Traditional Supply Chain Vs Modify Supply Essay Example

Dell chooses to focus on managing information about suppliers, customers, and inventory flow rather than solely focusing on physical goods control.

Dell has collaborated with I2 SCM Company to create the i2 Trade Matrix supply chain tools. These tools have been customized and tailored to optimize and match existing resources. The I2 system offers a great platform for improved inventory planning and forecasting.

Dell has the ability to monitor the entire supply chain process, allowing them to have a global view of inventory flow. This enables management to predict and anticipate future supply and demand levels. Dell can easily adjust their decision-making when unexpected events, such as sudden drops in supply or demand, occur.

The i2 SCM system provides real-time reappraisal and instant decision-making changes to deal with uncertainty.

Customers

Dell sells computers directly to consumers through their direct selling model, without distributors and wholesalers. Dell receives orders through phone, internet, or email. Customers have a variety of products to choose from, including desktops, laptops, servers, or printers.

Dell recognizes the importance of understanding customer demands and utilizes a demand pull approach rather than a supply-push method in manufacturing and selling computers. Customers have the ability to customize their computers to meet their specific requirements. To fulfill orders, Dell opts to produce each computer individually and does not aim to maintain excess inventory or finished products.

The Dell 's Direct Model can help balance supply and demand by gaining more information on customer needs and demands. When demand increases, the company purchases enough materials and components for production. The Manufacturing and Marketing departments decided to reduce component stock lists.

Suppliers

In order to

manage operations with low inventory levels, the close relationship between Dell and its suppliers is important. Dell believes that by developing partnerships with suppliers, the company can achieve zero inventory levels.

Dell maintains a close relationship with its providers by sharing all stock list information, including long-run planning information, volume outlooks, and stock replacement information. This confidential internal information is only shared with Dell's top 30 providers. The company's procurement decisions are influenced by factors such as cost, delivery time, logistics issues, quality, technology, supply sustainability, quality services provided, and geographical considerations. The selection of providers also takes these criteria into account.

Dell shares information on revenue forecasts with its identified marketing providers within one month. Dell consistently communicates demand and supply trends to its providers and expects them to share information about their ability to deliver products on time. Dell conducts a detailed analysis of each provider to determine the most suitable one. Sharing more information with the providers can reduce the time spent on ordering and receiving materials, thus minimizing the safety stock level.

The internet has made it more efficient for Dell to balance the supply and demand of materials by communicating with providers. For example, Dell can share real-time order information with their suppliers, allowing both parties to quickly respond to unexpected changes in demand. In cases where a component failure is related to a supplier, Dell will transfer the information through the internet to the supplier for error correction. Dell also has the option to choose an alternate provider if components are consistently defective. Furthermore, all of Dell's manufacturing centers follow the same system, process, and procedures.

This ensures that the award quality

across the planetary web remains consistent. Dell has received an order from the order direction system. This information will be electrically reassigned to the fabricating scheduling system every two hours. A unique sequence of figures is created for each order. In the kitting portion, staff can see each order from the waiter and fit the merchandise into each client's order.

The computer name or service strip number is assigned a unique identifier and then printed on a label, which includes both human-readable text and machine-readable barcode. These labels are used to scan the barcode and strip number in order to separate different components for various orders. To ensure that all components and materials are included in each order box set, it is crucial to verify their presence. In the manufacturing area, the kitting process transfers and delivers materials and information to the factory. Each component has its own distinct code number, which can be determined by scanning the barcode to fulfill customer requests.

In addition, customers can verify the order details by scanning the salon code before assembly. Each component and machine body is assigned a unique salon code to indicate its position in the computer assembly process. The requested package will be downloaded onto the machine during software installation and testing. It is crucial to test all components for proper functionality.

Trial completion is necessary to ensure the feasibility of both the hardware and packaging. In the sport of boxing, the computers are constructed and tested before being transferred to the boxing area. The barcode will be scanned for verification purposes. The computers will be securely placed in the shipping boxes.

Make sure to scan each individual barcode

to guarantee that the client's order is delivered correctly.

Political
When examining the challenges confronted by companies, it is crucial to take into account government ordinances and legal issues as significant political factors. As Dell operates globally, corporate tax rates differ across countries. For instance, Hong Kong has a 16.5% corporate tax rate while the US has a rate of 35%. These tax rates directly affect Dell's net profit. Moreover, each country implements distinct regulations to protect and promote its own industries and manufacturing.

For Dell to enhance its global presence, it may aim to adopt these policies for boosting profitability. The significance of environmental concerns and sustainable growth has surged, prompting numerous countries to enforce laws and regulations regarding waste management, carbon taxation, and pollution control. However, this will lead to increased overall expenses for the company.

Economic

The economic environment is crucial for companies to consider. It pertains to the nature and direction of the economic system in which they operate. Dell, for instance, emphasizes producer responsibility when managing non-functional electronic merchandise and creating a recycling process. Despite higher costs associated with developing responsible recycling practices, Dell has successfully enhanced its brand image and reputation. This achievement stems from Dell's dedication to reducing electronic equipment waste and enhancing environmental performance through careful consideration of the equipment's life cycle.

The computer industry is forecasted to witness a 10% increase in the upcoming years. The economic situation within this sector will influence the buying power of potential customers, which seems to have a favorable effect. Furthermore, there are expectations of an increase in the GDP growth rate,

which could also contribute positively to computer sales.

