Essay Sample on Analysis of Why Dell's Supply Chain Strategy Is Successful

The current personal computer (PC) market can be defined as margin-hungry. As such, businesses in the industry must exhibit ingenuity and creativity in their supply chain structures to remain relevant and competitive. Dell's approach involves eliminating wastes, time delays, and extra costs, and ensuring that customers enjoy the savings derived from such approaches, in keeping up with the competitiveness (Gallien, 2016). Dell's unique supply chain strategy allows it to gather large volumes of customer information that is derived from its direct-sales model. Customers have proper channels that enable seamless sharing of communication with Dell suppliers. The data is shared with the internal procurement and sales department. The company shares the information it gets from its customers with the external suppliers. The constant flow of data allows the company to forecast demands properly. The information received from suppliers informs the company of the products that should be promoted, which builds the demand-shaping concept.

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Main Supply Chain Challenges That Dell Is Now Facing

The supply chain challenges Dell faces are related to the dynamics experienced in retail sales, which affect facility, inventory, cost of information, customer service, and transportation. Increasingly, the sale of computer hardware has shifted from traditional retail stores like Target and Walmart to online eCommerce platforms (Mangan & Lalwani, 2016). The company's supply chain boundary considerations categorize personal computers on the push side of the supply chain way before the final sale. Dell begins its assembly of PCs once it receives a customer order. Hence, while Dell's supply chain is designed on linkages with suppliers and customers, more and more customers are bypassing the retailers and making direct orders online to the company. Another challenge is that Dell's slow transition into a supply chain that focuses on online traffic allowed other players such as HP to take up the market, which relegated it into a second player in the PC market. The growing complexities in product manufacturing also increase the delivery time, which reduces customer satisfaction levels.

Strategies to Effectively Overcome the Challenges

Dell can overcome the supply chain challenges it faces by becoming more proactive and establishing strategies that prepare it for change. One approach to address its supply chain limitations is to enhance its value co-creation environment (Abdelkafi & Pero, 2018). While the company's traditional supply chain focuses on suppliers, the new approach must offer customers a larger room for communication. Dell needs to establish improved channels that allow for proper connection with the customer. The company can also strengthen customer communities. These communities will ensure that the company collects information in time and that the customers become part of the company.

How Dell Has Changed Its Supply Chain to Satisfy Its Customers

The supply chain approach used by Dell in the 1990s was entirely focused on building strong relationships with retailers (Mangan & Lalwani, 2016). However, this approach proved unprofitable, prompting the company to improve customer relationships. The renewed approach gave rise to a unique strategy. The company then focused on ensuring close coordination and the improvement of vertical integration through cost reduction and horizontal specialization. Dell assigned service representatives to each one of the customer relationship centers and ensured practical communication tools that allowed the intake of customer feedback. The company's use of analytics tools enables it to assess customer feedback and to categorize client concerns and needs. Therefore, Dell's production decisions are entirely determined by the analysis of data derived from the interactions with its customers. As the market has become more competitive, Dell has ensured that it builds stronger relationships with its customers by offering quality products and services and offering products and services that address customer needs.

References

Abdelkafi, N., & Pero, M. (2018). Supply chain innovation-driven business models. Business Process Management Journal. https://re.public.polimi.it/bitstream/11311/1049591/2/POST%20PRINT%20OF%20BPMJ%20Abdelkafi%20Pero%202018.pdf

Gallien, J. (2016). How Dell reformed its supply chain technology to reduce risk. The Business & Management Collection. https://hstalks.com/t/3422/how-dell-reformed-its-supply-chain-technology-to-r/

Mangan, J., & Lalwani, C. C. (2016). Global logistics and supply chain management. John Wiley & Sons.