Dell's Supply Chain Management: Strategies, Issues, and Solutions

This report provides a comprehensive analysis of Dell's supply chain management, detailing its evolution and key strategies. It explores the company's direct sales model, built-to-order approach, and supplier integration practices. The report highlights the issues faced by Dell, such as demand sensing challenges and the impact of its supply chain strategies on cost and maintenance. It also examines the company's logistics management, including distribution models and the role of technology in its supply chain. Furthermore, the report discusses Dell's strategies, including lean and agile approaches. Finally, the report offers recommendations for improvement and concludes with a summary of the key findings. The report is a valuable resource for understanding Dell's supply chain and its impact on the company's success.

Dell
Supply Chain Management - Dell

SUPPLY CHAIN STRATEGY 1
Executive Summary
Dell Company was recognized in 1984 and in today era, it positions among the global largest
computer system corporates. Dell has achieved a huge growth by the means of personal
sealing. Dell has cultivated the way of selling personal computer system straight forward to
the customer according to their needs and want. Dell has also adopted various approaches to
deal effectively in this competitive world. Dell computers include Dell Dimension and
OptiPlex desktop computers, Latitude notebook computers, and PowerEdge network servers.
Various types of the supply chain have been adopted by the dell company to cope up the
competition with its competitors. Various problems were there in the path of the success of
the organization but by the adoption of various approaches they are successful in taking the
tagline of a successful company in the computer system market. Through Dell, the company
has to bring further change as the competition is growing day by day.
Table of Contents

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Introduction................................................................................................................................3
Issues in the company................................................................................................................4
Long-term demand sensing to continually refine its portfolio...............................................4
Logistic management and Distribution model.......................................................................5
Direct sales model..............................................................................................................5
Built To Order....................................................................................................................5
Suppliers Integration..........................................................................................................6
Dell strategy (Dell strategy CTO supply chain strategy).......................................................7
Supply chain strategies of Dell companies............................................................................7
Modification of supply chain strategies.................................................................................9
Risk and Risk management tactics.......................................................................................10
Recommendation..................................................................................................................11
Conclusion................................................................................................................................12
Bibliography.............................................................................................................................13

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Introduction
Logistics and supply administration has become the one of the most core problem for the
organization. Supply chain management combines all the factors such as manufactures,
supplier, transport, whole sellers, retailers, customers and all other main components of the
person whom link above. One of the main objectives is to fulfill customers need and adding
value to the products offered to the customers. Dell realizes the same from starting onwards
should it stated putting excessive concentrate on its logistics, supply chain management, and
direct chain strategies and eliminate indirect supply for the products and result from the same
was that it become one of the most popular portable computers organization in the world (Li,
2014).
Dell was originated by a student when he was a student at the University of Texan, Mr.
Michael Dell. Dell was established on November 4, 1984, in Auxin Texas. From the starting
onwards, Dell accepted its key supply chain strategy of direct sale, firstly the take orders on
the phone calls according to customers’ needs and conditions (KelloggInsight, 2007).
Then afterwards they tried to use the retail-selling channel but the result was not up to level.
So they shifted back to their direct model and grew quickly. Michael Dell's exclusive supply
chain strategies and the fruitful method of using them in rehearsal plays an important role in
the success of Dell's company
Dell wad challenging against giants like IBM, HP, Apple, including 96000 employers all over
the global. The company also deal in HD TVs, Mp3 and other electronic devices made by no.
of the other manufacturers. Dell is well known for its exclusive and advanced logistics and
supply chain management (Holzner, 2006).

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In this report, will study the process of their Logistic management and supply chain
management, Dell strategies, results of such strategies, steps of the company for the
improvement in their work.
Issues in the company
Long-term demand sensing to continually refine its portfolio
Although dell direct model provides help in taking wide customer insights, over 2 million
customers visits per year the company is not able to, assume where the market was headed,
an defining a three-year outlook of customers require an support global customers group.
Dell supply chain strategies help in the reduction of the cost but it also add the cost of
maintenance because of using supplementary of the generalized technology, more dedicated
labors work needs which results in increasing the cost of maintenance which acts as an issue
for the company (Fenton, 2018).
Dell uses direct model supply which can result in a tricky for the home user customers since
some of the customers cannot effortlessly customize PCs rendering to the third specification,
it can take the days and months to complete it and at the same time, they cannot visit the
retailer for their solution.
One of the issues in the company was associated with the company was the faulty Laptop
batteries, which attract negative publicity from the market and gave a negative tagline to the
dell companies. Due which it recall of 4 million laptop batteries in 2006.

