Dell – How Erp Implementation Builds ’s World Famous Supply ChainEssay title: Dell – How Erp Implementation Builds ’s World Famous Supply ChainHow ERP implementation builds ’s world famous Supply Chain:Virtual Integration: When ERP fits the Dell’s Direct model:The introduction of enterprise resource planning (ERP) software improves the coordination between firms. Before ERP, the each function in value chain had separate organization with separate information system. Each function performed its own tasks thus not globally optimizing the whole value chain. ERP builds the “electronic nervous system” to links all units together and increases overall productivity.
In some cases, firms found that they could eliminate most inventories by shifting to faster but more expensive transportation alternatives (e.g. air cargo) that replenished supply just in time. Simply put, ERP allowed information to replace inventory.
The emergence of the Internet facilitated more and more information sharing between firms, extending the benefits of ERP from the value chain of an individual firm to the entire value system of firms and their suppliers and customers. ERP can be a vital component in controlling complex supply chains and in the fast developing world of e-business and B2B electronic exchanges. Dell Computers success in reducing inefficiencies establishes it as a model for many other companies.
The Dell ModelDells success is based on realizing the strategic power of the supply chain. The core of the Dell model is to deal directly with and sell directly to the customer, and build products to order. Dell collapses the value chain and eliminates two significant cost components: the retailers mark-up and the costs and risks associated with carrying large inventories of finished goods.
Texas-based Dell is the worlds largest personal computer maker. Founded in the mid-1980s by a university student, Michael Dell, the company leads the sector with annual growth rates of 30 to 40 per cent. Dell has achieved its success in large part due to its highly efficient value chain integration approach, supported by ERP and – more recently – by the Internet. Dell produces custom-made computers “just in time” for orders received directly from the customer via telephone or the Internet. As Dell receives an order, it shares production requirement information electronically with its suppliers world-wide for immediate delivery to a Dell production facility, where the computer is assembled and shipped directly to the customer within a week. The Dell model relies on demand side pull rather than supply side push – no computer is produced unless there is corresponding demand in the marketplace. Thus the massive queues of inventory usually sitting idle within retail stores, distributors, and factories are virtually eliminated. The productivity advantages of this production model are profound. Dell is able operate with half the number of employees and one-tenth of inventory of its traditional computer competitors. Return on invested capital reached 195 per cent in 1999, compared to 10-20 per cent for traditional manufacturing firms. Companies from around the world have been flocking to Austin, Texas to understand the Dell production model, much as firms had flocked to Tokyo and River Rouge earlier in the century. The opportunity for productivity improvement was enormous; in the USA alone, the cost of goods in inventory of all value systems was nearly $1 trillion in 1997. As the 1990s closed, the Dell model began to spread from high technology to traditional manufacturing sectors such as automobile production. Recently, General Motors, Ford, and Daimler Chrysler announced they were moving to electronic supply chain management systems similar to Dell Computer. If successful, the Dell Model could be every bit as revolutionary to the production structure as Fords vertical integration and Toyotas lean production models were in earlier eras.
Dells originality lay in the approach that it adopted in implementing the direct business model. In particular, unlike other computer manufacturers, Dell sells directly to all of its customers and not just to large corporate clients. Through developing a direct relationship with all of their individual clients and building its computers to order, Dell was able to build a highly efficient just-in-time process, eliminating most of its inventory in the process. A further advantage to the Dell approach is the instant, current and continuous market research that it produces. In knowing exactly what individual customers want in a personal computer or computer network, Dell is able to anticipate market demand and shape the technological and competitive parameters of the computer industry. Dell argues that the direct model creates the most compressed PC supply chain by eliminating all
Dell is one of the industry’s leading businesses, and the most successful in the market. In 2007, Dell received more patents than any other computer manufacturer during the decade, a feat that will not surprise anyone. Since then, Dell still does business with more than 5,000 of the world’s largest corporations, including Apple’s iPad, Samsung, LG, Dell, Sony, Lenovo, Acer, Motorola Corporation, Acer Corporation, and Hewlett Packard, as well as with more than 200 of its competitors.
Our mission and expectations
Dell’s mission is to sell our service to customers worldwide in a way that is competitive and high speed. In fact, that means that we help our users find and enjoy a computer and its products in all possible weathers for their personal and business lives.
We are also committed to provide customers with a variety of software features and services that are not available through other manufacturers, whether in an online or in-app purchase. We understand the need for customers to use the Dell product at their most convenient and most convenient, but are not constrained by a wide range of consumer interests. Some of these interests include, but are not limited to:
– The demand for computers which could be considered to be used commercially, in a digital format where computers are often viewed as being made by different users and are therefore not portable;
– Demand for specialized, limited range computers, which use proprietary features that affect user preference and performance;
– The ability for the customers to change out their laptops and tablets in less time than they usually need and adjust their computer software accordingly; and,
– The ease with which we can provide our users with all of the features of the fastest possible computers available to them. This is particularly important when it comes to online video playback, because it is much faster than the traditional 4K TV.
We believe the best way to maximize our customer’s satisfaction is to provide this service for their personal needs, including at the best price. Although we have never been sued, our contracts with other manufacturers are governed by our Terms of Service and you may get the same benefits as if you were using our other products. These policies and conditions are also in place across all of our suppliers, and the best way we can ensure that our consumers are protected is to adhere to our terms of service.
Customers are also subject to special pricing which may apply to certain products. If we find a product that our customers demand, we immediately inform you and set a maximum markup on it. These products tend to be cheaper and have a higher quality than other products. If the pricing on a particular product is too high by our standards, we can make changes to it at a later date. Some of our suppliers also charge multiple different prices on certain products.
Because we are located near many of the largest international marketplaces, we are expected to maintain a high level of customer service. While our service is always provided to our customers, we need to make certain all our services include an online experience that meets the needs of our customers. In order to make these changes we must ensure that a certain level of customer support comes with each product and service purchase. We believe the best way to maximize customer satisfaction is by providing customers with all of the features and services that we offer the most people.
This policy and our terms of service do not set out any specific laws that govern or govern the use of any feature of a computer program or service. We encourage our customers to use the privacy benefits of all of our products and services at their best.