Dell Supply Chain Case Study

dingle Supply Chain outcome StudySUBMITTED BY GROUP 7 Neeraj JoshiRaman MangatGaganIntroduction dingle judicature was built up in November 4, 1984. It is an Ameri grass multinational data concept comp all situated in Round Rock, Texas, United States, that creates, offers and backings PCs and related items and administrations. The organization is one of the biggest innovative enterprises on the thinket, utilizing more than 103,300 individuals around the world. The name of its check is Michael dell. He was the most youthful CEO to direct an organization to a Fortune 500 positioning. It generates an income of USD 63.07 billion yearly. The phoner manufactures desktop computers, notebook computers, earnings servers, wager stations, storage overlaps and customization of separately product with the providers being Microsoft for windows, Intel for microprocessors, Nvidia for graphics chips and Sony for the monitors.As discussed in the case study, Dell keeps up a decent joining with the provider (supplier) and help them to center on the innovative capacities to support orifice segments in the light of the fact that in the realm of quick falsify in the innovation , research and development expenses atomic number 18 roughly importantly higher for a keep company to keep up monopoly in their segment. This is the fountain that suppliers be asked to keep a lot sizes and stock as tweakcast as reasonably be expected. Dell always focus on its customer research and ingestion that research to help suppliers and itself. As distant as inventory dilate and new ranges argon concerned, Dell has gain a web page , where suppliers can view assign details and can plan how much and when to provide the product to dell base on actual demand of the consumer, which will decreases the bullwhip effect on supplier end. The main motive of the dell is to work with supplier as a team and to reduce the customer order line and to keep despicable the cede chain. At that p oint with the joint efforts of the whole providers, Dell can provide a large garland of alternatives to their clients and can work to accomplish a quick throughput.FIRST MOVER ADVANTAGEIf we put through on the distribution side dell is mainly dependent on direct sales through internet, in order to call forth income by offerings large varieties of desktops, notebooks and enterprises products. All these argon discovered on companys websites and customers can directly leveraging from it. Even customers can place order from anywhere at any time. On comparing online and retail dell computer purchase, online is cheaper because of the brick and mortar model. In dell company whenever the new product is manufactured at the very(prenominal) time it is introduced over the companys website. Whereas the competing companies firstly stirs the product and whence introduce the product after it reaches the retail store for selling. That is why Dell has an returns of introducing new product early in the market, said to be first mover advantage.DELL OFFERS A BETTER MATCH TO consider AND SUPPLY Dell company has designed its manufacturing and assembling process in such a way that product is manufactured in a parallel of minutes. In this way earlier turnout can be postpone and new product can be manufactured consort to the order received and once new product is manufactured, the postpone production again starts. As it offers modularity and tight scheduling. Whereas the other companies sell their products through retailers and wholesalers and they escort impossible to postpone production.ENJOY CASH FLOW ADVANTAGEThe outgo part is that due to direct sales dell company eliminates the particular(a) cost and margins lead by retailers and wholesalers. Point to note that dell operates at negative working capital as it receive it payments before it pays its suppliers and have it off cash f number one advantage .DRABACKS On the darker part, Dell company prove a high shippi ng cost then selling their product to retailers and wholesalers. In this way dell has to bear shipping cost for each product when ordered by customers, whereas other companies bear large consignment via tucks to w atomic number 18houses and finally then to retailers which is less expensive per unit.DISCUSSION QUESTIONS1. How has Dell use its direct sales model and build to order model to amend its supply chain? autonomic nervous system Dell Companys path of action is to enhance technological capabilities to compete and enjoy continuous leadership. Special Web pages are designed to encourage suppliers to meet customers demand by driving down lead multiplication, lot sizes and inventories. Focussing on their distribution path, Dell offers variety of its component, virtually through the internet leading to increase in their revenue. Customers can choice their products based on their think of choice. Customers can select products during any time by recommending product configurations or customizing them and to a fault based on their purchase history and current needs. groom Sales and build to order model are use by the Dell to build supply chain by synchronizing the process from the starting to its completion. Dell make water products on the basis of their customers order and execute accordingly after receiving the payment. No Products are produced prior to customers order and based on the order procural starts. So first step of the company si to do research of customers taste sensation and then based on it, a design is make which is displayed on the web site. Integration of suppliers is done through web page, which displays the orders that are not yet executed, giving suppliers the vital information to structure their plan based on the requirement. These models have been proved exceptionally useful by drastically decreasing the overall process timing to a couple of hours in comparison to months. Increase in cash flow is also witnessed as the payment is recei ved by the company before fashioning the payment to their suppliers.2. How has Dell exploited the direct sales model to mitigate operations performance?Ans Dell produce products for the customers who have value for choice from different part of the world. Internet played a chance on role in the success of the direct sales model. The Products with high sustenance cycle in an industry face difficulty to compete with dell, who enjoys advantage of early market. Dell introduces the first model to customers in form of a new product. Suppliers are directly linked to the orders, so that they know the meter of components to be manufactured and shipped. The compression of supply chain give Dell a competitive advantage. Depreciation and write off of inventories costs are reduced as Turnover rate of inventory is 60 times per year. Negative cash conversion cycle is operated by Dell by using Direct sales model. Money is received by the company in advance to pay to its suppliers for the compo nents. No stocks are kept and orders are executed based on the customers choice. Sale Price and orders of the product are received by the company, simultaneously, customer also receives the product accordingly to their preference inwardly a short span of time.3. What are the main detriments of Dells Direct Sales vex?Ans The disadvantage of Dells Direct Sales Model is the shipping cost and customer support service cost ,which the company has to bear after the sale is done. Dell bears the direct cost of shipping, as it deals directly with the customer and where retailers have no role to play. Other companies produce and send the products in bulk in comparison to Dell, who delivers small orders singly to customers. Dell bear all the related transaction costs from receiving the order to its execution and after sale services. Direct Sales Model enjoys advantage of cost on the side of production but brings a disadvantage of cost on the side of support.4. How does Dell Compete with a r etailer who already has a stock?Ans The strategy adopted by Dell to compete with retailers, who already has a stock is by providing low price to customers, which is a result of low fixed cost. It also givies customers a chance to customize their product, according to their needs, by giving them virtual display over the internet, whereas in stores the supplies are limited. Dell Produce the products within hours and supplies to the buyers within a couple of days.5. How does Dells supply chain deal with the Bullwhip effect?Ans Supply Chain should be consistent to avoid Bullwhip effect in order to fulfil the demand veraciously and within time with accurate forecasting of demand. Dell constructed web pages where suppliers can forecast the demand of components by viewing the stock available and avoiding the problems related to unnecessary components and products.