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Logistic management and Distribution model
Direct sales model
It can be defined as a verity that Dell owes n t use any retailer or whole sellers for sealing
their PCs but directly contact the customers of taking orders through their website or through
their phone calls and diver orders directly to consumers. This strategy helps the dell to
directly linked with the customers and know about their need i.e. what they want to from Dell
computers.it also help in knowing the last taste of the customers, what they have purchased
what innovation they want in present. They are directly linked with the customers to know
their preferences (Ignatiuk, 2009).
No addition time and cost is utilized in this as delivery is directly made to the consumers.
This strategy helps in providing product development information. Dell upgrades its direct
relationship with the customers and helps in becoming partners. For this, they organize the
meeting with the public according to the population in which customers and various
executives share their experiences with the company.
Built To Order
Built to order strategy is the supply chain strategy whose main emphases on constructing
computers when clients place an order for it. If this strategy is associated to other PC
company, it is very clear that Dell had various benefits compared to others. First of all the
level of inventory is very small so it cut off the cost relating to maintaining inventory and of
the warehouse as compared to others which pay the cost to maintain inventory (Dell &
Fredman, 2010).
Secondly, a very fast response is given to the demand change, as they do not have to hold
until the stock first get finish of and can inform their customers about the innovation which
has a cone in the market and if customers want then Dell will manufacture the same. Other

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than this advantage, dell also gets the benefit of just in time inventory, which benefits in find
out the faulty component and substitute it fastly.
Suppliers Integration
Dell has dealers from all over the worldwide. Some of the examples of the dealers of the dell
are Samsung, Motorola, etc. and all the supplier do they their suppliers accosting in the code
of the behavior made by the dell. The suppliers of the dell are the main element for the
success of the organization. Each year dell keeps an award programme to recognize the eight
dealers who stand best in terms of quality, technology. One of the main aims of the dell is to
diminish the inventory and make best use of the speed (Manataki, 2007).
Therefore, for the same, it loads its suppliers to provide them, material at very quickness. In
order to compact with high inventory speed, the supplier is required to maintain its stock
nearby dell’s plant. At some of the plants, dell follows the system of vendor inventory system
in which compounds of the dealer are kept in jeep and trucks and they are taken out as per the
needs and till that supplier has to take care of the components (Manataki, 2007).
Dell has a close trust relationship way its supplier in command to shift over key data.
Addition to this they also offered the knowledge to the supplier by uses of the internet and
information technology or through its well-known website Valuechian.dell.com which
extranets among its suppliers and dell. Through this website, suppliers can come to know
about the required data, the superiority of component, and if any fault came to know then the
supplier can acknowledge the same and modify it. Other than this, it also gets the knowledge
almost about the part transitions. Thus by this particular way dell is able to share its
production and demand information with the suppliers and eliminate the effect of the
bullwhip (S, et al., 2007).

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Dell strategy (Dell strategy CTO supply chain strategy)
Configure to order represent the capability for a user to outline the component and makeup of
product at the very first moment of gathering the product, and vendor consequently applies
the same component dynamically upon receipt of the orders (Wagner, 2018).
A Configure to Order (CTO) structure is a combination of make to inventory and make to
order operations. It is a set of mechanisms that are built to stock whereas the final products
are accumulated to order. This combination model is most comfortable in an environment
where the time taken for assembling the product is very negligent, while the production lead-
time is very sustainable. Personal Computer (PC) built-up is a good example of such an
environment (Wagner, 2018).
Dell has worked as a leader in the "configure to order" method to manufacturing according to
customer specification.
The use of direct model help in providing the products according to their description and
delivering them at their doorsteps.
Supply chain strategies of Dell companies
Supply chain strategies are the methods, which are associated to logistics.
 Corporate Strategy
 Business Unit strategy
 Functional strategy
The supply chain is the vital part of organization growth. Supply chain strategies help in
development according to the nature of their company (Bozarth, 2006).
Many supply chains are formed according to the above-stated component but there are two
principle strategies, which are used practically

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• Lean
• Agile
Lean strategy is an example of the huge success in the earliest 1930. Its main business is to
add the value to the product or service and eliminate such activities, which do not add the
value in the products. Some of the examples of the lean strategy are Just in time, pull-based
system.
Agile strategies practically concerned with dealing with the uncertainties such as market
demand, terrisiom that affect the environment widely.
Leagile strategy is the combination of lean and agile strategies.
Michael Dell (2007) states, “As we continue to grow worldwide, it is important that we
increase our ability, through the direct model and fully integrate the supply chain into global
organization. This will help in assisting the better quality of the product, quality and cost
which will help in identifying the products from the competitors (Simmons, 2015).
Direct sale
It states that dell does not use the retailer channels and directly sell their PCs through their
website and on calls directly to the customers, which help in eliminating the extra cost to the
customers.
Indirect Distribution Channel of the PC Industry
Dell’s Direct Distribution Channel
It is very much clear that dell through his direct sale creates an individual relationship which
help in defeating competition globally.

