Dell Inc. Supply Chain Management: Strategies, Flows, and Challenges

This report provides a comprehensive analysis of Dell Inc.'s supply chain management, highlighting its key strategies and operational processes. The report begins with an overview of Dell's business model, emphasizing its direct sales approach, build-to-order strategy, and supplier integration as core elements of its success. It then delves into the key flows within Dell's supply chain, focusing on customer and employee relations, direct sales, and supplier partnerships. The manufacturing process is examined in detail, including customer order processing, kitting, build, software installation, testing, and shipping. The report also discusses logistics, inbound and outbound functions, and the role of call centers. Furthermore, the report identifies the importance of supply chain forecasting, R&D investment, and competitive advantages. Finally, it addresses challenges such as system complexities, marketing strategies, and environmental sustainability, providing recommendations for improvement, including enhancing the direct online ordering system. The analysis underscores Dell's strengths and weaknesses in its supply chain operations and provides insights into its future development.

Running head: SUPPLY CHAIN MANAGEMENT 1
Dell Supply Chain Management
Name
Institution Affiliate

SUPPLY CHAIN MANAGEMENT 2
Dell Supply Chain Management
Introduction
Dell Inc. is one of largest computer companies in the world where since it was
incorporated in the year 1994 it has continued to maintain its stand as one of the best technology
companies. Dell main supplies include personal computers (PCs), computer peripherals, data
storage devices, servers, network switches, MP3 players, cameras, HDTVs, software, and many
other electronic gadgets and equipment (Schmidtberg & Leshuk, 2010). Currently, Dell is
considered as number 1 shipper of PC in the world where the company has employed over
103,300 people all around the world. Over the past few decades, the change in technology has
continued to occur where this has impacted a lot of changes in Dell supply chain management,
especially in the millennial and/or digital age.
Dell supply chain management is considered as the main pillar of success in the company
business model. The main element that is applied by Dell is its “direct sales mode” strategy. The
idea of using this mode is to have the ability to bypass dealers in the market and by this dealing
directly with customers (Spearman, 2011). Through this, the company has been able to continue
with its customization aspect where customers are able to order specifications of the product.
This strategy has continued to offer Dell a great competitive advantage over its competitors. The
direct access to its customer information has also enabled the company to improve on its supply
chain while forming a partnership with other large companies such as Sony.
The Key Flows of Dell Inc. Supply Chain
Today customer and employee relation are one of the most important elements in every
supply chain management. With this, Dell success has been largely contributed by basic features
which have significantly helped the company to cope with the increasing competition in the
market. These three elements comprise of Direct Sales Model, Build-To-Order, and Supplier
Integration (Kiron, Kruschwitz, Haanaes, Reeves, & Goh, 2013).
Direct sale model has been a Dell custom which has been embraced over years and it has
also gained popularity in its effectiveness to maintain a competitive advantage. Direct sale model
is used as a platform to encourage the direct relation of the company with its customers.
Customers are able to request straight orders to the company through the Dell website. Through

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the model application, the flow of information between Dell and its consumers is enhanced
where the company enabled on the ability to measure the strength and weakness of its products
and services. With this kind of data, Dell supply chain has been continuously improved in
various aspects i.e. manufacturing, transportation, and other areas meant for improving its
competitive advantage in the market. On the same note, Dell has upgraded its relationship
development where it established virtual system integration which allows effective participation
of customers, employees, and the entire company management in making important decisions in
the company (Spearman, 2011).
Another important element of Dell supply chain management is “Build-to-Order”
strategy. This strategy is used by the company as a more effective approach in the direct sale
model. The company uses a build-to-order model only to provide the requested products and
services (Dogan, Najmi, & Raman, 2010). One of the main benefits of this approach is the
reduced cost of inventory. Through the various types of requests, Dell is able to acquire a high
degree of inventories with less struggle of maintaining its innovative capability. By monitoring
the incoming request, Dell is able to track demand changes and various types of defects which
need to be replaced or corrected quickly.
Dell supplier integration refers to the relationship maintained by the company thus to also
maintain effectiveness in its supply chain. The suppliers are considered to be significantly
important in the company internal success. The selection of Dell suppliers is based upon the
ability to deliver value-added gears which will help improve the performance measures of the
company. The main objective of this strategy is to maximize the speed and also minimize its
inventory. For example, if a consumer orders 15,000 PC’s which should be delivered in 2weeks,
the company will be able to deliver quality products in 2 or 3 days (Kiron et al., 2013). Some of
the key suppliers of Dell include Sony, Samsung, LG, Motorola, Microsoft, and other large tech
companies. This approach helps Dell to avoid ‘Bullwhip Effect’ by sharing demand with its
suppliers. The company has also established an open platform which can be reached by all
respective suppliers in the approach of promoting continuous improvement in different stages of
manufacturing (Ramachandran & Chen, 2012).
One of the features Dell has not been able to achieve in establishing itself as a world
leader in the technology industry is the ability to integrate its direct shops all around the world.

