Dell

Dell: High Velocity, Focused Supply Chain Management
What are the Fundamental Reasons for Dell’s Success?
Dell was founded in the year 1983 by Michael Dell, who was at the time a medical student. Dell has since then become one of the biggest technological companies in America. The company has managed to accomplish this through the development of a strategy that is centered on high velocity, focused supply chain management, full visibility and partnerships with suppliers, focused manufacturing and building to order and lastly direct customer contact.
i. Direct Customer Contact
From the inception of Dell building its own machines in the year 1985, the company is perceived to have retailed its products directly to the consumer. This was attained through the removal of any middlemen in the process and ensuring that the consumers get the products considerably faster. In the same manner, it is deemed that Dell has made significant investments in customer relationship management systems so as to guarantee closeness and familiarity with its key consumers. Furthermore, it is perceived that the company has assessed the cost to serve dissimilar consumer segments by means of designing product offerings in view of that.
ii. Direct Communication with Consumers and Real-time Visibility
Dell’s strategy hinges on the internet, which permits the company to directly communicate with consumers and attain real-time visibility of purchasing patterns. Without a doubt, one of the fundamental qualities of the corporation’s supply chain encompasses fully visibility along the chain having linkage between sales and production systems and suppliers that provide constituents just-in-time more often than not directly to the production lines and through very minimal lead times.
iii. Standardization and Postponed Manufacturing
Dell led the way in the market with respect to implementation of standardization and postponed manufacturing. These aspects take into account the production of minimal common platforms, which are subsequently personalized in accordance to the demands of the consumers. Imperatively, through the approach of standardization, the amount of dissimilar product lines upstream declines significantly and products are organized in the downstream end the minute the orders of the consumers are visible (Sehgal, 2011).
What should Dell do next to maintain its competitive advantage? Is its business model still viable?
There are different actions that Dell needs to undertake in order to maintain its competitive advantage. One of the fundamental actions that the company ought to undertake is to capitalize on its distribution strategy. It is imperative to note that with the increasing capability of cutting out its middlemen implies that the company will ensure that its products get to the consumers considerably faster. Secondly, the company should make use of the internet to generate major revenues through e-commerce. The main reason why this will facilitate a competitive advantage is owing to the reason that initially the company attempted to retail its products by means of retail stores like Wal-Mart and Best Buy, which ultimately failed to be an efficacious endeavor as the profit margins attained were significantly low. Therefore, by focusing on direct selling and using the internet to generate sales implies that the company can attain significant revenues on an everyday basis. Furthermore, the internet can be capitalized on by the company to have an even stronger visibility. This will enable the company to have a progressively more direct communication with the consumers and therefore augment its image to the general public (Dell and Fredman, 1999).
The business model is still viable. One of the key advantages of this business model is that mutual components are shared across product lines and as a result diminishing the number of stock keeping units that has to be carried. Notably, this business model is deemed to be viable as it is applied by companies in other different sectors including Audi, Skoda and Volkswagen within the automobile business sector and also other companies such as Zara and Benetton within the fashion business sector. Imperatively, this business model employed by dell is feasible and practical in other business sectors where the level of demand is volatile and also where the profit margins are negligible and tight (Mangan, Lalwani and Lalwani, 2016).
Will the Dell Formula work elsewhere? If not, why not?
The Dell formula can without a doubt work elsewhere. In the company’s formula, not only are the sales conducted directly to consumers, but at the same time production is solely instigated when an order is placed by a consumer. This will be beneficial to other companies or other sectors for the reason that it diminishes the likelihood of excess production, which can end up being waste. What is more, another aspect of Dell’s formula is that it lays emphasis on service delivery together with technical help, through the use of both telephone and house calls. This is beneficial and applicable to other areas for the reason that customer service and customer satisfaction are important in ensuring that there are high sales and also there is an established and loyal customer base. In addition, the company lays emphasis on the most recent and cutting edge technological progressions and as a result have higher added value. This approach is applicable to other sectors and companies owing to the fact that consumers appreciate products with added value (Shimizu, 2005).











References
Dell, M. & Fredman, C. (1999). Direct from Dell : strategies that revolutionized an industry. New York: HarperBusiness.
Mangan, J., Lalwani, C., & Lalwani, C. L. (2016). Global logistics and supply chain management. John Wiley & Sons.
Sehgal, V. (2011). Supply chain as strategic asset : the key to reaching business goals. Hoboken, N.J: Wiley.
Shimizu, T. (Ed.). (2005). Strategic Alignment Process and Decision Support Systems: Theory and Case Studies: Theory and Case Studies. IGI Global.