The management of supply chain activities

The management of supply chain activities with the goal of maximizing customer value and ensuring that a sustainable competitive advantage is achieved is known as supply chain management (Zygiaris, 2000, 2). It shows the actions taken by the companies involved in the supply chain to manage and expand the supply chains in a productive and efficient way. Such activities include product development, production, sourcing and logistics, as well as the system of information, which have to be provided for the activities to be coordinated successfully.

Firms often engage in the creation of logistic strategies, which helps in ensuring that effective logistics are achieved (Rushton, Walker and Transport, 2007). Supply chains are in a constant evolution and change, which implies that organizations engage in the development of several logistics strategies for specific customers, countries and product lines (Bălăsescu and Bălăsescu, 2014, 9-16 ). Supply chain always affects the logistics of an organization. A formal logistics strategy is essential to ensure that the supply chain has an element of flexibility. Four distinct organization levels should be given a lot of emphasis, which are structural, strategic, functional and implementation.

The concept of supply chain management (SCM) is gaining importance and popularity in society (Naslund and n Williamson, 2000). The reason behind this is that organizations are finding themselves in the verge of having to rely on supply chains and networks, which supports their competitive advantage in the global market economy. Hence, firms are focusing on mitigating the disruptions and risks, which may occur in the supply chain by having good relationships with related companies in the same supply chain, as well as their independents organizations (E2open0012, 2012). Moreover, firms are enjoying increased return on assets and on investments by venturing into the area of supply chain.

Dell

Dell Inc is a computer company located in Round Rock, Texas (Dell Technologies, 2017, 1). (DellTechnologies, 2017) The firm has approximately 138,000 employees. This company is involved in the manufacturing, repairing, selling and supporting personal computers (PCs), data storage devices, servers, computer peripherals, network switches, and electronics. The firm has a good reputation in the area of innovation in e-commerce and supply chain management (Bălăsescu and Bălăsescu, 2014). A notable point is the direct-sales model, which has “the configure to order” and “build to order” manufacturing approach. These approaches ensure that the firm has good configuration tied to the specifications of the customer.

In 2017 first quarter, Dell has the market share of 15.9 percent, which made it the 3rd largest vendor of the PC in the word after HP Inc and Lenovo (FY17 Corporate Social Responsibility Report, 2017, 3) (FY17CorporateSocialResponsibilityReport, 2017). The firm has been able to achieve this performance because of its engagement in marketing of different brands to specific market segments in society. However, the firm receives intensive competition from Acer, HP, Lenovo, Toshiba, IBM, MSI, Asus and Fujitsu. The organization addresses the issue of marketing by having its advertisements placed in several media outlets that include the Internet, television, magazines, newspapers and mail-order catalogs.

Purpose of supply chain management

Supply chain management is essential since it helps in ensuring that products are delivered to the market in a fast and quick manner (Zygiaris, 2000). The aim is to ensure that a firm maintains its competitive advantage and satisfies its customers through a quick and effective delivery within the market segment. The extra time for the delivery of the products is associated with substantial profit advantage for a company. Such also helps in improving the sales volume of the company.

Moreover, supply chain management helps in value addition. Thus, an organization is able to achieve its corporate strategic objectives, which include the reduction of the working capital, taking the assets from the balance sheet, increasing the turns of the inventory, and acceleration of the cash-to-cash cycles (Zhou, Karmarkar and Jiang, 2015).

Benefit of supply chain management in Dell

Dell supply chain management will be a great benefit in the reduction of the inventories, lowering of the cots, ensuring that there is satisfaction of customers, sharing of information among all the involved partners, proficiency in the manufacturing process and building trust among the partners (Wisner, Tan and and Leong, 2012).

Dell is one company that has a unique supply chain system among all the PC manufacturers. An example of this is the configure-to-order model, which ensures that customers can have PCs based on their independent requirements (Dauw Song et al., 2014). Thus, supply chain management ensures that there are minimal barriers, reduced friction and less resources wastage. Moreover, procedural and functional synergy exists among the participants as there is a quick response to the demands in the market.

Current e-business and e-commerce model

E-commerce for dell has been the main factor towards the success of the company on online sales. As such, the firm has focused on an effective strategy of ensuring that sales occur successfully over the Internet (Norena, 2000). The channel for e-commerce has proved to be successful in marketing the products of the company.

The unique model for Dell is the direct model. The utilized principle is that of elimination of the middle man in the process of selling the computers (Ghani, Zainuddin and Ghani, 2009). As such, the Internet plays a significant role in enhancing the attainment of the sales volume for the company. The used custom built order direct model ensures that the entire value chain is integrated such that it incorporates the entire set of activities, which aid in achieving customer satisfaction. This model also helps the firm to obtain immediate feedback from the market on real-time input, market products, service and product requirements, and what is expected in the future (Norena, 2000).

However, online sales for the company products are not at the highest level. As such, comparing Dell PCs sales to auction sites like uBid and eBay, it is clear that Dell is facing significant market challenges (Gibbs and Humphries, 2009). The Dell.com website runs on the standard Dell PowerEdge servers, which are backed with EMC/Dell Fibre Channel storage. The backup strategies aim at ensuring that software and servers do not present technical challenges to negatively impact the online business.

The company also has built a direct business model, which facilitates in ensuring that sales occur effectively via the online platforms without the involvement of wholesalers and retailers (TechData, 2005). The firm is currently expanding its business in the electronic and computer industry, which indicates an element of success for the organization. Further, the company has continued to build systems, which helps in improving its direct sales, as well as introduce new technologies and products at a fast rate as compared to the competitors (Eckstein et al., 2015). The unique model of the firm has shaped the estimation of the requirements for its customers, the provision of low-cost PCs to its clients and the forecasting of demand. Moreover, partnerships with delivery service providers and suppliers have been established, which help in supporting the information flow.

