Question: Dell Computer with close supplier relationships encourages sup

Dell Computer, with close supplier relationships, encourages suppliers to focus on their individual technological capabilities to sustain leadership in their components. Research and development costs are too high and technological changes are too rapid for any one company to sustain leadership in every component. Suppliers are also pressed to drive down lead times, lot sizes, and inventories. Dell, in turn, keeps its research customer-focused and leverages that research to help itself and suppliers. Dell also constructs special Web pages for suppliers, allowing them to view orders for components they produce as well as current levels of inventory at Dell, This allows suppliers to plan based on actual end customer demand; as a result, it reduces the bullwhip effect. The intent is to work with suppliers to keep the supply chain moving rapidly, products current, and the customer order queue short. Then, with supplier collaboration, Dell can offer the latest options, can build-to-order and can achieve rapid throughput. The payoff is a competitive advantage, growing market share, and low capital investment.

Discussion Questions
1. How has Dell used its direct sales and build-to-order model to develop an exceptional supply chain?
2. How has Dell exploited the direct sales model to improve operations performance?
3. What are the main disadvantages of Dell’s direct sales model?
4. How does Dell compete with a retailer who already has a stock?
5. How clots Dell’s supply chain deal with the bullwhip effect?

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  • CreatedJuly 23, 2013
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