The increasing likelihood of individuals purchasing computers for personal use will have a significant impact on global companies due to fluctuations in currency exchange rates. These changes will also affect profit margins within the computer industry.

Social

Society's attitudes and cultural values are the main focus of the socio-cultural sector.

The level of education in a country determines the demand for computers, which have become crucial tools for various purposes like learning, analyzing, working, and entertainment. Computers enable access to abundant online information. The growing younger population and working force contribute to increased computer usage. To appeal to and expand its market among young consumers, Dell intends to develop a brand-new laptop.

Both the company and staff are increasingly adopting remote work, resulting in a rise in home office setups. This trend suggests that the demand for telecommuting will continue to grow and gain popularity. Additionally, there is a growing daily requirement for laptops.

Technology has revolutionized engineering, enhancing its accessibility and indispensability. Failure looms over companies that fail to keep pace with computing machine advancements. To evade such a fate, it is crucial for companies to anticipate forthcoming trends and develop products that satisfy customer needs. Dell has effectively adapted to these technological shifts by broadening their array of offerings.

It is flexible to the changes in technology. The changes in engineering indicate an increase in demand. Dell has excellent e-commerce capabilities, which can predict the future needs of customers.

Five Forces

The level of Threat of New Entrants is moderate. It is difficult for new competitors to enter due to high entry barriers.

The new entrants face challenges in achieving buyer loyalty, building a strong

brand, implementing a low-cost model, and providing excellent customer service. Additionally, the required investment capital is high. Computers are not considered a standard product. Another challenge for new entrants is that customization of products may reduce profits. There is also intense competition in the market, and price wars have led to a decrease in profit margins.

All competitors desire to lower the price of merchandise to attract more customers. Increasing market share in the computer industry is challenging unless a breakthrough occurs. Computers have a low differentiation, with buyers always prioritizing price. Dell can gain market share in a highly competitive environment, thus proving the success of their business strategies.

In terms of substitutes for computers, there are limited options available, making the threat moderate. However, smartphones have the potential to act as substitutes. Moreover, mobile phones will indirectly compete with the computer industry. In Hong Kong, mobile phones are seen as attractive and versatile products due to their portability and user-friendly features.

The ownership of a smart phone is unaffected by age or gender. Both buyers and providers have significant bargaining power because computers are price-sensitive. If Dell's computer prices increase, customers will probably switch to another brand, highlighting the importance of implementing a cost leadership strategy.

If suppliers increase their prices for natural materials and ingredients, Dell's customers will have to pay more. This will affect Dell's cost leadership strategy. To address this issue, Dell has developed strong relationships with both its customers and suppliers.

Supply Chain Management (SCM) improves decision-making

Dell Inc. is involved in various activities including procurement, production, warehouse management, marketing, sales, and customer service. The management team at Dell aims to gain a thorough understanding

of the entire company in order to enhance decision-making processes.

Supply Chain Management (SCM) can help integrate various elements into a single process. SCM collects all the information about providers, clients, and production processing activities. This information can be analyzed to guide decision-making. The decisions made by management cover various aspects and opportunities.

Within the realm of supply chain management, various factors such as stock list planning, stock list degree, gross revenues forecast, logistics direction, material demand planning, production capacity, calculating supply and demand, quality and measure control contribute to cost and benefit considerations. The SCM system plays a crucial role in enhancing net income while minimizing costs. For instance, Dell utilizes the i2 Trade Matrix supply chain tools, which are specifically tailored to manage inventory movements. A pertinent question arises in Case 1: What is the maximum capacity for storing stock lists at the manufacturing facility? Determining the optimal stock list degree is crucial as excessively high stock levels result in higher costs, while insufficient stock levels lead to missed sales opportunities. Thus, a well-developed SCM system is indispensable in achieving an optimum stock level.

The provided information helps reduce the amount of unused stock, thus reducing disused stock. For example, it can help maintain minimal stock lists when accurately reordering stocks. Dell should have a contingency plan to deal with unexpected and unannounced issues due to the uncertainty of supply and demand. While safety stock is important, it comes with costs.

I2 Trade Matrix provides tools for supply chain management. These tools retrieve and gather all relevant information about the supply chain, making it easy for managers to review and make decisions regarding inventory issues. By utilizing

the SCM system, they have access to various methods for addressing these issues. Additionally, the system generates reports and graphical summaries to help visualize the complexity of the problem.

Case 2: The choice of the provider with the lowest cost of computing machine components and raw materials is important for reducing operation costs. The management utilizes the i2 system to review information about the providers, including credibility, delivery time, and product quality. All the providers' information is recorded and the system generates a report for comparison.

Case 3: Dell faced a pricing problem when determining the optimal price for their Personal computers in order to achieve high sales volumes. The SCM system can help in setting a target price and estimating the expected sales volume.

The system could provide a fast response for calculating the net income margin. There are numerous combinations between providers and clients. Dell's management could more easily implement the best approach for pricing issues through the SCM system.

Decision

The simple SCM is the core competence at Dell. The i2 system is used to deal with complex issues in the supply chain, which can improve the effectiveness and efficiency of the operational process. Additionally, the i2 system could also enhance decision making.

The computing machine information engineering industry is experiencing a favourable external environment, providing Dell with an opportunity to expand their business and increase their market share. Additionally, Dell's strong brand loyalty can help mitigate the impact of rival competitors. Attracting more customers is possible by offering the lowest priced computers.