Dell

Problem 1

Key challenges DELL should be concerned

* Inventory

I. Since DELL keeps very low level of inventory, there might be insufficient inventories to fulfill orders within target time frame due to unexpected delays or fluctuation.

II. Limited inventories might also result in stockout if large amount is needed on-site.

* Skills

I. Field service for large server market needs experienced techinician.

* Cost

I. Large server market requires high quality product, and it might get difficult for DELL to keep low cost.

II. Low cost and lean production might affect product quality.

III. As most of the customers demand 24-7 on-site service, DELL needs to have the inventory and customer service agents wherever the customers are located. This will be challenging since DELL right now pursues low cost, lean philosophy and low level of inventory.

* Customer service time frame

I. Field service problems are dispersed geographically across the nation, and building up the network will be a challenge.

II. DELL needs to keep commitment to high quality and fast response service since large server market demands faster troubleshooting service. The higher end server market is more complicated, and need more careful and knowledgeable service.

III. DELL should try to establish its brand name in large server market, focusing on customer service.

* Others

I. As the industry has high correlation with technology, DELL should balance the cost in R&D compared to other technology leaders in the market.

Problem 2

DELL should outsource the four hour service level support. Since DELL’s current strategy is to keep low cost, low inventory, and lean production, it is important for DELL to keep its competitive advantage into large server market.

Reasons to outsourcing:

II. Large server market has a different model and it takes time and investment for DELL to adjust its current model to accommodate large server market...