Dell is a global information technology company that sells, repairs, develops and supports computers and also the

related products and services. They realized that to success and to be the top in the business world that with a lot of competitors, the supply chain will become the main reason and important. Dell changed his strategy in 1985 to begin built-to-order computers and in the same year the company generated $70 million in sales. Besides that, just after few years, the revenues of the company had climbed to $500 million. This huge of Dell Computers were due to innovations in the supply chain, manufacturing and also a novel distribution strategy. (MaRS,2012) Dells supply and shipping networks that is visibility also an example of the latest trend in logistic. Visibility supply chain will prevent those unforeseen loss of inventories in their operation. Dell also has a good coordination of their operation. Product design and assembly line allow Built-to-order strategy that makes their supply chain more effective and attractive. Dell producing custom products only if their customers make an order and it helps to reduced safety stocks of their company. When the customers make their orders, the configuration details will send to the manufacturing department and they will start the assembly of the products. So, Dell has the advantage over the others competitors because of the inventory cost reduces since they applied this faster response to the demand changes. This strategy will be in lowers costs and increases turn. The payment of an order also visible before Dell makes their payment to the suppliers for their products components. (MaRS,2012) Dell applied a just-in-time system to eliminate its inventories that operate on only six days of inventory. Just-in-time allowed the company to operate on a direct-to-consumer model in their operation management. It will produce with incredibly low inventory costs through this system and created a competitive advantage. Dell has been able to obtain higher profit margins because

the implement of this system. Dell has been able to cut down their costs that spend on warehousing, hiring people to track and maintain inventory since the company inventory is only 6 days cycle. Dell sold its products directly to their customers. ERP system developed to allow their customers to make their order directly from Dell instead through middle man. (MaRS,2012) Dell started out as a direct seller and they start using a mail-order system. After that, they taking advantages of the internet to continue develop an online sales platform which results in a profoundly bond with their customers. This system makes them maintain their market share in their business. Besides that, Dell also offered superior customer choice in the system configuration at a deeply discount price because the cost-savings that related with cutting out the retail middleman. Dell works closely with their suppliers, sharing their expertise and best practices and also company and suppliers work hand-in-hand to shorten their product life cycles. This allowed Dell to get benefits of their virtual integration. It will also reduce the Bullwhip effect which will cause the inaccurate or distorted demand information created in supply chain. Dell developed the sell what you have system instead of making what you want to sell was also a very critical driver of Dells successful profitability management of their company. (MaRS,2012) Dell matched supply and demand on a daily, weekly and monthly basis through its use of the profitability management. As the strategies that implemented sharply reduced the variance, so the need for inventories simply disappeared. Dell has forecast the demand in every single level of the production. They are using a collaborative business strategy that includes main 4 areas which are Strategy and Planning, Demand & Supply management, execution and analysis. Strategy & planning that actually focus determining and develop plans for the future. Demand and Supply management which is identify all the customers demand and also their orders they placed and

shipment directly requirement. Execution which mainly doing the place orders of customer and then prepare and directly shipments, receive and stock products and recording all the transaction and payments by the customers. Analysis which is mainly focuses on the monitoring, collecting and calculate the key performance metrics of everything and make the adjustment of the plans id it is needed. Dell combined operational and process innovation to generate the huge cost-savings and the customers value in the PC market. (The National Academies Press,2000) Furthermore, most of the other companies are able to reduce inventory and lead time through the effective supply chain management. Besides that, there is another important factor called demand shaping. Basically that is a situation with the price goes up due to the higher product demand. In this situation that causing strains in supply chain. So, Dell decided reduces the price of different model in the same product line. Customers who wished to purchase specific computers model will changes his mind and consider buy the different computer model in same product. They manage to prevent product shortage and also show how they able to control prices of its product lines. (Nikkei, 2004) In short, Dell maintains a constant flow of data to successfully forecast demand by two important ways, one between customers and Dell sales team, and the others are among sales, suppliers and procurement. Dell tries to design the supply chain to match customer requirements. Dell relies on a unique supply chain strategy that gathers large volumes of customers information through its direct-sales model, make-to-order system and shares it with all the internal procurement, sales departments and external suppliers. These relationships will actually enable Dell to forecast accurately. Dell created a tightly strategies business model and it enabled to let the supply chain to manage away the need for its component inventories. The importance of Dells industry collaboration to set the strong supplier standards that creates a positive change of the company.

(MaRS,2012) Just-in-time and leveraging strong supplier networks allowed Dell to operate on a direct-to-consumer model and it could produce with low inventory costs that will create a competitive advantage over the others firms. ( Matthew, 2012) .Dell willing to take the risk for the company improvement. Although deleting player in the distribution chain is a risky move for the company, but it can reduce the operation costs and dramatically improved margins. (MaRS,2012) Dell always delivering an optical customer experience, whether is simplifying the order process, offering affordable process or providing through technical support, Dell has put efforts on it and create a strong bonding with their employees to fulfill all customer needs.(Dell,2012) Other than that, Dell can achieve the performance and flexibility necessary to deliver its award-winning products and services by leveraging industry standard technologies to manage its business. (Dell,2012) Dell should focus on their customers service instead of just focus on their products, enhancing customer value is also important for their supply chain management. Dell also should let data do the driving. The easily accessible sales and customer feedback data that resulted from online sales actually allowed Dell to stay ahead of the demand curve.(MaRS,2012). Dell should consider about the long term plan instead of just going for the short term profit, it is essential to aware that emerging trends and other opportunities for the company.

References Dell, The Core Areas of Dell Business Run on Dell,2012 [online] Available at: http://www.dell.com [Accessed: 2 February 2014] MaRS, Case study: Dell-Distribution and supply chain innovation,2012 [online] Available at: http://www.marsdd.com/articles/dell-distribution-and-supply-chain-innovation/ [Accessed: 2 February 2014] Matthew Littlefield, Manufacturing Operation Management: Lessons From Dell, 2012 [online] Available at: http://www.manufacturing.net/articles/2012/07/manufacturing-operationsmanagement-lessons-from-dell [Accessed: 2 February 2014] Nikkei Shinbun , Dells progress of twenty years, Japanese Industrial New Papers,2004 [online] Available at: http://www.academia.edu/3599163/Jitesh_Thakkar [Accessed: 2 February 2014] The National Academies Press, Surviving supply chain integration: strategies for small manufactures,2000 [online] Available at : http://www.nap.edu/catalog.php?record_id=6369 [Accessed: 2 February 2014]