Monday, September 16, 2013

Is a Dell Manufacturing Genius?

After reading the Dell article, I was surprised by what I learned. I never knew that Dell was such a innovative leader when it came to supply chain management. I also, didn’t realize that Dell was able adopted the just-in-time manufacturing model/ Push-Pull strategy. I was always under the impression that only smaller firms could only pull such a strategy off because of their limited resources. To be honest, I didn’t even think a firm of Dell’s size could do something like that. However, as I reflected I realized that there are a few other companies that gave deviated from the norm and have created unique supply chains that benefit their needs, one company that comes to mind is IKEA. IKEA’s unique relationship with suppliers and unique inventory/warehousing set up has afforded them luxuries that other larger firms can dream about. After, this realization I was better able to process Dell’s SC and I realized that they actually created an all encompassing supply chain. I believe their supply chain takes into account marketing and financial department needs and use these needs to drive their supply chains. I believe Dell was able to avoid the labor crisis because their marketing and human resource team was staying abreast of any social crisis or any changes in the market; which allowed them time to create contingency plans so that they could adapt to the labor disruption that would occur for 10-days. Plus, I think it’s helpful that they are one of the few firms that has factories in the US (helps minimize disruption from natural disasters and US has relatively stable government) and very few overseas because they want their parts close by so that they can easily access them when needed.
Of all the great things Dell has incorporated into their supply chain, I would have to say that their just in time manufacturing model is the most genius component. Not only does this mentality meet the needs of the customer (customize, quick delivery/access and sturdy) but it also benefits Dell financially speaking because they can avoid inventory holding and warehousing costs that other companies have to face every day. In addition, to saving money Dell can more easily utilize forecasting models to determine if they need to increase or decrease production to meet need.  Also, feel like they took a page out of IKEA’s book by directly interacting with customers (eliminating middle man) which helps save costs before product hits the market.
With all these innovations that Dell has implemented into their supply chain I wonder if they can even reduce their inefficiencies more? Dell states they want to increase their model efficiency by 30% but I’m not sure how they could be more efficient without hindering or eliminating essential components of their supply chain. If they do will they have to find inspirations from other companies in different market sectors, like IKEA? Although, I can’t imagine where Dell will begin to cut costs, I think this YouTube video provides insight into the Lean Dell machine and possible provide points of improvement for the firm.

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