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With the effective recommendation of this approach, Dell will be able to enlarge on its market
share and its dominance in the market.
Dell Inc. Make Process
Generally, the manufacturing plants of Dell are redistributed by regions. The number of
plants per region is determined by the size of the market which is estimated to be served. For
example, North America is served by four major manufacturing plants which are Texas, Austin,
Tennessee, and Nashville. The manufacturing process of Dell Inc. has majorly categorized in
seven (7) different sections which follow in the order as follows; Customer order section,
Kitting, Build, Software installation, Final Testing and Labeling, Boxing, and Shipping
(Menninger, 2014). The first process in the transformation process is the customer order section
where customers are able to order electronically. After a successful order application, the orders
are monitored through software Factory Planner Maintenance Online from Dell orders
management system, scheduling, to the final product. Kitting is the stage where all the required
components in the manufacturing process are assembled. This involves all the major suppliers
participating in effective completion of different manufacturing stages (Zafar, 2010).
The ‘build’ stage is the main point where customer orders specifications and designs are
implemented. This stage is considered to be significantly important as meeting the consumer
needs is number priority of the entire supply chain management. It at this point the quality of the
machine life is traced through the installation of machine-readable barcodes. The following stage
includes the installation of software’s which should be able to support and meet the consumer
specifications (Autry, Goldsby, Bell, Moon, Munson, Watson, & Jayaraman, 2013). This stage
also includes the improvement of the company software and drivers by updating with the current
features in the market. After the installation of software’s and drivers, the final manufacturing
stage includes testing and labeling. Customer order requirement is then crossed checked before
packing and shipping the products. The feedback information of the delivered products is also
significantly important where Dell has managed to emphasize their review thus to improve on its
strategies (Dogan et al., 2010).
The issue of logistics in Dell is broadly distributed into inbound and outbound functions.
The inbound logistics are largely handled by Dell suppliers who according to the company code
of conduct are supposed to use dependable companies which can be able to deliver various

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products in safe and sound conditions. On the other hand, outbound logistics are handled by the
company itself where it uses some of the most decorated companies (such as FedEx, DHL,
SCHNEIDER, CEVA, SAIA, ODFL, and UPS) which can be relied upon effective delivery and
required customer service satisfaction. Another important department in Dell makes process is
the call centers (Kernodle, Davis, & Peck, 2011). The call centers are considered to be very
important since it’s here where the company is able to access various orders and most
importantly maintain customer relationships. The setup and distribution of the call centers are
done in accordance with different customer segmentation and presence of various barriers such
as language which needs to be attended.
Compared to the Dell competitors such as HP, Apple, Lenovo, Microsoft, and others,
Dell has a very poor marketing strategy. Therefore, the company should re-evaluate its
marketing approaches which should include rebranding the entire company image with an aim of
selling out its product and increasing the awareness of the company supply chain strategy
advantage (Sodhi & Tang, 2012).
Supply Chain Forecasting
Despite the significant success in its key supply chain approaches which are meant to
boost the company innovation strategies, it’s significantly important for Dell to invest intensively
in its R & D department. The department will be responsible for the continuous improvement
strategies and the enhancement of product quality. A good example of R&D development focus
for Dell should be the production of sustainable products which will be able to solve the
increasing issues in the society such as energy saving (Gil, Gangopadhyay, Zhou, Gordon, &
Nayak, 2011). Competition is another increasing issue in the technology industry where the level
of entry in the market is very high. To maintain and enhance its position in the market, Dell Inc.
should utilize its strategy in offering personalized service which will enhance the company
market share and competitive advantage. One advantage that Dell has over its competitors is the
ability to control and maintain customers (Gupta & Dhingra, 2012). Dell customers can be
largely grouped as loyal customers whereas for the other companies such as HP and Lenovo can
be easily persuaded to changing brand use. Through this platform, Dell has a chance in achieving
market dominance and control.

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Through the increasing effect in globalization and industrialization effect, the
maintenance of supply chain functioning is considered as a vital task in the company
management. Apart from benefits such as improved response in Dell supply chain, still the
system has a lot of various weaknesses in its distribution network. For example, the system has
failed to consider the fluctuating forces like political and economy which have a significant
impact in the supply chain efficiency. In order to solve this issue and any future challenges on
the same matter, Dell should be able to apply improvement models like the Six Sigma, Total
Quality Management (TQM), ISO, and others (Chalamcharla & Kunte, 2012). The concern of
system complexities should also be reviewed where in accordance with the changing market,
customers are expected to visit easier with less complexity and enhanced efficiency. Also,
retailers, wholesalers, and other intermediaries have a vital input in marketing aspects of any
company and since Dell has stood on its point in eliminating these entities, it should be able to
have a more stressed marketing strategy that will be able to capture the needed output.
Another topic that has gained increasing popularity by each day is the issue of climate
and environment sustainability. As stated earlier, Dell should increase its R&D approaches in
developing inventions which can improve the company operation. For example, Dell should
design a sustainable logistic plan that will able to eliminate carbon emission and also reduce the
amount of fuel consumed (Davis Jr & Doset Jr, 2010). The other important factor that must be
achieved by Dell is the minimization of errors in its direct online ordering system. The system
should be basically improved in the approach of enhancing customer experience where apart
from the ability to confirm orders, the customer should be able to monitor the entire supply chain
process and also have the ability to request and necessary changes in the system stages.
Conclusion
In summary, Dell is considered as one of the most successful companies in the
technology industry and to be specific as a PC maker. Majorly the distribution of Dell
manufacturing plants is characterized by various factors which are able to offer the company a
competitive advantage against its competitors (Dvorak & Katari, 2010). The main element of the
Dell supply chain is aimed at eliminating any form of middlemen in the supply chain system
where the company has emphasized the maintenance of the effective relationship between
consumers and its suppliers. The approach has been successfully applied by Dell where it has

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contributed significantly to the innovation process and the company capability in coping with the
continuous changes in the industry (Gil et al., 2011).
Through effective communication integration, Dell has an incredible platform which can
be used to improve the supply chain system. Unlike in the current strategy used by Dell, the
company should focus on improving the R&D department where the coordination of inventory
velocity should be also applied in supplier’s plants. In order to face the increasing competition,
Dell should improvise on effective marketing strategies that will help to improve on company
market control (Johnson, Li, Phan, Singer, & Trinh, 2012). With this in mind, I believe through
the application of the above recommendations, Dell Inc. will be able to significantly improve its
supply chain management and at the same time enhance its market value.

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