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Quintessence of Supply Chain Management

Question:

Discuss about the Quintessence of Supply Chain Management.

Answer:

Introduction

Organizational success is often a function of various managerial elements put together by a company’s governing council. Effective leadership, a productive human resource fraternity, availability or resources as well as trained personnel are some of the basic logistical issues which deserve to be addressed at all times. When one or two sectors within an organization are neglected then success becomes an elusive achievement in most cases. In this report, the outcome of careful study of Dell case study shall be outlined and discussed in details. With references to the case study, the report shall describe the core aspects which led to the organizational success of the company in question. This shall be done in comparison to another successful company. The outline shall also involve a discussion of the concept of sustainability with reference to Dell and some of the ways in which the studied organization could maintain its competitive advantage. Relevant recommendations as well as a befitting conclusion shall then be coined based on the main values outlined in the report (Bidgoil, 2015, p.104).

The Dell Company is one of the leading electronics multinationals based in the United States. Ever since its inception, the company has continued to grow in ranks and various areas ranging from the effective marketing strategies to a wide range of products served to different consumers across the world. The company does not only apply computer appliances but also deals in other electronic devices including printers, hand held, cartridges as well as the related accessories. It has a wide consumer base with outlets spread in different parts across the world (Jones, 2016, p.23). A good chunk of its market is in Europe and Asia while Africa and other continents make the remaining portion of the market in the middle of the high level competition. As deduced from the case study, the company has put in place a number of managerial strategies especially in the supply chain fraternity. These strategies have mainly been aimed at increasing the level of the company’s contact with the customers. True customer satisfaction goes a long way in enhancing company sales and sustainability despite the high level of competition from other established companies like Microsoft, Samsung and Apple.

According to Malik (2010), one of Dell Company’s strengths is the relatively stable market which the company has over the past years.  Despite the high level of competition faced from other companies dealing in similar products, the company has maintained a firm streamline of cohesive relationships with its customers through organized and effective delivery channels. The case study describes the market environment in which Dell operates as a turbulent one with a lot of dynamic activities happening each and every new day. This has majorly hindered the company from enjoying market dominance hence the need to come up with the relevant counter strategies. Control of market prices and increasing the range of products distributed to the market are some of the approaches employed by the company. Dell has also ensured that its products take a shorter supply chain and in some cases uses direct link with suppliers in order to remain competitive and increase effectiveness of flow of products. The company’s market presence can be attributed to various other elements which shall be delved into in the subsequent sections of this report (Blanchard, 2004, p.28).

Direct Customer Involvement

As pointed out by Shah (2010, p. 21), the Dell Company has done a lot in cutting the costs involved in long supply chains by introducing direct to the consumer strategies. It is a fact worth noting that in a supply chain, each collection and distribution point involves an inventory. Reducing the number of these points reduces the total inventory and hence the cost involved in supplying products to the products is greatly reduced. Direct to the customer does not only reduce the number of inventories but also goes a long way in improving convenience and distribution effectiveness. This implies that a customer can make a direct order from any of the company’s outlets distributed in strategic locations.  Additionally, due to the direct to the customer supply strategy, goods take a shorter time to reach the clients. This plays a pivotal role in enhancing customer satisfaction. Such effective approaches in business are likely to attract a consumer to come back for more as the relationship with the company grows to better levels. Good customer retention eventually boils down to market stability (Baziotopoulos, 2008, p. 23).

In order to adequately fulfill the client needs, it is important for a company to have a good grasp of the demand trends (Wallenburg, Cahill, Michael and Goldsby, 2011, p.12). This enables the organization to identify the specific portions of the market which would be more receptive to particular products. With such segments identified, the company can then channel its supply chain objective to serve the projected areas. The Dell Company has adequately achieved this through the implementation of demand forecasting.  With the reduction of the number of intermediaries in its supply chain, Dell currently faces fewer obstacles in its bid to reach the clients. As a result, the company can be able to directly deduce from the customers their specific needs and hence come up with a notable demand trend. When the supply is made objective, the company reduces costs of operation in addition to retaining its client base which generally encourage organizational success.

