. The company was also able to
manufacture and offer products faster as compared to the competitors in the market (Beske,
Land and Seuring 2014). This unique model of the business has helped the company in
estimating the requirements of the customers, forecasting the demands and providing PCS
which are low-cost in nature.
Dell has further introduced the new concept of “Smart Selection” which is based on
the build-to-order or BTO model. This model enables the organization to provide wide
variety of products to the customers. The implementation of this model further changes the
entire supply chain scenario of the organization. The process of direct customer sales has
helped Dell in increasing their wealth of customer intelligence. The company has also been
able to gain competitive advantage in the market with the help of their close customer
relationships (Carter, Rogers and Choi 2015). The close relationships with the customers with
the help if direct sales by the organization also helps in increasing loyal customer base of
Dell.

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The supply chain potential of Dell is enabled with the help of continuous-optimization
framework which is based on the four steps. The cost related to logistics and supply chain
costs up to 2 billion dollars per week and the organization serves more than 13 million
customers. The company focusses on the expansion policies that are related to its global
reach (Ellram and Cooper 2014). The four major steps related to the supply chain
optimization of the organization are,
Assessing the processes of the business.
Designing the supply chain so that customer requirements can be matched.
Enabling the capability.
Stabilizing the situation so that the supply chain works (Fahimnia, Sarkis and
Davarzani 2015).
The major factor that is related to the supply chain related strategies of Dell is the
responsible sourcing of the various raw materials that are required for the production process.
The organization works in a diligent manner to educate the suppliers, the customers and the
investors regarding the issues that are related to the supply chain activities. The company has
worked closely with the suppliers to ensure that the supply chain is conflict in nature. Dell
has continued the supply chain activities in such a manner which is environmentally and
socially responsible in nature (Fernie and Sparks 2014). The suppliers of Dell are diverse in
nature and they need to follow a set of standards and rules to become a partner of the
organization.
Comparison of Dell with Zara and Myer
Zara is a fashion retail organization that was founded in the year 1975 by Armancio
Ortega as an initiative to understand the world in a better way for the fashion products that
are manufactured by him. The first store of the organization was established in Spain and the

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organization has been able to expand its operations since then in the entire world. The main
secret behind the huge success of Zara is its efficient supply chain. The company provides
more than 450 million items within a year. Zara is able to run its operations smoothly with
the help of the effective supply chain activities of the organization. The overarching strategy
is used by Zara to achieve growth with the help of diversification with the help of vertical
integrations (Zarahome.com. 2018). The organization adapts itself to the new designs,
distributes, manufactures and further retails the clothes within almost two weeks of launch of
the original design. The supply chain activities are totally owned by the company and it
competes with the other organizations in the industry to provide fast fashion (Kozlenkova et
al., 2015).
The concept of just-in-time production was implemented in the supply chain of Zara.
A large amount of the entire production of Zara is kept in-house. The organization also
ensures that the factories owned by Zara have around 85% of their total capacity. The process
of in-house production enables the company to be flexible about the frequency, amount and
the variety of the new products that are to be launched. One of the major features that adds to
the efficiency of the supply chain if Zara is the quick response that is provided by the
organization to demands in the market (Meixell and Luoma 2015).
The pull model is applied by Zara to their inventory and supply chain management.
The company creates around 1000 designs per month based on the sales in the stores and the
trends in the market. The customer spending tendency is also monitored by Zara. The number
of batches of fashion apparels that are manufactured by the organization is small. This helps
the company to understand the need for these products in the market. This is also a great way
used by the organization to explore the new designs in the market. The IT systems that are
used to back the distribution centres of Zara are quite strong in nature (Monczka et al., 2015).
The clothes manufactures in the various factories are shipped back to the central location.

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The products are then further distributed to the different countries and the various stores of
the company as well.
Myer is an upmarket chain of departmental store of the Australian origin and they
trade in all the different Australian states. The organization is known for retailing a number if
products including, men’s and women’s clothing, children’s clothing, accessories, fragrances,
cosmetic, electrical appliances, computers, homewares and many more. The founder of the
Myer retail group was Sidney Myer. The growth of the organization had started from the year
1984 and Myer continued to grow thereafter (Myer. 2018). The organization however had to
face low sales from the year 2000 and the customer visit to the various stores also started to
reduce. The organization was going through huge losses from the years 2000 to 2005. The
supply chain related strategies and growth related strategies that were applied by Myer had
proved to be unsuccessful for the operations of the organization. The company was then
purchased by a private equity firm named TPG in the year 2006 (Pagell and Shevchenko
2014).
The acquisition further led huge changes in the supply chain of the organization. a
world-class supply chain related strategy was implemented in Myer. The strategy was done
by the organization with the help of planning and execution. This further included the setting
up of four new distribution centres, four new international hubs which were supported by
warehouse management related process and new inventory and the various e-commerce
related initiatives (Schaltegger and Burritt 2014). The stores of the organization were services
out of Coles Group. The two major strategic imperatives that were faced by Myer include, the
achievement of adequate service with the help of the interim period of the support and
ensuring that the alternate provisions of service were in place. The supply chain capability
needed to be designed so that it was able to successfully tailor the operating strategy of Myer.

