In this assessment I have decided to investigate the supply chain management (SCM) of Dell computers. Dell Computer Corporation was founded in1984 by Michael S. Dell founded. At present Dell Computer Corporation is one of the main manufactures of computers and computer related services in the world. Dell Corporation employs approximately 34,400 people globally, and has operations worldwide. Within the short duration of the company existence, Dell Computer Corporation has created strategic competitive advantages over its competitors in the PC market. Dell has also created respect from other industry leaders.
Dell’s net revenue almost doubled from 1999 to 2008. It increased from $18 Billion to more than $40 Billion. In addition Dell’s market share is strong and ever increasing. It currently holds 17% of the global technology hardware market and ranks 1st in market position. Dell holds 29% of the United States market and currently no. 1 in the market position. Currently Dell sells 50 Million worth of merchandise a day through the Internet (www. dell. com). The personal computers market refers to the development, manufacture, and sale of personal computers and related computer components.
The PC/Laptop global market is highly competitive especially among major companies like Hewlett Packard (HP), IBM and other rivals. These rival companies account for almost 40% of the PC Industry sales globally. The growth for the computer industry will remain strong and so Dell will always faces major competition worldwide. By doing a SWOT analysis i. e. Strengths/Weaknesses/Opportunities/Threats of Dell, I can reveal my findings that Dell has several strong core competencies within the company. Dell’s supply chain management is one of the main strengths the company has.
It can be said that many companies have tried to imitate Dell’s just-in-time supply chain; however they have not been able to gain the same sort of success that Dell has encountered. Dell has the advantage of having well-built relations with its suppliers resulting in excellent compliance in the supply chain process. Another positive aspect of Dell is its strong brand recognition, which has benefited the company very much. Although Dell does not have many weaknesses some areas which can be stated as weak are that it has not developed a server that can match others competitors i. e. AS/400.
Also the direct approach of selling PC’s is not always favored by consumers in some parts of Europe. It is obvious that Europe has a very large market; so Dell needs to be able to attract and sell to these consumers in a manner that they will respond to. However Dell was initially one of the first firms to offer customized built and direct marketing of computers. The company has continued to implement new technology, venture into new markets and look for opportunities. Dell has the opportunity to take part in the wireless technology; they can discover new methods in which to sell their products in developing areas across the globe.
Dell needs to be opened minded and take part in the next evolution within the technology world, in order to keep reaching for their set goals which were stated previously. Nevertheless Dell does have one serious threat the reason being; in order for Dell to stay competitive they need to develop more consulting services to corporations and large buyers not just the individual consumers. There is also the possibility that another individual or entrepreneur will have a revolutionary idea and that can change the whole industry once again.
I believe that the method in which Dell has expanded its company was by having a successful, innovative distribution system. The strategies used gave the firm competitive advantage over other rivals, for example by using a number of suppliers efficiently, integrating a factory planner solution for manufacturing, installing web-based services for not only consumers but suppliers as well, and notably operating with a Just in Time (JIT) supply chain management system. Effectiveness of systems, policies, and processes for web-based transactions:
I will now discuss how the strategies mentioned above have been employed into the firm, and how they have assisted in the growth and well running of Dell. Dell is an excellent example of a company that has consistently worked to improve their supply chain management, by reducing the costs of their products and making it more viable for the consumers. In addition Dell has decided to utilize multiple suppliers, which as a result thoroughly helps to provide specific components required for each computer ordered, within the necessary time period.
Dell calls this its Factory Planner Solution which manages 250 suppliers, who handle 4000 components. This structure enables them to calculate schedules, estimate surplus parts in the factory and in the supplier inventory, and assists in placing orders that are delivered within the required departments, in reasonable time. The current manufacturing infrastructure via Information Technology (I. T) integrates the Factory Planner with five systems which are DOMS, WTCS, EMPACT, valuechain. dell. com, and ODS.