Manufacturing strategy the Dell direct way

Topic: BusinessComparative Analysis
Sample donated:
Last updated: April 17, 2019

” First it is about satisfying and where possible delighting a customer. Second it is about making the best use of resources, and to leverage these resources either alone or with partners.Third, it is about developing capabilities within operations which are superior to other competitors and which other competitors either cannot copy or will find it extremely difficult to copy.

In today’s turbulent competitive environment, a company more than ever needs a strategy that specifies the kind of competitive advantage that is seeking in the marketplace and articulates how that advantage is achieved.The need for agility and flexibility as core features within strategic operations is evident in the computer industry. Computer hardware has gone through a remarkable change, based on three inter-linking attributes: smaller, faster and cheaper products.

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Dell achieved a breakthrough in the field.Dell’s remarkable strategic operations capabilities have practically reinvented the PC industry. Dell is more focused on speedily manufacturing and delivering inexpensive, top-quality PCs.Some of the strategies that that Dell utilized to achieve these are:1. Customer focused Operations.2. Excellent layout.

3. Excellent but not excessive process Technology4. Commitment to innovation.

5. Superb Process and product Quality6. Expert Inventory Systems aligned with Strategic partnerships with suppliers.7. Trained and dedicated people who actually care what they are doing.8. Process Improvement without Increase in cost (BPI)Customer Focused Operations:Mr.

Michael Dell’s statement” Both suppliers and Customers must be treated as partners and collaborators, jointly looking up for ways to improve efficiency across the entire spectrum of value chain, not just in respective businesses.Dell’s focus on customers led to it customizing computers. The system were provided for a wide range of products and over a wide range of configurations.

Dell’s state of Art Manufacturing Units caters to a variety of products ranging from desktops to high-end servers. The assurance during acceptance of Order is fulfilled with the delivery of product in less than a week.Excellent LayoutBut the biggest constraint to Dell’s ability to customize was the plant layout. Dell needed to overcome the challenge by setting up a layout that would cater both to continuous assembly, product flow and fixe position layout.Dell achieved a solution using the continuous flow layout.

But to perform with a high efficiency in this layout required using flexible manufacturing, lean manufacturing and Agile manufacturing. This utilized the creation of small blocks known as cells and movement in and between cells was streamlined. The cells were arranged based on volume of work done, variations in process routings and other parameters.These cells had their own tracking devices and followed the Toyota Pull system, where the next immediate cell pulls a part or product from the immediate cell, prior to it.Commitment to InnovationHere again, Dell has made a place for itself. It’s continuous process to improve and make the systems user friendly, has led to many patented technologies, which have made the systems, better than before. Also the innovative technologies that were implemented have made assembly of systems much quicker and much less defective.

The ability to identify snags by use of software and diagnostic lights, the quick burn tests, etc have made the products more reliable and customer focussed.Excellent but not Excessive Process Technology:Also an excellent but not an excessive process technology is very essential to stay competitive in the market. Processes like Agile Manufacturing and Just in Time have played a significant role. A process known as “Kitting” is where all the components are put into a standard container .

The pixellite system tells the associate which parts to add to the kit. This also provides automated inventory tracking. The chassis and the container move together. A bar code helps keep track of system from start to end. This helps all the departments keep a track of inventory from the place of work. But a Plant where everyone is working all the time is inefficient.Expert Inventory Systems Aligned With Strategic Partnership with Suppliers:Dell uses a world class Just in Time inventory system.

Most companies keep the inventory in days but this allows it to keep inventory for just a few hours on the floor.This helps Dell to cut down costs on costs of storing the same, and can pass it on the customers. Also this helps pass on the reduced prices on the components to customers, thus being dual focussed.Also the pixellite system of tracking the inventory not only helps the people on floor to use the right parts in the container, but also automates the process Also the use of standard containers is in par with the concept of Just In Time guidelines as defined by Toyota.Also Dell uses the I2 Technology software for supply chain management. Being one of the most advanced software’s for the purpose, and being widely used my many of the Fortune 500 Manufacturing companies, this software has proved beyond excellence to Dell.

But again all this was possible only because of the excellent relationship with the suppliers. Not only Dell, but its suppliers too follow the stringent Just in time procedures, to provide the right parts at the right time, and with the quality that is specified within acceptable limits.This withholds Dell from using excess staff and cells to test the same parts, and can confidently put the Dell logo on these parts before shipping. An example to this being the Sony Monitors, which are shipped with a Dell logo. As per current standards, the monitors shipped from Sony Corporation, for Dell customers, have less than 50 defectives per million and Dell’s trust in manufacturer allows Sony to ship the same directly from the factory to customer than receive the supply to the storage units, open test and then re-pack and send the same to customer. Also Dell’s ability to outsource the manufacture of certain components designed at the research department has helped cut down costs to a major extent without compromise in quality.Also the use of standardized parts, allows for interchangeability and adaptability of the components, hence serving as an alternative to phased out technology and backlog/subbed parts.Trained Dedicated Men who care about what they are doing.

Dell believes that employees are its greatest treasure and takes great care to be in good terms with its employees. Also the people working at Dell are hand picked for the purpose and are trained on the resources and employed. Also the guidelines for usage of tools (both software and Hardware) are specified and standardized across the locations. Hence every employee performing a specific task will do the standardized way reducing errors and maintaining quality. Also the continuous feedback to the employees on the process helps keep updated on better means to perform the same task, more efficiently and in across the locations with same capability.Also the Performance Management process helps the employees to define a goal, a target to meet by the quarter, and by fiscal year. The employees are rated based on the target and their achievements. This helps reduce disparity between people working in same environment.

Process Improvement without Increase in cost (BPI)And last but not the least, Dell’s ongoing efforts to maintain and improve quality without hike in costs has been a major success. Every site and location is in a constant Business Process Improvement, utilizing the tools from Quality analysis and Logistics in every department, right from market survey to after sales support.The creation of a feedback tool, (feedback from sales and from support teams to L3s’ and to Product support group) on current issues and resolutions has made a remarkable improvement in ergonomic and quality products being sold to customers.A result to these efforts is the ability for Dell to mark place for itself in the Market and other manufacturers to attempt to shift from their respective process to the Dell Direct Way.

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