Philippine State College of Aeronautics

Villamor, Pasay City

HOW DELL INTRODUCED THE BEST

SUPPLY CHAIN MANAGEMENT

Ann Jerrienette A. Corporal

AB Logistics 3-2

I.

WHAT IS SUPPLY CHAIN MANAGEMENT?

Supply Chain Management is all about the movement and /or flow of raw

materials goods and services. It is the process of a certain product from the point of
origin to the point of consumption. Supply chain management is important in a
business, it is being accomplished to give an effective service to customers and to
make the transaction between the suppliers and consumers efficient.
Supply chain management is incorporated with some features such as
manufacturer, supplier, transport, wholesalers, retailers, and consumers. Its main
purpose is to fulfill the customers demand by giving high quality products and
services.

II.

WHAT IS DELL?
DELL is a computer is a computer technology corporation that develops, sells,

repairs and supports, computers and computer related products. DELL is one of the
leading companies that innovates laptops, PC and other gadgets.
Dell computers had the reputation for being reliable and affordable, but what
really set it apart was the ordering system Michael Dell built. It directed buyers to an
online site that let them customize PC to their preferences, through affordable price,
that made Dell to better compete on both price and service.
During Dells 29-year history, the company has made its mark on the tech
industry. In an era when many of the most successful brand-name tech companies
hailed, DELL become popular because of its supply chain processes which is known
to be one of the best in the world.

III.

WHAT HAPPENED TO DELL?

During early 2000 DELL faced in that period were a lot of changes to the PC

market rise. One of it is the price wars that turned PCs into low-profit commodities,
and then the rise of tablets and smartphones that reduced demand for larger
computing devices.

DELLs stocks and revenue from laptops fell 13% year-over-year in the six
months through August 2, 2013, although desktop revenue was flat. Storage
revenue fell 9% while server sales rose 12% as Dell began to experiment with price
cuts. Services revenue grew by only 2%.
Because of these problems in sales that DELL Company is facing, CEO
Michael Dell proposed to privatize the company to return back its loss in sales.
Meanwhile, Dells operating expenses in the period rose to 17.3% of revenue
from 15.5% a year earlier, thanks to an increase in both R&D and marketing costs.
As a private company, Dell plans spend even more on these areas to become a
stronger purveyor of cloud technology to small and mid-sized companies.

IV.

WHAT MADE DELL THE BEST SUPPLY CHAIN?

When DELL has realized that Supply Chain is becoming more and more

important for the success of todays business world they work accordingly to keep
competitive advantage in the market. DELL has their own strategies that also help
them to reign among all of the companies and in the market like direct model
wherein DELL sells its PCs to costumer without using retail channel.
That creates direct relationships in every costumer which they can be
segmented into groups to make it easier to approach in this strategy they can get
and attract more customers that can be their regular and loyal clients in the
company.
The other unique strategy of DELLs supply chain is the Build-to-Order
strategy. In this strategy the costumer is the boss they can say and give the exact
details and designs that they want for their PCs once the computer is built and all
the software are downloaded it will be shipped to their customers by using 3PL. By
using this strategies DELL Company has a competitive advantage over other
companies, this company also has the least inventory costs. Since the case of faster
responses demand changes.

DELL also implements a just-in-time (JIT) inventory system which is

operated only by six days of inventory. Because of this inventory system DELL has
been able to obtain higher profit. They can cut down the costs to other inventories
like warehousing, hiring people to track and to maintain inventory because of justin-time inventory system the service becomes faster and the costumers can get
their orders easily just in a short period of time. It also helps to release updated PCs
and avoid using all the outdated technologies. The heart of DELLs success is its
integrated supply chain which has enabled rapid product, design, fabrication and
assembly. As well as direct shipment to costumers. DELLs strategic use of
information has made possible from order to delivery. Giving DELL a significant
competitive advantage.

V.

CONCLUSION
Through this study about DELLs supply chain management and its strategies

on how to overcome their problems in sales, I therefore conclude that supply chain
management in the modern time has become an important part for the success of
todays business world. DELL come up with an idea of improving their supply chain
to keep it as a competitive advantage in the market.
DELLs supply chain is different from other companies it uses direct
distribution from the suppliers it will be distributed to DELL wherein they will be the
one to distribute it to their customers.
DELL become one of the leading computer technology corporation because
of its affordable but high quality products and services. But as time pass, DELLs
stocks fluctuate because of the rise of smart phones, tablets, and other gadgets that
dominates PC and laptops that is the leading products of DELL.
DELL come up with different strategies that made their sales rise again. One
of their strategies is their virtual integration strategy where they use rapid seamless
communication, selection of partner who are best in their respective fields, use of
minimum number of suppliers, using internet as a strategy to eliminate boundaries
between companies and promote effective integration and less emphasis on

guarding intellectual assets and more emphasis on using assets rapidly before they
become out of order.

VI.

REFERENCES
Surviving supply chain integration; strategic for small manufactures (2000)
www.dell.com
http://www.slideshare.net/moizzza/case-3-moiza

http://www.telegraph.co.uk/technology/dell/9853418/How-Dell-became-

yesterdays-tech-giant.html