Dell Computer’s I-Business
Dell has been a successful I-Business since it began its transformation in 1993. Their transformation started when the company realized that they had become to big and had stopped seeing profit growth. Dell experienced a loss of $75 million during the first quarter of 1993 (S.B. 1992).
Michael Dell, the creator, quickly pulled his experienced managers in to brainstorm and soon came up with the virtual integration concept, which would reduce operational cost and meet customer demands by connecting the right parts together in the business. The work began to create a cooperative relationship between the company and it’s suppliers. By forming these relationships Dell was able to have suppliers bid and Dell was able to reduce its number of suppliers by more than half by 1998. Dell wanted their customers linked directly to the manufacturer to allow for cost cuts, quicker delivery times, and a more reliable finished product. Dell was able to do this with the help of their Internet service “valuechain.dell.com, which enables Dell to share inventory data, design-databases, quality data, and technology plans to its suppliers. These changes reduced the inventory sitting time from a month to a week, and they didn’t waste resources building computers that wouldn’t sell, instead they only built what the customized computers the customers wanted.
Michael Dell has focused the efforts of his research and development program towards improving quality in manufacturing. He is also constantly trying to find managers that are capable of responding to rapid market shifts. They have taken their e-business and used the Internet to run it parallel with Dell’s supply chain strategies. Dell has shortened its need for plant, equipment, and Research and development by buying the required components from the manufacturers and assembling the components as they sold, providing the customer a custom computer. Recently Dell acquired Exanet and with...
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