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As Michael state that direct relationship heath the market help in value addition of the
product as by this company know each an everything about the customer their preferences,
taste and market condition can be easily identified. As Lawton stated that, this helps the dell
with prosperity of marketing and product growth information.
In case of the large customers the direct connection is converted into virtual combination in
the light of IT and face to face interaction, clients of dell work as a partner for the dell; which
state that dell in not only the vendor of their PCs but one that is three IT department also.
As Michael claim that, there are two minimum services that bring dell closer to its clients,
Premier Pages and Platinum Councils. Premier pages, now called Premier.Dell.com, are
customized as IT department and support sites for the big clients, which help them to choose
about the purchased from the dell. Premier.Dell.com signifies as a modified sale channel and
dell understand about the benefit of the Premier pages and increased to 50000 from 1000.
Modification of supply chain strategies
The organization was first to implement a CTO model where clients have millions of
configuration to modify their PCs according to the customer’s requirement. Dell unique
model has shaped the company in profit making and giving the low-cost Pcs to the customers
(Harsono, 2014).
The one drawback we can say that this organization model takes the delivery time about 7-14
days as PCs is constructed after the order is placed according to customer requirement. In last
quarter fell has exercised a marketplace share loss in order to deal with such condition, Dell
has altered its main principle and developed a new strategy called the “End-user computing”
development plan that contracts with implying its operation, achieving new prospective
customers. Dell is to develop the strategy of smart selection program where it will pre-build
the highly demandable computers that customers want and deliver them within 24hrs. Dell

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has complemented its dell CTO model with the new build to order model. This initiative
forced on the increasing the supply of the warehouse, it results in the broad change in the
supply chain landscape for the Dell. Now they more focus on the warehouse capacity rather
than keeping low inventory. With the incorporating of the various models like BTO, CTO;
dell can modify their SKUs for various counters and channels and achieve growth in the
organization (Parvez, et al., 2018).
Risk and Risk management tactics
There were some of the problem s which are faced by the dell company
The first problem was regarding its competitor i.e. HP. Hp overtook the dell in terms of
providing a cheaper product by managing a good supply chain. This decreased cost of HP and
increased efficiency of supply chain put more pressure over the dell company (Coleman,
2016).
Another problem, which was face by the dell company, was the incensement of the
complexity in the product due to which it was not possible for the company to do direct
supply without the intermediaries. Its direct relation was only one of the defective steps of the
organization, which cannot be compromised, on the first priority.
One of the main aspects of the company is there customers, which can be termed in the
category of; loyal. In order to remain the same trust of the customer on the company started
emphasizing more on the R&D department by which the quality of its product could be
enhanced without any exception.
Also to minimize the risk of rising competition in the market, dell made use of the innovative
technique and served its customers problems in a very technical and personalized solution.

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Another measure which is adopted by the dell company to mitigate the risk connected with
the function of the complexity of the product stated that there should be the molding their
supply chain in such a way it is categorized with the product without any problem and sort
out the complexities connected with the product (Geckeler, 2010).
Recommendation
There are many suggestions, which can be provided to the dell company such as
Dell can look forward to the merger with other companies. Dell should also focus on other
countries, which can help in boosting their revenue.
The company should also focus on the retail store indirect sale. Although they have entered in
the indirect sale, they have to expand their indirect sale in order to achieve huge success
(Geckeler, 2010).
They should improve their product line. Dell launched dell steak but rather than this, they
should launch something like a tablet, which can help mobile phone capabilities.
They should modify the laptop style and frame according to the student state of mind as if
there is an excessive demand for products if dell invites the students. Dell is very slow in
adopting new technologies as related to its competitors.

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Conclusion
According to the above analysis following decision can be made,
Dell come under the category of the secondary sector industries that do not manufacture the
products but fits the products according to the customer needs. With its 3 effective supply
chain strategies, dell took the tagline of the most successful PC maker corporate in today’s
market. Many time dell also0 face recession but they tried to recover from that situation but
we have to keep in mind that dell is the only company which faces the problem of recession.
Although Dell has a cost advantage it has to look in other activities also just to boost up its
revenue.

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[Accessed 17 April 2019].
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