Dell Inventory and Procurement

Purchasing and Supply Management

Because Dell allows customization to its consumers they cannot produce before they are given order details. As such Dell must be capable of manufacturing its products quickly and efficiently. Generally this would require high amounts of inventory so that each order can be made to specifications in a timely fashion. Naturally inventory would become a high concern, but Dell has managed to operate without inventory at all. Due to its high-tech software systems, Dell has made it possible for their suppliers to deliver the required materials within 90 minutes of the time the order is placed. As such, Dell is able to operate quickly without keeping any inventory themselves. Furthermore Dell’s software allows its suppliers to keep up with rapid requests by providing constant updates on demand forecasts. [Include rapid asset utilization]

Thus, Dell has invested heavily in high-tech software in order to eliminate the need for inventory, and to make automatic purchases.

* Automated Procurement

Dell makes roughly 1.8 million purchases a year from over 5,000 suppliers worldwide. In order to manage its purchases efficiently they rely on software known as Oracle. Because of the high-tech capabilities of Oracle, the purchasing process is made nearly automatic. From the beginning when the consumer makes the purchase to the end, Oracle handles the data communication and transactions throughout Dell’s facilities and suppliers. Furthermore Oracle operates the functions required to finalize the transaction such as the money transfers from the consumer, to Dell, to Dell’s suppliers. Overall, Oracle eliminates the need for cumbersome human interaction and allows Dell to handle its massive amounts of purchases in an efficient and timely fashion.

Oracle makes all of this possible through its formulistic operations. Firstly, Oracle manages the transfer of money from a consumer through online or in-store transactions. Once an order is made, Oracle...