Dell Supply Chain Strategy
An overview of Dell Inc‘s Supply chain
OMS 511
Introduction
The Personal Computer industry has revolutionized the way of life. Technological forces have the most significant influence on the computer hardware industry. The extremely short product life cycle for computers, influenced by the upgrade cycle, has both positive and negative effects on companies within the industry. It challenges companies to maintain superior inventory management and supplier relationships: areas where Dell excels. Technological change also drives waves of additional computer purchases within a mature market.
Dell, Inc was the first major company to really seize the opportunity of selling via internet. It was founded in 1984 by Michael Dell. Traditionally, Dell has sold all its products whether to end user consumers or to corporate customers using a direct-sales model via the internet and the telephone network. After a short break in using the retail channel from 1990 to 1994, Dell returned to its direct model and grew rapidly in the mid 1990s (Kraemer, 2000). The company, in terms of market share, pushed ahead of Compaq in 2001, but returned to second place when HP and Compaq merged in 2002. Chief Executive Officer Michael Dell abandoned the company's direct-sales-only model in an attempt to win back the PC sales lead held by Hewlett-Packard for more than two years. (www.fortune.com). He put Dell products in 20,000 stores worldwide, starting with Wal-Mart Stores Inc. and Best Buy in the U.S. Under this scope, the name of the company was changed from Dell Computer Corporation to Dell Inc in order to reflect the evolution of the company from a computer manufacturer to a company that provides a wide array of technology related services.
Dells‘ product portfolio includes personal computers, servers, data storage devices, network switches, and software and computer peripherals. The company also sells HDTVs, cameras, printers, MP3 players and other electronics built by other
OMS 511
Introduction
The Personal Computer industry has revolutionized the way of life. Technological forces have the most significant influence on the computer hardware industry. The extremely short product life cycle for computers, influenced by the upgrade cycle, has both positive and negative effects on companies within the industry. It challenges companies to maintain superior inventory management and supplier relationships: areas where Dell excels. Technological change also drives waves of additional computer purchases within a mature market.
Dell, Inc was the first major company to really seize the opportunity of selling via internet. It was founded in 1984 by Michael Dell. Traditionally, Dell has sold all its products whether to end user consumers or to corporate customers using a direct-sales model via the internet and the telephone network. After a short break in using the retail channel from 1990 to 1994, Dell returned to its direct model and grew rapidly in the mid 1990s (Kraemer, 2000). The company, in terms of market share, pushed ahead of Compaq in 2001, but returned to second place when HP and Compaq merged in 2002. Chief Executive Officer Michael Dell abandoned the company's direct-sales-only model in an attempt to win back the PC sales lead held by Hewlett-Packard for more than two years. (www.fortune.com). He put Dell products in 20,000 stores worldwide, starting with Wal-Mart Stores Inc. and Best Buy in the U.S. Under this scope, the name of the company was changed from Dell Computer Corporation to Dell Inc in order to reflect the evolution of the company from a computer manufacturer to a company that provides a wide array of technology related services.
Dells‘ product portfolio includes personal computers, servers, data storage devices, network switches, and software and computer peripherals. The company also sells HDTVs, cameras, printers, MP3 players and other electronics built by other
References: 1. Brian S Fugate; John T Mentzer,(2004)‖ Dell 's Supply Chain DNA‖Supply Chain Management Review 2. Dell, M., Fredman, C. (1999), Direct from Dell: Strategies that Revolutionized an Industry, Harper Business, New York, NY,. 3. www.dell.com 4. www.Fortune.com 5. www.Gartner.com 6. Grant,R.(2005) ― Contemporary Strategy Analysis‖ Blackwell Publishing. 7. Kapuscinski, R., R. Q. Zhang, et al. (2004). "Inventory Decisions in Dell 's Supply Chain." 8. Kraemer,K.L., Dedrick, J., Yamashiro, S.(2000), ―Refining and extending the business model with information technology: Dell Computer Corporation‖, The Information Soceity, Vol.16 pp 5-21 9. New York times, 5/25/07