Brisk innovation and globalization have produced great opportunities and alternatives in the marketplace for consumers and business organizations alike. Competitive demands have led to sourcing and manufacturing on a global scale, resulting in a significant rise in product offerings. As businesses grow more multifaceted, so as their supply chains. This paper will attempt to describe Dell’s supply chain as one of the most successful and leading supply chain in the personal computer industry, including its processes and material flow.
Comparison and contrast with its competitors, recommendations for process improvement and its ethical considerations will be discussed.
Existing Supply Chain Process Dells’ business concept based on direct-sales and build- to-order has achieved superior performance in the PC industry in terms of inventory turnover, reduced overhead, cash conversion and return on investment. Building PC to order means that Dell must have parts and components on hand to build a wide array of possible configurations with little advance notice.
In order to fill orders quickly, Dell must have an excellent manufacturing and logistics capabilities supported by information systems that enable it to substitute information for inventory.
Order? taking The supply chain process begins when orders come in, mostly from internet/intranet (90%) using the built-to-order model. Integrated with direct to consumer, the system allows consumers to decide what features are needed for their computers before product manufacturing is completed. Dell offer standard models configured by the customers themselves as they generate the orders.
It is called built-to-order as opposed to built- to-stock that requires inventory. Built-to-order significantly lowers financing costs and increases customer satisfaction for Dell’s chosen market segment. Dell records an order, clears credit (as they take no chances) and Demograpic> the competitive rivalry that exists in the PC market globally become one of the threaths to dell’s company. There are some actions that have been taken by dell’s company to respond to the demographic’s developments and trends , such as innovation approach, technology initiatives, flobal product development,etc.
Economics> The computer industry expects a growth of approximately ten percent over the next years. 5 This growth is influenced by the economic situation in a specific country, having an impact on the purchasing power of potential customers. Additionally, changing inflation rates and currency fluctuation also determine the profitability of a company. To respond to the economic development, dell is making and selling low cost , low price computers to PC retailers. Dell is the world’s largest PC maker.
For the last couple years, it has held its position as market leader. Environmental> Dell led firms in the computing sector, Dell scored particularly well in renewable energy use , recycling, and its integration of a sustainability strategy in its business. Moreover, Dell sources about 35 percent of its U. S energy use from green power and app. 20 % globally, and its offers free computer recycling to consumer world wide. Technological> There is hardly any industry that is characterised by a faster technological development than the computer industry.
Increased Research & Development have caused permanent innovation processes which lead to short product life cycles resulting in a faster depreciation of the products Politic and legal> Political factors include government regulations and legal issues determining the conditions under which companies have to operate. In this field, the computer industry has to face certain restraints. Problems can arise in countries where political stability is not guaranteed, no matter whether companies operate production facilities or if they do business with that country through exports.
Many countries still have restrictive policies which are maintained to protect domestic manufacturers and production. Such policies often hinder foreign companies from entering into these markets. The only possibility to do business in those countries is to establish partnerships with local companies, where they are additionally forced to accept minority shares and to provide money and technological know-how. However, the computer industry sees great potential in those countries which loose their restrictions. 4 This is especially true for China which has opened for many industries since its accession to the WTO in 2001.
In the course of globalisation trade barriers decline and new markets emerge, allowing free trade to expand. Cultural and social> The national demand for computers is dependent on the educational level prevailing in a specific country. The higher the educational standard, the higher is the demand. Furthermore, computers get more and more involved in daily life. Today, children already get familiar with the use of computers at a very young age, representing a generation that will hardly live and work without a computer in the future.
Additionally, the brand image of a computer and lifestyle trends get more and more decisive for the purchasing decision. The computer industry adapts to this trend, e. g. by offering a wider range of notebooks and by trying to create a strong brand name. For Dell’s company, this lifestyle can give benefits for them. There are some respon of the Dell’s company to factors in the micro environment. I’ll explain it in this paragraph. Firstly, the market for laptop computers has distinguished its self as the fastest growing segment in the computer industry.
Throught out its growth and development,this market, like many others , has changed a great deal as a result of customers demands. In an effort to carter to these demands, the company like dell look to market trends to aid to the development of new products. In its most recent stages, the laptop has been specifically influenced by an number trends. Secondly, customers are becoming more educated about their purchase so dell believe in creating loyal customers by providing a superior experience at a great value.
Dell are committed to direct relationships, providing the best products and services based on standards-based technology, and outperforming the competition with value and a superior customer experience. Besides, there are many competitors that must be looked by dell’s company. Therefore, to response to the markets, customers, competitors , distribution and dealers, and supplier and facilitators, Dell’s company use direct strategy which selling low cost , low price computers to PC retailers.