SUBMITTED TO:

Wasif Sayed Choudhury

Lecturer
Department of Management
North South University
SUBMITTED BY:
Md. Hasibur Rahman 1610408030
Md. Nafiul Kadir 1610698030
Md. Imtiaz Mahmud 1610825030
Supply Chain Sakibul Hasan 1610708630
Anika Tabassum Munia 1620691030
Management Practices Sumona Haque Shila 1620586030

of DELL
Group Assignment | MGT314
 Executive Summary

This assignment is made on the analysis of supply chain management practices of Dell. We tried
our best to gather authentic information by intense research on the internet as much as possible
and relate them with what we were learned in the class.
The report is divided into many parts that includes the supply chain management functions. The
first part starts off with the Company Overview which includes the company profile that describes
about the company in general. It also provides a brief history about the company their goals,
mission, vision and what they achieve throughout their long journey. The next part is Dell Push-
Pull Strategy where we analyze their production and some strategies. The third part is The Function
of Supply Chain Management where we discuss their management activities, services and how
they try to build relationship with their customer. The fourth part includes two types of logistics –
inbound logistics and outbound logistics. The fifth part of the assignment where we analyze how
bullwhip affect them and how Dell avoid bullwhip. The next part is kraljic Matrix, through this
matrix we analyze their items and their supplier. Then we provide some recommendations which
will help to improve the overall performance of the company. In the end we conclude our
assignment with conclusion.
We tried our best to implement all the knowledge that we gained throughout the semester to
complete this assignment.

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 Table of Contents
Company Overview of Dell ........................................................................................................................ 3
Supply Chain Overview .............................................................................................................................. 3
Dell Push-Pull Strategy............................................................................................................................... 4
The Function of Supply Chain in DELL................................................................................................... 5
Logistics ....................................................................................................................................................... 6
How does Dell’s supply chain deal with the bullwhip effect? ................................................................. 7
Kraljic Matrix of Dell ................................................................................................................................. 8
Recommendations ....................................................................................................................................... 9
Conclusion ................................................................................................................................................... 9

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 Company Overview of Dell

Dell is a diversified information technology company which runs business directly to customers
cover a wide range of global products and services. It’s an American company founded by Michael
Dell in November 4, 1984. Michael Dell found PCs limited when he was a student of The
University of Texas. He started his business from the dorm room with a very little funding and
now dell is a billion-dollar worth company. Michael Dell was a school dropper who wanted to
focus full-time on his growing business, after getting about $300,000 in expansion-capital from
his family. Starting from a dormitory room Dell is now one of the largest organizations in the
world with a net worth of $18.6 billion. Today Dell is dealing with more than $5.4 billion
customers every day. Since Dell designs, develops, manufactures, sells and supports its products.
Dell needs a strong supply chain. So, Dell has created built-to-order strategy where customers can
have their own customized products. Besides, Dell has its manufacturing facilities in a different
geographic location like USA, India, Brazil, Malaysia, Slovakia, Ireland, etc. Spanning over 20
years, Dell has successfully built an efficient team of 103,300 employees who are working in its
different department.

Supply Chain Overview

In recent times logistics and supply chain management have become the most vital issue for
organizations. Dell has realized this from initial and so by putting more emphasis on its logistics,
supply chain management and direct sales strategies it has become one of the most successful PC
companies in the world. In the beginning, only Dell adopted its key supply chain strategy of
direct sales, initially, they use to take orders on the phone according to customer’s condition.
Then later they do try to use retail channel from 1990 to 1994, but after that, it returned to its
direct model and grew quickly and in 1999 it became the number one PC Company in the United
States and among all pc companies in the world. Michael Dell implemented this unique supply
chain strategy and his successful way of putting them into practice played a considerable role in
Dell's success.