The emergence of technology has made supply chain management not only effective but also less costly and convenient on the side of the customers (Raue and Wieland, 2015, p.20). Through the incorporation of technology in management, business organizations can now use the internet to perform transactions and also interact with its clients. The Dell Company has not been left behind either. The fact that it is one of the leading producers of computer products and other Information Technology related devices has made the incorporation of eCommerce quite easy. The company can now sell its products to the clients through online platforms mainly its website and selected media outlets. These avenues do not only allow the transactions but also offer the company a good opportunity to have a real time interaction with its clients. Through this, the company can get direct feedbacks from the customers concerning their products and effectiveness of services. These feedbacks offer the company a good opportunity to make the necessary adjustments especially in its delivery services and hence ensure that clients are satisfied as much as possible. In addition, real time interaction with the clients enables the company to identify the specific supply chain approaches which would adequately fit the demand schedules. Each of these aspects has a special way of enhancing product sales which eventually leads to organizational success (Christopher, 2010, p.11).

A wide market area ensures an organization’s sustainability. In order to serve a wide variety of customers, it is important for a company to vary not only its products but also the product prices. For instance, Dell Company has come up with production approaches of different computer sizes and varied specification meant for different age groups, tasks as well as periods. Cozzolino (2012) points out that mass customization are a strategy which does not only ensure a wide market but also reduces the costs involved in the in-process inventory. Producing a wide range of products equally simplifies the production process which in the long run minimizes the related costs.

Close Supplier relationship

The Dell Company does not only have close links with its customers but has also maintained health relationships with its suppliers. Proper relations with the middlemen give room for flexibility in the operations involving the supply of products. For instance, the company is able to call off an inventory even on a short notice without adversely affecting the process of distribution. In addition, the good relations with the suppliers give the company an easy avenue through which new products can be introduced into the supply chain without necessarily affecting the flow process. In a nut shell, the company is able to continuously improve its processes based on the strength of its relationship with the various stakeholders in the supply chain.

One of the core pillars of organizational success is a productive, competent and motivated work force. The Dell Company comprises a number of skilled personnel each of which is charged with specific responsibilities which are collectively aimed at achieving the company’s goals and objectives. Division of responsibilities is a common strategy which has been used by the company to ensure a more fulfilling working environment (Donald, 2012, p.23). Dell uses the approach of single person build which does not only improve productive but maintain the competency level of each individual. In this case, any defects in a product can be traced back to the person who built it and the necessary adjustments made easily and faster. The reversal period is reduced when the responsible is easily tracked which in turn improves the level of production within the company. The company also has a formidable reward scheme which targets the competent and consistent clients. This therefore causes individuals to give their best hence ensuring that the products released into the supply chain are in the best condition.

Efficient Leadership

The Dell Company can owe its immense success to the founder and owner Michael Dell. When the management strategies put in place are effective, the flow of processes within the organization becomes equally successful. The company’s top leadership has been effective since its inception and the incorporation and implementation of Mr. Dell’s ideas at the top management level has played a crucial role in enhancing the success of the organization.

The emergence of a company in a market may not necessarily be a major achievement. The ability of the company to retain its competitive edge in the very presence of the dynamic market is an aspect worth celebrating. The fact that Dell has continued to rise up the ranks over the past years is a clear indication that it has achieved sustainability. The market is characterized by the presences of other successful multinational like Microsoft and Apple which in some cases has diminished the presence of Dell’s products (Poluha, 2016). However, through proper market segmentation, study of demand and supply trends, variation of products as well as prices, and the company has ensured a firm grip on its selected pool of clients. The customers are the major determinants of a company’s sales hence retaining them implies that the company is able to develop progressively. Additionally, the company has incorporated the use of technology in executing transactions and marketing strategies. This has allowed a direct touch with the clients hence the ability to deduce their feedbacks which can in turn be used to improve processes within the organization.

Conclusion

From the analysis of the case study above, it can be deduced that the Dell Company has been and therefore remains one of the most successful multinationals in the world. The study also reveals the incorporation of efficient leadership strategies as one of the reasons behind the company’s success (Ronald, 2007). The core point of focus is the manner in which the company has countered the challenge of a turbulent market to enhance good sales and customer retention. In order to meet the need of different age groups and preferences, the company conducts variation of product specifications without making the production process complicated. This strategy not only ensures that the needs of most customers are met but also sees to it that the production costs are kept at a bare minimum. The company’s supply chain is also simplified and involves fewer intermediaries which give room for direct to the customer relations. Effective consumer-company relations have a special way of enhancing organizational success. Finally, the efficiency of each organs described above can be attributed to the company’s top leadership whose management skills have remained remarkable and effective towards the achievement of company goals and objectives.

