Supply Chain Management: The Heartbeat of Dell

A human heart is a great example of an effective supply chain management system. To the unsuspecting owner, it transparently replenishes the blood supply by providing red oxygen-rich blood into circulation, and retrieving. When demand for oxygen to the muscular system increases, the heart rate increases as well, furiously pumping through four chambers each with a series of valves and flaps which restrict blood flow in one direction. When demand is decreased, the heart rests, pumping slower as required. In a similar fashion, effective supply chain management system work with actions unbeknownst to its customers. Customers are able to order goods and services at competitive prices, and how these items are acquired goes unnoticed.

To the casual observer, Dell Corporation's business is deceptively simple and operates as seamlessly and effectively as their own heart. For example, an interested customer goes onto the Internet, prices and orders a computer customized with a desired set of name-brand components, and 2-3 days later it is delivered right to their doorstep. Due to the seamless nature of the ordering and delivery process, the customer fails to notice the tremendous undertaking of coordinating with different suppliers, meeting demands of its customers, assembling a built-to-order computer for each customer, and even efforts involved in delivery of the product. The success of these processes is a result of Dell's industry leading supply chain management system. The brilliance of Dell's concept is a tribute to the coordination, planning, and information sharing that has been carefully laid out and adjusted to maintain a competitive edge. The end user misses all the behind the scenes activities and only realizes they have quickly and painlessly received a quality product at a very good price.

Since 1984, the Dell Computer Corporation has pioneered the direct marketing channel of PCs and their marketing...