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 Dell Push-Pull Strategy
1. Minimal inventory counts: It allows them to reduce their cost of capital on inventory besides
this it minimizes inventory and increase efficiency. (JIT)
2. Direct sales: Here their philosophy is bypass the middleman and direct go to the customers
that want to buy their product.
3. Strong bill to order platform: It’s a production approach where products are not built until
the confirmation of order. If they witness high increase in demand, they increase the firm’s
production.
4. Eliminate mark up: When they are avoiding the middleman, they are basically reducing a
portion of their total cost before going to the market.
5. Direct end user support system: They provide their customers with 24/7 support system.
This enhances their relationship with their customers.

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None of above aspect can be functional unless they have below written infrastructure:
1. The vendor’s location must be close to Dell’s factory as they cannot run push-pull, if the
supplies take so time to reach production house.
2. The vendor need to see Dell as their first priority so that the vendor meets Dell’s demand very
quick and efficient.
3. Between vendor and Dell they should have Strong contractual agreements which includes
delivery terms, payment terms etc.

The Function of Supply Chain in DELL

There are some functions of DELL related to supply chain management are as
follows:

Identify Customer Values: Organization used customer knowledge with the help of
contracts, survey results, business intelligence data and platform sales to begin its customer-
centric view of value. Dell invested in resources to complete detailed configuration profitability
analysis, targeted surveys and external marketing insights from multiple industries.

Understand the External Environment:

The supply chain is specifically related to the external business environment with the help of
supply chain the DELL can easily understand the external environment.
This the supply chain of the opted organization DELL and its function that are related to the
supply chain of the DELL.
As companies increasingly put into action their supply chain to compete and attain market share,
spending and action in this area are remarkably on the upswing. Technology and process
upgrades at forward-thinking companies evidently demonstrate that supply chain excellence is
more broadly established as an element of overall business strategy and that growing value to
customers is not just management’s, but everyone’s business.

Customer Service Management Process: Customer service management process is the

concern with the organization and its customers. Because customer service is the cause of
customer information.
Customer service management provides the customer through real-time information on
arrangement and product accessibility during interfaces with the organization’s manufacture and
distribution operations. A good organization uses the following steps to build customer relations:
1. Verify jointly pleasing goals for organization and customers

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2. Set up and preserve customer relationship
3. Produce optimistic feelings in the organization and the customers

Procurement Process: Strategic tactics are drawn up with suppliers to maintain the
manufacturing current management procedure and the growth of new products. In an
organization where operations expand internationally, the source has to manage on an
international basis. The preferred result is a win-win connection where both parties take benefit
from each other, and a decrease in time which is required for the design series and product.

Logistics

Inbound logistics:

Dell has a global supply chain network which it has achieved very well through chain of
warehouses that serve its manufacturing facilities and retail operations. It maintains manufacturing
facilities located in United States, Malaysia, China, Brazil, India, Poland, and Ireland. The brand
sources raw materials from suppliers located around the world. Their main suppliers are Intel and
Microsoft companies. Dell works with external logistics partners to improve its inbound logistics.
Their inbound logistic materials need to fabricate pcs are handed by the supplier’s logistics
companies. Dell uses the Just in time Strategy for supply chain and inventory management.
Sourcing is made easier by partnering with logistics providers like DHL, UPS and others. It was
revealed that Dell's value chain is at present at its most grounded in the region of inbound logistics.
Dell utilizes ongoing innovation to guarantee that its inbound logistical activities stay under its
control.

Outbound logistics:

Dell has achieved its outbound logistics very well with help from external logistics providers.
Third party vendors and logistics providers play a significant role in providing products and
solutions to customers. Dell uses its network of distribution centers and retail partners to make
deliveries to the final customer from a close location. Dell completes the order fulfillment in a very
short time. In case of outbound logistics, it got number of best transportation and logistics
companies like DHL, CEVA, FEDEX, ODFL, SAIA, UPS and SCHNEIDER which ships the

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exact order to exact customer at the given time which on the whole helps to increase customer
satisfaction. Whether in terms of inbound or outbound logistics, the focus of Dell remains on
reducing the environmental footprint. But it was seen that outbound logistics tasks are often
considered to be the riskier of the primary activities.