However, the model has the downside of the longer shipment time, which is approximately 7-14 days since the manufacturing of the PCs occurs after the placement of the order. The change in market trends have resulted into a reduction of the Dell PCs market share (Li et al., 2012). In spite of this, the management team has formulate the “End user computing” strategic plan, which relates to the simplification of business, having a new share of the market, scaling of alternative solutions for computing and having end-user computing alternative.

The long history of Dell, which is linked to direct customer sales helps them to have a good competitive advantage and wealth for the intelligence of its customers as compared to what happens with competitors (Norena, 2000). The close relationship also ensures that the firm is able to maintain low inventory and meet the desired demand.

It is recommended that Dell should have a new build-to-order model, which ensures that shipment occurs within 24 hours after the customer’s places the order in accordance to specific configurations (Chopra and Meindl, 2013). Further, the company should engage in customization of its SKUs for different channels and countries through its offer of the CTO and BTO models. Such will help in driving revenues and lowering cost. Moreover, the leadership should focus on moving large volume of the product sales service, as well as support to the Internet (Stadtler and Kilger, 2008). The Internet should also be utilized as a key strategy of improving the procurement of the suppliers by linking them to the business system of Dell. It is also vital to have the value-added services expanded.

Further, it is recommended that Dell should continuously engage in the development and design of innovative and new products, enlargement and development of the product, and utilizing an innovative technology, which helps in achieving the satisfaction level of the customers (Chen-Lung, Lin and Chwen, 2007). In addition, Dell should engage in the deployment of cloud computing. This is because cloud computing is the recent trend in IT, which helps in lowering costs, reducing complexity and improving scalability (Hutt and Speh, 2010). Thus, Dell should not let itself not enjoy these benefits, which will steer its performance to the highest level, as well as manage the issue of market competition.

Supplier relationship management

Supplier relations play a significant role in determining the success level of the company. The intensive competition in the global marketplace triggers leaders to focus on long-term success, which is linked to the company (Wang, Chan and Pauleen, 2010). The partners need to aim at the extension of the resources, flexibility and having value added services. Thus, vigorous supplier relationship is essential in ensuring that a company has the potential of maximizing on the value of the partnership, managing costs and minimizing risks by having an effective lifecycle (Management, 2006).

The direct model adopted by Dell has a key focus on its relationship with suppliers (Magretta, 1998). Such is regarded as a vertical relationship since there is integration of the part or all of the supply chain. The firm has adopted a dynamic supplier relationship network, which implies not of all them are able to last for long. However, where there are stable technologies, the company tends to have long-lasting relationships, but where they are volatile, short relationships are adopted. Dell adopts the lean just-in-time pull concept as a way of managing its supplier relationships (Chaffey et al., 2006). Such ensures that suppliers have the potential of restocking the parts at only that time when the need arises. In practice, the concept is sophisticated since the company does not have mass-production, but focuses on build-to-order that demands suppliers and Dell to have special components in unpredictable quantities.

Supplier relationship management facilitates in the achievement of the level of preferential treatment (Dell, 2017). Such occurs when great trust and strong bonds are established in the relationship of the suppliers. Stronger relationship will ensure that Dell is able to get in touch with the latest innovations, handle issues of fluctuating capacity in the manufacturing sector and obtaining the best terms of sales (Muhammad Nouman, Muhammad Shahid and Haji, 2017). The relationships also create an opportunity for the company to learn when suppliers are undergoing hardship or change and offer an opportunity to help or step in, as well as get adequate time for sourcing products from other suppliers in the market.

A good supplier management strategy also creates an opportunity for the company to have a good arrangement of suppliers based on reliability and importance. Such includes having key performance indicators of all the suppliers, which facilitates in improving the time for the supply and ensuring that the products being provided by suppliers are of high quality level (Crișan, 2016). The relationship also will help the organization to monitor the production of its PC components from the suppliers. This will facilitate in ensuring that there is no compromising with the quality of the components, which could negatively impact the quality of the PCs.

To meet the higher demand of the customers, a firm, such as Dell should close work with suppliers, analyze findings and conduct regular audits. The management of supplier relationships should also strategically help global companies to have high standards and use of the existing assessments, which include the Higg Index. Thus, the firm will have a good approach for managing and planning its interactions with services and goods providers (Turban and Volonino, 2012). Therefore, supplier relationship management will assist in the managing communications and streamlining transactions.

Conclusion

A logistics strategy, which is successfully implemented, is vital for the companies that are highly dedicated in ensuring that the service levels are kept high in spite of the changes in supply chain. The main goal is to ensure that the firm is able to deliver services to customers as they want them in the market. Such should be accomplished through a minor expenditure in the firm.

Dell is a firm, which is not engaged in the complete manufacturing of the PCs. As such, the company has to rely on suppliers who manufactures the component and sells for assembly to have a complete PC. Thus, supply chain management is a vital thing for this firm. Establishing great and long-lasting relationships with suppliers is also an integral factor of consideration, which will steer the organization to better performance in delivering quality services to its customers.

Furthermore, the direct sales model for the company gives it the advantage of ensuring that it is able to provide high-quality products, which meets the needs of the customers. Thus, supply chain management and logistics of the company should focus on ensuring that suppliers and customers are maintained throughout the system of the company. Such management will ensure that the organization has the potential of achieving success in its business environment and deliver quality services in the competitive market environment.

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