Dell

Dell: High Velocity, Focused Supply Chain Management

1) What are the fundamental reasons for Dell’s success?

According to the case in the textbook, Dell’s success was due to ‘its expertise in supply chain management and the velocity with which it is able to process and deliver orders’ . Dell’s supply chain management was very efficient and effective because it eliminated middlemen/intermediaries to deliver its products straight to the customers in a quick and timely fashion, even when using a just-in-time model, compared to its competitors . Dell was able to reduce/limit warehouse/inventory holding cost which enable Dell to focus more on customer relationships by investing in customer relationships management systems.

Another reason why Dell was successful was due to the internet because it made Dell more visible to the public and its customers in which Dell is able to communicate with customers directly and get real-time data on purchasing patterns. The internet also enable Dell to have full visibility along its supply chain by linking suppliers to its sales and production systems. By linking to suppliers, suppliers are able to receive the order quicker and supply Dell with the components faster. According to the case, the suppliers are able to supply the needed component with a very short lead time to the production line. As a result, Dell's suppliers are another reason why Dell became successful because they not only can provide the needed supply in a short period of time, the quality and/or technolgy of the supplies are good and the cost is not too expensive which gives customer added value.

2) What should Dell do next to maintain its competitive advantage? Is its business model still viable?

In order for Dell to maintain its competitive advantage, Dell will need to keep price fairly low. As we can see today, Dell's business model on providing customized computers and using a just in time model to eliminate middlemen is not viable in today's society...