How does Dell’s supply chain deal with the bullwhip effect?

Hypothetically, the consequence of Bullwhip does not occur if all orders meet the exact
requirements of each retro. Having a very fast and responsive information system is one of the
ways dell prevents this happening. Dell built web pages where suppliers can predict component
demand by viewing the available stock and avoiding unnecessary component and product related
issues.

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 Kraljic Matrix of Dell

In terms of Kraljic Metrics Dell has also four types of items. They are Leverage items, non-critical
items, Bottleneck items, Strategic items.
Leverage items: In terms of Leverage item Dell has many suppliers like Boe Global, Samsung,
Toshiba from which Dell generally buys LCD-displays, Batteries, Parts & components.

Non-critical items: Non-critical items of Dell like Laptops, monitor, Printer etc.

Strategic items: Dell has strategic alliance with several companies like Nutanix, VMware,
Microsoft, Intel etc.

Bottleneck items: Web servers of Dell.

High

Leverage items: Strategic items:

LCD-displays, Batteries, Parts & components Nutanix, VMware
Profit risk

Non critical items: Bottleneck items:

Laptops, Monitor, printer Web servers
Low

Low High
Supply risk

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 Recommendations
• Keep optimizing the Supply Chain Management System so as to not lose out on
competition in falling prices and help suppliers keep up with shortages.
• Dell should implement their own transportation service. The main complications are the
amount of time and money needed to reform.
• Dell was not able to gain a sustained competitive advantage due to its dependence on the
direct sales model and traditional business strategies. Like its competitors, it must invest more
effort in learning and innovation. It should also evolve its global strategy such as responding to
local needs and adopting other transnational strategies.
• In the competitive PC market, Dell was forced to develop new capabilities such as selling
through retail channels. However, doing so eroded its core competencies. Instead, Dell should
protect and emphasize their existing capabilities rather than developing new ones.

Conclusion
The impact on Dell's business is great, and it becomes more important for Dell to restore its
competitive advantage. Dell has an enormous task of catching up with the rapid changes in
technology and the evolving strategies of its competitors. Dell’s rise and fall in PC industry have
sent an important message and reminder to itself - that a sustained competitive advantage,
motivated by continuous changes, is crucial for the future of the company. Dell doesn’t
manufacture all of the components of its finished goods. They just fit all of the components of the
finished goods and sell them according to their customer wants. Because of that Dell falls under
the secondary sector industries. Michael Dell’s strategy is excellent and would triumph issues that
could bring other companies down given that they are frequently developing with the competitive
environments and act on the basic strategies of direct selling, build-to-order manufacturing and
strategic partnerships in real time thus giving way to JIT and Virtual Integration. As a result, Dell
became one of the successful pc maker company in today pc market.

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 References
1. Dell. (n.d.). About Dell. Retrieved from https://www.dell.com/learn/us/en/uscorp1/corp-comm
2. Farfan, B. (n.d.). Discover the Mission and History of Dell Computers. Retrieved from
https://www.thebalancesmb.com/dell-computer-company-profile-2892813
3. Dell. (2019, April 04). Retrieved from https://en.wikipedia.org/wiki/Dell
4. Function Of Supply Chain In Dell Business Essay. (n.d.). Retrieved from
https://www.ukessays.com/essays/business/function-of-supply-chain-in-dell-business-
essay.php
5. Dell Supply Chain Management. (n.d.). Retrieved from
https://www.ukessays.com/essays/business/logistics-and-supply-chain-management-of-dell-
business-essay.php
6. Johnson, I. (2012, June 11). Dell Push-Pull Supply Chain Strategy. Retrieved from
https://www.youtube.com/watch?v=4ocldjqiiiE
7. Colt, G. (2019, February 09). Dell's Competitive Advantage & Strategy. Retrieved from
https://toughnickel.com/industries/Dell-Competitive-Advantage

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