The Role of Mass Customisation in Dell Corporation

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Mass customisation refers to large-scale production of customised/tailor-made products which are meant to serve individual consumer interests (Asadi et al., 2016, p.1706). The concept utilizes individualism as well as autonomy in delivery of specific features and functions incorporated in a component and linked to anticipated user experience (Tseng and Hu, 2014, p.836) Mass customization has gained fame in the united states market with firms such as Hewlett-Packard, Ford, Chrysler general motors and proctor embracing it despite being on opposite continuum in the past (Selladurai, 2004, p.395). Therefore, the corporation is set to cater to all the needs of all business enterprises a move that triggers healthy customer relations through mutual responsibility and accountability. The paper focuses on mass customisation and how it boosts customer relationships in the limelight of Dell incorporation.

Company Summary

Dell is a computer company based in Texas, USA. Dell incorporation is among the biggest sellers of computers especially desktops and laptops.  The company was found by a 20-year-old Michael Dell, a then University of Texas student in 1984 as PCs limited. The company started with a capital of $1000. As at 2009, the company had a human resource base of 76500 and asset value of $26500 billion. The initial strategy of Dell was direct sells to customers at relatively low prices. Thus, the company majored in cloning IBM computers for sale.  In 1990, the company attempted to sell its products through warehouses and superstores but failed. Therefore, they refocused to personalised transactions utilising the direct sales model.  In 1996, the company started selling its products through an internet website.

Mass Customization and Customer Relations at Dell Corporation

Customer relations are rooted in their core mission which is to offer the best quality services in accordance to customer needs and expectations while maintaining high quality, competitive prices, class service, accountability and flexible customisation capabilities for superior corporate citizenship. Thus, they focus on customer needs to provide tailor-made products as requested by the customer.

Dell customers are treated equally. However, their needs determine areas of speciality (Myerson, 2018, p.1). Therefore, the company has a priority for each customer but offers diverse solutions which are linked to customer needs. For instance, Dell identifies its vendors and approaches them to provide details on their market base before they deliver respective products. Besides, despite the unique needs they satisfy, Dell has an established customer care conduct through which both complaints, compliments and new market trends are channelled. Hence, they have maximum contact with customers despite differences in Geographical locations (Myerson, 2018, p.1). Since communication is the primary means of responding to the needs and expectations of customers, Dell utilises it as an approach to building positive customer relations, retention and attraction of new consumers.

On the other hand, Dell has divided its customers into two groups. They include corporate and home user customers (Voigt, Buliga, and Michl, 2017, p.55).  Therefore, the equipment presented to each group meets their particular needs. For instance, business people are provided with mainframes and associated equipment whereas home users are offered conventional computing equipment as per their requirements and preference (Voigt, Buliga, and Michl, 2017, p.55).  Dell Vostro is a customised PC designed exclusively for simplifying small business challenges (US, 2018). The system comes with customised user security, telephone support, and top-notch security to protect the user both online and offline. On the other hand, Dell OptiPlex is used for productivity and networking capabilities. Besides, Dell Precision workstations that are ideal for power hungry applications come in three different versions. Dual xenon processors, quad monitor support and AMD as well as Intel processors are incorporated in the devices to give them their respective characteristics as desired by the customer (DELL, 2018)

Thus it is designed for big organisations with the option of customisation as per company storage, and processor speed (US, 2018).

Consequently, Dell does not make either computers or parts (Voigt, Buliga, and Michl, 2017, p.55). They rely on component manufacturers as a way of responding to customer needs. Therefore, the company obtains constituent parts from hi-tech manufacturers as per the customer needs. They then assemble the pieces to come up with a unique design of computer to present to the customer upon being branded; DELL (Voigt, Buliga, and Michl, 2017, p.55). The Strategy is critical as it boosts their accountability to customers as well as consistent in profitability.

