Dell operates by an on-line business model equipped with mass customized manufacturing which provides instant web communication protocol with customers at anytime and anywhere. Customers able to compose their own configuration from order list and free from bounding with fixed configuration.
All packages are made upon request with no finished goods available, there is no depreciation issue.
With elimination of field inventory, a direct delivery without passing through distributors allows significant savings of running cost and time that contributable to the profit margin.
Direct communication with customers and end-users without intermediaries between helps to prevent delay response and to provide own platform to receive on time signal or comment, understand what customers like or unlike.
2. What were Dell’s strategic and competitive objectives at this time? Strategic objectives
Best direct customer experience – Not just focusing on product quality but most importantly concern about quality customer experience that drives to key profit and business survival. Customer satisfaction drives business success. Three basic metrics relates to maintain quality customer experience, ship on time; Initial Field Incident Rate; first-time call, on-time fix when customers find defects.
Low cost provider – To drives the cost down by reducing lead times of all operations, production built to order and eligible to control cutoffs of components for changing models and engineering in terms of managing obsolescence effectively.
Virtual Integration – Dell does not manufacture parts and writes no major software therefore she is not competes with suppliers. The R&D team collaborates with suppliers to deliver best available technology for new model and options, they orchestrate the suppliers and avoiding sour notes.