Dell Computer Value Chain

ORGANISATION: Dell Computer Corporation
Background:
Founded in 1984 by Michael Dell with the aim of building relationships directly with customers. Dell is a premier provider of PC products and services sought by customers worldwide to build their information technology and internet infrastructures. Through its direct business model it designs, manufactures and customises products and services to customer requirements and offers an extensive selection of software and peripherals.
Dell’s operations using Porter’s value chain -
Inbound logistics:
Dell has three main factories globally in Austin, Texas; Limerick, Ireland and Penang, Malaysia. The majority of components have to be warehoused within close proximity so suppliers are located close to the factory plants as this facilitates the ease of dispatch of goods whilst lowering costs. Dell established partnerships with its major suppliers using JIT (Just-In-Time) deliveries. Where necessary, Dell provides sales forecasts to suppliers for non-JIT deliveries. To minimise inventory costs Dell opted not to take delivery of bulky items such as monitors and speakers. Such items as dispatched directly to the customer from the suppliers warehouses.
Operations:
Time and cost savings are key issues and Dell utilises the JIT manufacturing process, loading software and testing the PC’s assembled to order. Finished goods are kept to an extremely low-level hence minimising the risks associated with buffer stock. Dell sees its manufacturing process as a way to cut costs and maintain its competitive advantage.
Outbound logistics:
Dell provides direct delivery by courier of the finished goods to the final customer. Supplies of sub-assembly components are delivered directly to the customer by the supplier.
Marketing and Sales:
Dell utilises telesales, media (TV, newspapers and magazines) advertisements in addition to online ads as marketing tools. There are provisions for customer advice on PC specifications and price.... [continues]

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