On the other hand, Dell gives its customers the liberty to dictate what they want. Through their online platform, a customer can provide specifications of computers they want by specifying the parameters for core components (Voigt, Buliga, and Michl, 2017, p.55). Through the system, Dell gets in touch with the customer who spells out memory specifications, colour, processor type and speed, storage and other equipment. Therefore, Dell is left with the task of finding the devices, assembling them and presenting the finished product to the customer. Besides, the Optimized access site provides a direct linkage between the customer and the firm which in turn serves to create rapport which is a prerequisite for health seller-client relation.

In 1997, Dell established an online platform through which direct sales to customers were made. The move was spearheaded as a way of eliminating middlemen and entering a personal relationship with customers (“Dell supply, production, and Distribution innovation,” 2018).  The e-commerce platform saw the company achieve a maximum of $4 million sales in a day. Besides, they provided preconfigured devices as per customer choice and deeply discounted prices. Therefore, the company attracted more customers whom it built personal relationships that have grown to form a diverse supply network. Also, demand forecast and market segmentation were undertaken accordingly. Therefore, the company was set to promote continuous product improvement since the relationships it enjoyed with customers were already healthy (“Dell supply, production, and Distribution innovation,” 2018).

On the other hand, Dell changed delivery mechanisms in the acquisition of parts to a tailor-made version (Voigt, Buliga, and Michl, 2017, p.55). The company identified hi-tech component suppliers whom it integrated with its production line by allowing them to establish Hubs near their assembly plants (Kotabe, and Murray, 2018, p.365). By so doing, the company came up with a unique inventory management system for each supplier. However, the closes component hubs reduced on its cost of inventory management while boosting the relationship with both consumers and suppliers. Thus, the company could ensure customisation of products by first consulting their suppliers to produce parts in accordance with the needs of the customers (“Dell supply, production, and Distribution innovation,” 2018).

Besides, the company shared market forecasts, production schedules, plans for new products and trends with suppliers to ensure compliance to the market standards and specific user needs (“Dell supply, production, and Distribution innovation,” 2018). The move served as an extension of the mass customisation of products whereby the company focuses on grassroots customisation of the component which is then assembled to produce a user-specific device linked needs (Kotabe, and Murray, 2018, p.365).  All the efforts made were aimed at promoting close relations and minimising the costs of setting up a new component production plant.

Nonetheless, Dell approached mass customisation by incorporating manufacturing cells in its production line. Instead of employees focusing on one item at a time, several employees were meant to perform custom tasks as per the customer needs (Voigt, Buliga, and Michl, 2017, p.55). Therefore, the production floor was rearranged to workstations with each handling a particular task. The strategy saw the company double its productivity per square feet of assembly reducing assembly time leads to 75% (“Dell supply, production, and Distribution innovation,” 2018). The short assembly periods also contributed to customer satisfaction as they did not have to wait over more extended periods to receive their customised products. Seemingly, customer loyalty was gained as a result of timely adherence and addressing customer needs rather than concentrating solely on profitability and company growth.

Consequently, having tailor-made products catalysed the need for the company to be in touch with customers. Therefore, Michael Dell spearheaded the establishment of a feedback feature on their e-platform (McCarthy et al., 2016, p.169). The essence of the feature was to obtaining customer insights and reviews of their products. The company made sure all complain, and the system captures compliments with an immediate response being explicitly offered to customers. Of course, the needs and requirements of the customer were central in building and enhancing mutual coordination which later resulted in the cultivation of outstanding customer relations (“Dell supply, production, and Distribution innovation,” 2018).

