Analysing and evalution supply chain management Essay Example

and Lang, 2002). In contrast, companies like HP, IBM, Compaq, and Acer rely on market expectations when launching their products.The warehouse stored the goods and then distributed them to retail merchants who added a 20-30 percent markup before selling to consumers. The value chain was divided, with manufacturers controlling the upstream and distributors and retail merchants controlling the downstream (Govindarajan and Lang, 2002).

Dell reengineered the traditional value chain of the PC industry by eliminating intermediaries. They outsourced peripherals but assembled them in-house. Instead of relying on distributors, Dell shipped directly to consumers using personalized orders taken through the internet. This approach reduced resource wastage and transformed Dell from a product-focused industry to a service-oriented one.

The Dell Direct Model aimed to increase speed and minimize inventory. It involved high-speed, low-cost distribution, direct customer relationships, build-to-order, just-in-time manufacturing, and products and services tailored to specific market segments (Mendelson, 2001).

Analysis of supply chain at Dell:

Porter (1980) emphasized that a firm's primary value chain activities include inbound and outbound logistics, marketing and sales, service, and operations. Implementing these activities effectively and efficiently can lead to a significant competitive advantage. In the case of Dell, Time Based Process Mapping (TBPM) was used to analyze its supply chain. TBPM is a tool for visually representing and analyzing the interconnected processes that make up the supply chain and product introduction processes in relation to time (Mena, 2010).

Process flow at Dell:

Dell follows a build-to-order model where the customer places an order. Thin manufacturing and Just-in-Time production are then carried out (Manataki, 2007). Once the customer order is recorded, the manufacturing department receives composition details, and the assembly of components takes

place. After configuration, the desired software is installed, and the final product is then dispatched to the customer.

Identification of process steps:

The time-based process map was created by identifying value-adding and non-value-adding activities.

Time Based Process Map: Analysis of a clip based procedure map:

The measure "Create computing machines to order" corresponds to the planning and specifying of the demands of the merchandise and procedure by Dell (1st measure). To purchase the necessary mechanisms from its providers (2nd measure), the order is configured for the merchandise (3rd measure), and Dell uses its sales channel to deliver the goods to the client (4th measure). The entire procedure is based on Dell's management as a Godhead which involves "business strategy, maintaining supplier relationships" (5th measure).

In Step 1: "Design merchandise and procedure", the design of a product and service can be modified by looking at the constellations of the merchandise. This integration depends on these factors.

In Step 2: "Buy standard point to stock", the steps of receiving, selecting, and paying are done in sequence. Dell receives payment before giving the order to the provider and then pays them.

In Step 4: "Sell using customized sales channel", after identifying potential consumers in different channels, managing client relationships is as important as placing corporate and individual clients.In Step 5: "Manage as a Godhead," Dell implements the scheme, utilizing internal and external resources while maintaining relationships with stakeholders. The second measure, "Buy standard point to order," can be modified by adding followers to it. The process includes identifying demands, possible providers, and selecting a provider. Contracts are negotiated with providers, demand prognosis and general info are shared, as well as stock

list information and info about terminal client orders. Dell manages the provider, pays them, evaluates their performance, and provides feedback and support. Dell also manages supplier relationships. With quick response to changes in client demand and low stock levels, Dell can purchase from providers without exceeding stock list levels. Dell benefits from positive cash flow as clients pay before receiving the product. Sharing stock list information helps maintain relationships with providers. Dell interacts with providers through ValueChain.Dell.com, obtaining information about stock lists, supply and demand data, component quality metrics, and new part releases. This allows providers to determine their production levels, avoiding the bullwhip effect. In comparison to competitors, Dell maintains an average of 6 days of inventory instead of 42 days., 1997 citied by Li et Al. 2005 ). Supply chain integration refers to the successful collaboration and coordination between a company and its suppliers to streamline processes and improve overall performance. This integration is crucial for manufacturers, as it allows them to meet the increasing demands from customers while maintaining flexibility in their operations. Dell serves as an excellent example of agile manufacturing, as they gather data from consumers and share it with suppliers. By building partnerships and ensuring high levels of internal coordination, Dell is able to keep inventory levels low and achieve faster cycle times. This information sharing has resulted in numerous benefits, such as reduced inventory, improved forecasts, and higher-quality products at lower prices for customers (Stein and Sweat, 1998 citied by Li et Al. 2005). Overall, effective supply chain integration is essential for manufacturers to remain competitive in today's market.In 1997, Dell was cited by Frohlich and Westbrook (2001)

