The importance of the supply chain decision

Success of the supply chain depends on a close association between the efficient management of flows (information, funds and products) and its design. Dell has put together its success on planning, operation and superior design of its supply chain. In shorter span of time, Dell has become the world’s biggest personal computer manufacturer. The significant part of Dell’s success is the efficient flow of information, funds and products inside its supply chain.

Dell sells directly to the customers and circumvents retailers and distributers. Dell understands the needs and preferences of its customers and has close relations with customers that help in developing enhanced forecasts. In order to match the demand and supply, Dell makes strong effort to attract customers in real time via internet or phone calls towards the personal computer configuration that could be build given the parts/components available.

In operations Dell centralized inventories and manufacturing in few locations and delay last assembly until instructions of orders get there. This strategy makes Dell able to keep low levels of inventory and provide an immense variety of personal computers configurations. Dell’s competitors sell through retailers and hold several weeks’ figure of inventory. Dell preserves no inventory in few components such as monitors manufactured by Sony. Transporters pick required number of computers from Dell’s Texas plant and pick requisite monitors from Sony’s plant in Mexico. Dell then assembles them by customers’ specification and delivers to the specific destinations. This strategy permits Dell to save money and time related to the supplementary handling of monitors.

Dell supply chain success is due to the efficient flow of information at all the stages on the present state of demand; this is the importance of the supply chain decision at Dell Company.