Dell Corporation has customised supply and delivery services for the extensive network of markets it occupies. One of the strategies is concentration on the locality. For instance, Dell manufactures their products within nations such as China, Singapore, and most European countries as a way of compliance to needs of the locals (McCarthy et al., 2016, p.169).  All the equipment is meant to comply with the requirements of the tech-savvy regimes, corporates, professionals, and executives. Therefore, customer engagement channels are kept strong making Dell stand out ahead of other corporations (Bhasin, Hitesh, et al., 2018). Besides, concentrating on localities ensures that there is a wide variety of customer care services. For instance, serviceability of the customised components is eased through service centres across nations in different continental locations.  Thus, dell realised that being in close geographical proximity is vital in carrying out direct marketing and customisation strategy by building a trustworthy customer base. Therefore, one on one relationships are the basis of healthy relationships at Dell (Bhasin, Hitesh, et al., 2018)

The fact that mass customisation is associated with massive production of tailor-made products presents a challenge to firms (Mello, 2009, p.1). The conflict between the output of high quantities and customisation brings in difficulties in rapid implementation of the strategy (Mello, 2009, p. 1).  Thus, the concept takes years for firms to adopt it.  However, implementation of customisation seems impressive to customers since they acquire goods directly linked to their needs hence satisfaction (Mello, 2009, p.1).

Conclusion

Dell incorporation companies’ customisation with other market trends and strategies in achieving a customer-centred approach to service delivery. Therefore, mass customisation at the firm is highly integrated into the production, supply, distribution, and delivery of their unique products to customers in diverse geographical locations. Thus, the firm successfully implemented the strategy with no personal computer company driving it of its established customer base. However, with an increase in complexity of technology and a vast chain of user needs, customisation has become sophisticated in that it may eat into the profits of firms that do not approach it cautiously. Besides, Dell is the only known computer company that has tremendously exploited the strategy since its discovery in the early 1980s by prominent fashion firms like Nike and motor companies such as Ford and BMW. The companies present as mentioned earlier mass customisation as a trend of strong companies which primarily focus on the satisfaction of customers as a priority.

Bibliography

Asadi, M., Soltani, S., Gašević, D. and Hatala, M., 2016. The effects of visualisation and interaction techniques on feature model configuration. Empirical Software Engineering, 21(4), pp.1706-1743.

Bhasin, Hitesh, et al., 2018. “Marketing Strategy of Dell - Dell Marketing Strategy.” Marketing91, 3 Sept. 2018, www.marketing91.com/marketing-strategy-dell/. Accessed 26 Nov. 2018.

Case study: Dell-Distribution and supply chain innovation, 2018. MaRS. Available at: https://www.marsdd.com/mars-library/case-study-dell-distribution-and-supply-chain-innovation/ [Accessed November 26, 2018].

Kotabe, M. and Murray, J.Y., 2018. Global Sourcing Strategy: An Evolution in Global Production and Sourcing Rationalization. In Advances in Global Marketing (pp. 365-384). Springer, Cham.

McCarthy, B.L., Blome, C., Olhager, J., Srai, J.S. and Zhao, X., 2016. Supply chain evolution–theory, concepts, and science. International Journal of Operations & Production Management, 36(12), pp.1696-1718.

Mello, A., 2009. Mass customisation won't come easy. ZDNet. Available at: https://www.zdnet.com/article/mass-customization-wont-come-easy/ [Accessed November 25, 2018].

Myerson, P., 2014. Mass Customization. A Lean and Agile Supply Chain Required. IndustryWeek. Available at: https://www.industryweek.com/blog/mass-customization-lean-and-agile-supply-chain-required [Accessed November 25, 2018].

Selladurai, R.S., 2004. Mass customisation in operations management: oxymoron or reality? Omega, 32(4), pp.295-300.

Tseng, M.M. and Hu, S.J., 2014. Mass Customization. In CIRP encyclopedia of production engineering (pp. 836-843). Springer, Berlin, Heidelberg.

US, D., Why Dell Custom Business Desktops, PC, and Workstations computers. Alienware Area-51 Gaming Desktop Thread Ripper Edition | Dell United States, 2018. Available at: http://www.dell.com/content/topics/topic.aspx/us/segments/bsd/custom_computer_pc_desktop?c=us [Accessed November 26, 2018].

Voigt, K.I., Buliga, O. and Michl, K., 2017. Customised and Built to Order: The Case of Dell. In Business Model Pioneers (pp. 55-66). Springer, Cham.

January 19, 2024
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