as the largest direct marketer of personal computers globally. Dell's success is attributed to its extensive use of the internet for managing its supply chain, which consists of three components: suppliers, Dell, and customers. Integration in the supply chain can be categorized into two types: forward integration and backward integration. Forward integration involves coordinating and integrating the direct flow of information about deliveries between suppliers, customers, and manufacturing units (Saunders, 1997; Trent and Monczka, 1998 cited by Frohlich and Westbrook, 2001). Meanwhile, backward integration entails synchronizing information technology services and the flow of information from customers to suppliers (Martin, 1992; Trent and Monczka, 1998 cited by Frohlich and Westbrook, 2001). Despite its seemingly small direct distribution channel, Dell receives orders for computers from various parts of the world. Dell has five manufacturing facilities located in Texas, Brazil, China, Ireland, and Malaysia, as well as hundreds of supplier companies. Due to Dell's build-to-order approach and rapidly changing technology and components, both Dell's customers and its supply chain require a high level of responsiveness (Brunn and Mefford, 2004).Dell primarily receives orders through its website, allowing customers to customize their personal computers according to their preferences. The website regularly adjusts prices to accommodate supply and demand. Dell's utilization of advanced technology enables them to accurately predict and respond to changing consumer demands, giving them a competitive advantage over rivals. When Dell receives an order for a computer, it simultaneously forwards the order information to its manufacturing service and suppliers through its website. This allows suppliers to align their production schedules with customer demand, following a "pull" principle in supply chain management. As a result, Dell effectively reduces the

"bullwhip effect" in its supply chain. Dell follows a build-to-order model for inventory reduction of hardware components, avoiding outdated inventories since they do not sell computers through retail stores. Consequently, Dell's lead time is low and it is not significantly impacted by consumer demand levels.Dell maintains a shorter average stock list time of 6 days compared to its competitors' 42 days. The time between customer orders and dispatch allows Dell to adjust the number of components in its manufacturing countries based on customer demand. This delay also allows Dell to create a more reliable assembly schedule by adjusting dispatch schedules for customers. Third-party companies such as FedEx and UPS handle the delivery to customers, ensuring quick delivery and reducing inventory at retail stores. Dell has partnered with suppliers like Sony for monitor deliveries, where Dell only needs to inform Sony about the order details and Sony handles all the shipping work. The Internet allows Dell to manage their global logistics to minimize transportation costs and ensure responsive deliveries to customers and from suppliers. Dell shares sensitive information with its suppliers, which helps enhance service quality, timely production schedules, and mass customization capabilities. Dell has shown excellence in direct selling, minimizing inventory costs, fast production and delivery times, and cost-effective manufacturing processes. (Brunn and Mefford, 2004; Erevelles and Stevenson, 2005)Dell follows a build-to-order model for assembling personal computers, which involves transmitting the order to its assembly plants within 24 hours. The computer is then assembled in another 24 hours, and it is dispatched to the customer within a week of receiving the order. This approach supports Dell's build-to-order model, which is difficult for other industries to

adopt. Dell operates using the make-to-order model, allowing customers to make payment through credit cards, thus providing Dell with working capital. This enables Dell to have cash on hand for longer periods and pay suppliers at later dates. This gives Dell a significant financial advantage over competitors with large inventory levels. Dell outsources its maintenance and support activities to third-party companies. Whenever a service request is raised, Dell transfers it to the appropriate service provider to ensure timely resolution. Dell's supply chain management in the computer industry is exemplary. It creates and updates customer demand forecasts every two hours, allowing for efficient order scheduling with suppliers.The program displays the current consumer orders, orders in the waiting line, stock list position, and provider duties. Dell maintains its fabrication workss near to assemble and deliver goods on time. This supply chain integration allows Dell to have the highest stock list turnover ratio in the PC industry and deliver 90% of its goods in less than five days. Enhanced integration with providers can affect several aspects of company performance such as cost, quality, technology, delivery, flexibility, and profits. Dell emphasizes the importance of the connection between daily demand trend and incoming material from suppliers for its success. They utilize technology to facilitate this information exchange, referring to it as trading stock list for information. This exchange between buyers and suppliers through sharing information is called virtual integration, made possible through the internet. The inventory portion of a company accounts for 30% of its capital.P Industrial company holds a stock list of approximately $500 million or a 60-day supply, which equals $8 million a day to support its operations.

With the assistance of the "e-procurement system," Dell is able to maintain its inventory for less than 8 days by sharing inventory information with its suppliers. Supply chain planning, Just-in-Time production, and delivery practice are closely related to achieving high performance. Sharing information with suppliers, predicting customer demand, and managing internal logistics are the main motivations behind supply chain planning. It is important to coordinate different functions within an organization in order to achieve the company's goals. Just-in-time production consists of several strategies including the pull system, cycle time reduction, cellular manufacturing, agile manufacturing, and elimination of constraints. The production is based on customer demand when the order is placed in the pull system in an accurate and efficient manner."Cycle clip decrease" occurs when the task of computing machine collection is divided into smaller groups, increasing the accuracy and value of sentiment. "Cellular fabrication" recognizes the use of identical components or processes which leads to a decrease in time taken. "Agile fabrication scheme allows production systems to handle rapid demand changes, enhancing effective supply chain management" (Zhou and Benton Jr., 2007). "Bottleneck removal" stabilizes time, money, and resources while increasing manufacturing output levels. In summary, Just-in-time production has improved the receptiveness and effectiveness of supply chain management. The literature suggests that efficient delivery practices play a crucial role in achieving high performances in supply chain management. Dell gains a competitive advantage through its ability to deliver goods. By integrating these three areas of supply chain improvement, we can conclude that Dell maintains a high inventory turnover rate for low-cost components. The interface between Dell and its buyers makes the pull production system more efficient and

