Arasp Biparva Dell Case Write Up 1 Dell s supply chain significantly differs from the brick and mortar model or even most internet retailers of today Dell relies on consumer demand and orders rather than mass productions of its models that are then sent to a warehouse to sit before reaching consumers The firm recognizes that technology is constantly advancing and that any time sacrificed from a product sitting in a warehouse can result in an old product reaching consumers This way rather than pushing their products from production to wholesalers and then wholesalers to retailers and finally retailers to consumers Dell has set an industry standard of a direct link to consumers where consumers pull products directly from Dell A customer has the opportunity to specify exactly what it wants from Dell and pull that product from the website rather than be pushed by means of heavy promotion in retail stores The reversal of flow from push to pull is apparent in other industries and business models as the traditional brick and mortar model has taken a back seat to online retailing and firms that create products to custom consumer specifications 2 Dell receives orders from customers via Dell com Once it processes the order it is handed over to production at the TMC production facility where the consumer specific product is manufactured and then directly shipped off to the customer that ordered it The large TMC facility in Texas has the capacity to build hundreds of computers an hour They end up producing directly on demand and just in time The management must monitor the supply chain operations and logistics of the facilities including things like the time it takes to manufacture each computer proximity to suppliers and shipping hubs as well as the finances involved They must be able to organize similar orders in order to minimize production time and cost If order time is not executed well Dell could end up backordered On top of product back ups a slight mess up could lead to bad press that would further depress sales Moving into emerging markets like India and China Dell must be able to ensure that the order processing system be effective and well executed in order to capture their target markets before competitors move in 3 At Dell a supply chain manager would be responsible for ensuring not only that a product gets from point A to point B as efficiently as possible but to ensure that supplies are ordered and processed efficiently into the end product The manager would have to work to ensure that high quality supplies and raw materials are obtained at a desirable price that the raw materials work in process inventory and goods ready for sale are maintained at desirable levels They must also ensure that these finished products are shipped to the consumer in a timely and efficient manner Appropriate benchmarks must be set for key performance indicators in order to accurately know that the supply chain is improving This is so important to Dell especially with their on demand just in time business model Supply chain managers for Dell need to ensure that their suppliers are located near their production facilities in order to reduce transportation costs and increase speed They must be familiar with modes of transport from their facilities to end users Dell has accomplished economies of scale here in the United States however good supply chain managers skills are in high demand for companies like Dell who plan to expand abroad to emerging markets with unfamiliar territories As stated in the case much of the infrastructure is lacking in emerging markets Unfamiliar territories will prove to be a challenge to managers 4 Good supply chain management can result in a competitive advantage Faster delivery times can attract more market share Higher inventory turnover can result in newer more innovative products reaching consumers Less defective products will result in a higher reputation for quality These are just some key performance indicators use to measure supply chain management Moving into emerging markets these are some focal points for supply chain managers to work on Research has shown that a tighter supply chain will lead to increased value for a company
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