Dell Computer Companies
Dell Case Study
Dell happens to be one of the largest computer companies in the global market. There are many contributing factors that have paved the way for this company’s great success. Its financial success is a result of Dell’s ability to implement a direct-sales model in the company’s business strategy. Most computer companies have inventories at retail stores, which restrict the customer’s ability to personalize the product. Since Dell uses direct sales, every product is made to the customer’s own personal preferences and elevates the company from selling old products at a discount. The ability to have directs sales led Dell’s to success, but the supply chain in this direct-sales model is a contributing factor in the company’s performance.
Supply chain is the flow of products and services from the raw materials through when the ending product reaches the customer. As for Dell’s supply chain, it is first initiated when a customer places an order for a product. Once the order is placed, it only takes Dell’s manufacturing plants approximately eight hours to completely assemble, test, and package the finished product. The ability to do this is contributed by Dell’s supply chain management. Since the manufacturing plants are located in Austin, Texas, the company requires all suppliers to keep inventory on hand in small revolver warehouses located near the manufacturing plants. The depth of their supplier base allows them to have the manufacturing components when needed and allows for the suppliers to restock the revolvers every few days.
Although Dell does not decide how much inventory the suppliers need to order or when they need to order, the company does illustrate great supplier relationship management. Dell collaborates with its suppliers by setting inventory targets and evaluating their ability to maintain the target inventory level in the revolvers. Each supplier gets evaluated quarterly