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A robust and dynamic supply chain was designed by the TPG Group after 18 months of the
acquisition (Stadtler 2015).
The comparison of the three organizations Dell, Zara and Myer has revealed that the
supply chain related strategies affect the operations and the profitability of these companies
in the industry. The industry or sector to which the organization belongs does not affect this
strategy. The successful supply chain related strategies of Zara that were based on the likes
and the desires of the customers affect the revenues of the organization. On the other hand,
the failure in the supply chain strategy of Myer has affected its growth in a negative manner
which has ultimately led to its acquisition by another organization (Stevens and Johnson
2016). The first step that was taken after the acquisition process of Myer was to improve
supply chain of the organization. This helped the company in growing and creating its new
position in the market. Dell has been successful in its operations with the help of its effective
and on-time supply chain related strategies like Zara. On the other hand, Myer has been
unsuccessful in its operations in the industry due to the lack of a successful supply chain
strategy (Taticchi et al., 2015).
The steps taken by Dell to main their competitive advantage
Dell has been a leader in the computer technology industry for many years. This is an
established brand which manufactures personal computers and caters to the market of the US
and in the other countries as well. The selling method that has been applied by Dell is unique
in nature and the supply chain of the organization is also a major part of the selling process
that is used by Dell. The direct to customer model of business is used by Dell to operate
profitably in the market. This model is also known the Dell Direct and it refers to the
relationship that is built between the customers and the organization. This business model
further helps Dell to focus on the support and service that they provide, the price for the

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customization, latest technology, superior value of shareholder and the performance
(Touboulic and Walker 2015).
The organization has been able to distinguish itself and its operations from the
competitors in the market with the help this different business model. The company is further
able to provide the customers with value for their money as they remove the intermediaries in
the supply chain and are able to customize the products. The major resources of the
organization which has provided this competitive advantage are the latest technologies that
allow the organization to move forward with its superior for of supply chain. The value chain
of Dell allows the organization and its suppliers to interact with each other and further
exchange information related to the various products (Turker and Altuntas 2014). The
organization has been able to use the services that are provided by the internet in a successful
manner and has reduced the costs that are related to production. The company believes in
directly connecting with the customers and understand their demands rather than wasting the
resources of the company. The competitive advantage of Dell is created by the success of the
Direct model. The IT performance of Dell combined with the resources and the relationship
which the organization has with its customers and suppliers adds a huge advantage to the
operations of Dell (Taticchi et al., 2015).
Effectiveness of the strategies that are used by Dell
The strategies that have been implemented by Dell have been effective for the growth
of the revenues of the organization in the computer and technology industry. The operating
plant of Dell is owned by the company itself and this has been one of the major strategies
related to the global operations of Dell. This has reduced the time that is taken for the
completion of production process and products can also reach the customers faster. The

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company also enjoys good proximity to the workforce that is available with the help of this
strategy (Stadtler 2015).
The innovation related strategies that are implemented by Dell with the help of
internet have affected the revenues of the organization in a positive manner. The two major
supply chain strategies that have been used by Dell are, configure-to-order and the process
postponed production. These two processes have been useful for Dell and a similar process
called just-in-time production strategy has also been applied by Zara. This strategy was
successful in increasing the profitability of Zara in the fashion retail industry (Kozlenkova et
al., 2015). The customers are given highest priority by the organizations like Dell and Zara.
On the other hand, Myer has not been successful in implementing this strategy which has led
to the huge losses for the organization followed by its acquisition by TPG Group.
Sustainability and its relevance to Dell
Sustainability is related to the endurance of the processes and the systems. The major
organising principle related to sustainability is the sustainable development, which includes
four domains namely, economics, ecology, culture and politics that are interconnected in
nature. Sustainability is applied by Dell in an active manner in the lifecycle of the services
and the products. The company further aims to reduce the impact of its operations on the
environment and further plays an important role in the driving the progress of human
(Monczka et al., 2015). The ways by which the consumers use the products mainly account
for a huge amount of the footprint that is created by the organization. This is the reason
behind the policies that are made by the organization to improve its value chain.

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References
Beske, P. and Seuring, S., 2014. Putting sustainability into supply chain management. Supply
Chain Management: an international journal, 19(3), pp.322-331.
Beske, P., Land, A. and Seuring, S., 2014. Sustainable supply chain management practices
and dynamic capabilities in the food industry: A critical analysis of the
literature. International Journal of Production Economics, 152, pp.131-143.
Carter, C.R., Rogers, D.S. and Choi, T.Y., 2015. Toward the theory of the supply
chain. Journal of Supply Chain Management, 51(2), pp.89-97.
Dell.com (2018). About Dell. [online] Dell. Available at:
http://www.dell.com/learn/us/en/uscorp1/corp-comm [Accessed 6 Apr. 2018].
Ellram, L.M. and Cooper, M.C., 2014. Supply chain management: It's all about the journey,
not the destination. Journal of Supply Chain Management, 50(1), pp.8-20.
Fahimnia, B., Sarkis, J. and Davarzani, H., 2015. Green supply chain management: A review
and bibliometric analysis. International Journal of Production Economics, 162, pp.101-114.
Fernie, J. and Sparks, L., 2014. Logistics and retail management: emerging issues and new
challenges in the retail supply chain. Kogan page publishers.
Kozlenkova, I.V., Hult, G.T.M., Lund, D.J., Mena, J.A. and Kekec, P., 2015. The role of
marketing channels in supply chain management. Journal of Retailing, 91(4), pp.586-609.
Meixell, M.J. and Luoma, P., 2015. Stakeholder pressure in sustainable supply chain
management: a systematic review. International Journal of Physical Distribution & Logistics
Management, 45(1/2), pp.69-89.

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Monczka, R.M., Handfield, R.B., Giunipero, L.C. and Patterson, J.L., 2015. Purchasing and
supply chain management. Cengage Learning.
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Schaltegger, S. and Burritt, R., 2014. Measuring and managing sustainability performance of
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Taticchi, P., Garengo, P., Nudurupati, S.S., Tonelli, F. and Pasqualino, R., 2015. A review of
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Touboulic, A. and Walker, H., 2015. Theories in sustainable supply chain management: a
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849.

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Zarahome.com. (2018). Zara Home |Official Site. [online] Available at:
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