Recommendations

Despite the success that the organization has achieved over time, it is a fact worth noting that there are specific areas which it could adjust on in order to ensure a holistic development and growth over time. Some of the recommendations have been summarized below.

  • The company ought to expand on its range of products in order to further increase the scope of its customer base. In addition to producing the gadgets like computers and printers, the company ought to further diversify the supply of related products for instance the ink cartridges, more spare parts and better alternatives in case of client dissatisfaction. The range of products may also involve producing very cheap and affordable devices which could be used to address the needs of the customers in the deeper and rural set ups, a segment that has mostly been ignored.
  • Dell could also increase the effectiveness of its supply chain by increasing the number of assembly points. In the current set up, most of the company’s assembly points are located in major cities with minimal outlets. Increasing the number of these holdings may be costly in the establishment stage but can be effective in the long run. For instance, it reduces the delivery time which enhances convenience and consumer retention.
  • The company could also enhance the scope of its after sale services in addition to varying the prices of the products to fit the needs of a variety of clients. Studies indicate that customers returning especially in case of a defective product are caused to wait for long periods before the issue is corrected. This may not only inconvenience the clients but also ends up pushing them away from the company. A better after sales service scope would mean speedy measures of dealing with the consumers’ grievances which enhances satisfaction and hence retention

The recommendations above are practical and have majorly been the core stepping stones towards the success of other multinationals like Coca Cola, Samsung and Microsoft. Because they have worked and propelled these companies to such heights, implementing the same at Dell would assure the organization of more success.

References

Baziotopoulos, P. (2008) An Investigation of Logistics Outsourcing Practices In the Greek Manufacturing Sector.  Journal of Management. 23(1), pp. 24-34.

Bidgoil, M. (2015) The Handbook of Technology Management: Supply Chain Management, Marketing and Advertising, and Global Management, vol 2 (1 ed.). Hoboken, New Jersey: John Wiley & Sons. p. 104

Blanchard, B. (2004) Logistics Engineering and Management. US: Pearson Prentice Hall.

Christopher, M. (2010) Logistics & Supply Chain Management: creating value-adding networks. New York: Prentice Hall.

Cozzolino A. (2012) Humanitarian Logistics and Supply Chain Management, In Humanitarian Logistics. New York:  Springer Berlin Heidelberg.

Donald, M. (2012) Supply Chain Logistics Management. New York: McGraw-Hill.

Mallik, S. (2010) Customer Service in Supply Chain Management: An Introduction to Supply Chain Management. London: Palgrave Macmillan.

Handfield, R., Straube, F., Pfohl, H.C. & Wieland, A. (2013) Trends and Strategies in Logistics and Supply Chain Management: Embracing Global Logistics Complexity to Drive Market Advantage.  Journal of Business Logistics, 2(1), pp. 3-9.

Jones, J. (2006) Integrated Logistics Support Handbook. US: McGraw-Hill Logistics Series.

Raue, J. and Wieland, A. (2015) The interplay of different types of governance in horizontal cooperations: a view on logistics service providers. The International Journal of Logistics Management, 26(2), pp.3-7.

Poluha, R. (2016) The Quintessence of Supply Chain Management: What You Really Need to Know to Manage Your Processes in Procurement, Manufacturing, Warehousing and Logistics (Quintessence Series). New York: Dordrecht.

Ronald H. (2007) Business Logistics: Supply Chain Management. New York: Pearson Education.

Shah, A. (2010) Dell Acquires Systems Management Company KACE. Journal of Logistics Management. 3(1), pp. 17-21.

Wallenburg, C., Cahill, D., Michael Knemeyer, A., and Goldsby, T. (2011) Commitment and Trust as Drivers of Loyalty in Logistics Outsourcing Relationships: Cultural Differences Between the United States and Germany. Journal of Business Logistics, 32(1), pp. 83-98,

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