facilitates supply chain management planning. Sharing order catalog and backlog information with suppliers helps Dell reduce inventory levels and minimize supplier lead time (Zhou and Benton Jr., 2007).Delivery is completed at an extremely fast pace without any delays. Most importantly, Dell's supply chain planning improves with the utilization of the aforementioned three techniques. Dell primarily focuses on operational excellence in the dynamic PC industry where customer demands are volatile and rapidly changing. Dell fully utilizes its core capabilities and resources (seamless operations and supply chain process integration, precise execution ability of employees) through its renowned direct model, where customers directly order what they want (configure-to-order, mass customization) through the Internet (Kim, 2006). The direct model enables the reduction of order variability and response time to customer priorities; it also allows for effective operational level increase and expense reduction by postponing component assembly until after the order has been placed by buyers. Furthermore, supply chain integration, along with the efficient use of advanced information technology pertaining to providers and courier services delivering the PCs, helps decrease inventory levels through efficient distribution.Dell has demonstrated that the direct theoretical account is an impressive tantrum in the computing machine industry with its nucleus resources and capablenesss. To excel in the supply concatenation integrating, Kim (2006) suggests that Dell needs to clearly province strategic, operational, technological, cultural, and fiscal justifications. According to Kim's research, a Process Chain Council should be formed, consisting of senior direction and cardinal executives in the supply concatenation organisation. This council is responsible for certifying quality control in all aspects of the organisation and making determinations regarding procedures, construction, and technological integrating. Regular meetings with various

departments are essential for the council's success, and trust plays a vital role in holding the council together. Toyota serves as a prime example of managing relationships among suppliers using a lean/just-in-time doctrine.After the creation of a collaborative civilization, the procedure concatenation council needs to work together to develop detailed supply concatenation schemes that align with the business model and competitive strategies, such as cost- or differentiation-based approaches with either wide or narrow market coverage. In addition, they need to establish a vision for the entire supply chain/network. To achieve procedure concatenation synchronism, a framework must be established for developing competitive strategies and priorities, aligning assets and capacity to demand, and integrating processes, infrastructure, and information technology. Procedure concatenation synchronism.The various components of supply chain management, including enterprise resource planning (ERP), product lifecycle management (PLM), customer relationship management (CRM), supply chain planning (SCP), supply chain execution (SCE), and supplier relationship management (SRM), are crucial in achieving a high level of integration and excellence. To achieve this, supply chain directors must strategically plan and implement the process with a deep understanding. (Chopra and Meindl, 2004A cited by Kim, 2006).Kim (2006) suggests that by understanding the state of affairs, market competition, and consumer demand, businesses can develop a successful business model. This model should be supported by a common understanding among suppliers and should include a strategy that strengthens the competitive advantage. Additionally, businesses should implement processes to maintain low inventory levels and make use of information technologies. It is important to motivate employees to work towards a common goal and execute the model in a precise and timely manner.

In line with these recommendations, Dell's direct model

gives it a leading edge over its competitors. The company utilizes advanced information technology to offer customers and suppliers a unique experience while improving its supply chain management. Dell's success lies in its integrated supply chain management. Moving forward, Dell plans to collaborate with Oracle to provide seamless information integration, effective planning synchronization, and efficient workflow conditions. Information integration plays a crucial role in supply chain management for businesses. To enhance performance, scalability, security, and reliability, Dell has transitioned from UNIX technologies to Oracle's Enterprise Resource System (OERS).Dell can enhance its "deal processing, business intelligence, and content management applications" in a cost-effective manner by utilizing Socialtext website's assistance. Through Socialtext's Synchronized Planning, Dell can efficiently organize, predict, and restock inventory based on collected and distributed information. This aids in maintaining good relationships with customers and suppliers, as well as accurately predicting orders and stock levels. Additionally, Dell's migration from UNIX system to Oracle Enterprise Resource System (OERS) has improved its access to crucial information such as operating expenses, customer segmentation, sales margin, and transactional data. This gives Dell a competitive edge in the computer industry. By effectively integrating its supply chain with customers and suppliers, Dell can maintain its cost leadership by reducing expenses and increasing efficiency. Consequently, Dell's supply chain plays a vital role in improving sales and increasing profit margins.