Case of Dell: Quick on Its Feet
Started in 1983, Dell grew to top the charts of the most successful IT companies in the 2000s (Our history, 2015). The success of the company can be attributed to the factors such as its innovative approach and the adoption of the approaches that allowed the organization to take the necessary actions, perform daily routine and process information very fast.
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Despite the fact that the products were delivered to the end customer by the third-party logistics companies, the organization has been known for its ability to provide the products in a timely manner.
The leaders of Dell have always viewed transparency in business transactions and communications as the key asset of the organization and the foundation for building successful entrepreneurship. By creating the environment, in which every single step made by any of the parties involved could be viewed by all participants involved, Dell managers reduced the possibility of a corporate fraud to a minimum, therefore, increasing the company’s chances for success.
In addition, the adoption of standardization, which allowed using the same components at different stages of the production process, helped increase the velocity of the company’s production process. Therefore, Dell faced a rapid increase in customer satisfaction rates.
However, the evolution of the environment in which the company operates conditions changes in the company’s design, including the alterations of its SCM approach. Dell, nevertheless, seems to cling to the strategy that made it so popular yet nowadays does not work as efficiently as it has to so that the firm could retain its position as one of the world’s most successful IT organizations.
Particularly, the managers of the entrepreneurship have to focus on the design of the strategies that will help improve product quality. Thus, Dell will be able to regain its position as one of the global IT leaders and become competitive once again.
Questions and Answers
What are the fundamental reasons for Dell’s success?
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Dell’s impressive success can be attributed to the policy of complete transparency that it adopts when cooperating with suppliers. There is no need to stress the fact that information transfer can become tricky in the environment of the global economy because of the issues related to the communication process.
The lack of control over the processes occurring in the partner’s company as well as possible misunderstandings occurring in the course of the communication process may trigger rather disappointing effects including a loss of trust for the partner and a drop in sales. Consequently, the transparency policy, which helps promote trust among the parties involved, serves as the tool for setting any arguments and making sure that the partners could trust each other as reliable and responsible organizations.
What should Dell do next to maintain its competitive advantage? Is its business model still viable?
Although the business model adopted by the entrepreneurship has proven to be quite successful, it seems to have worn out its welcome. The concept of focused manufacturing, which presupposes that the firm’s inventory should be used rationally, is rather adequate; however, sharing the common components as the specified model suggests may be unreasonable for the organization that operates in different markets and, therefore, has to adapt to the specific needs of the target demographics.
In other words, the business model designed by the organization can be viewed as efficient by the firms that are still in the process of expanding and have not grown large enough yet. However, for entrepreneurship that has already expanded and created a range of affiliates, the specified model cannot be deemed as viable since it will require extra costs for the transportation of the reusable resources to other departments.
Will Dell formula work elsewhere? If not, why not?
Considering the application of the unique strategies developed by global organizations to the design of any other company one must bear in mind that the approach in question was designed specifically for a particular organization and its unique environment.
Therefore, it would be reasonable to claim that the application of the model designed by Dell will require slight changes to make sure that it meets the needs of the firm that it is used in. However, a closer look at the model will reveal that the principle of standardization may work for the companies that need a range of common components at the production stage.
Gate Gourmet: Working in Unison
The Gate Gourmet Company has been known as a successful food organization for quite a while. With its management principles rooted deeply in the philosophy of cooperation and information sharing, the entrepreneurship has a lot of potential in the environment of the global economy. Indeed, the latter requires high velocity and efficacy of data transfer and its further analysis is crucial to the performance of an organization and its success among the target members of the population (About Gate Gourmet, 2015).
Therefore, the approach adopted by the company to meet tight deadlines can be deemed as the key competitive advantage of Gate Gourmet. The tools that gate Gourmet used to widen its supply chain work extremely well in the environment of the global economy.
Questions and Answers
What supply chain challenges does Gate Gourmet face when dealing with demand fluctuations from airlines?
The case in point shows quite clearly that the issues related to time constraints are the toughest challenges for Gate Gourmet to handle. The dependency on a large variety of factors that may delay the flight, such as the weather conditions, cooperation between the staff members, the coordination of the latter’s actions, etc.: “Normally, no more than 40 minutes are allowed for all these activities in the tight confines if an aircraft cabin and hold” (Mangan, Lalwani, Bulcher, & Javadpour, 2012, p. 211).
Here in the importance of “working in unison” (Mangan et al., 2012, p. 211) and making sure that the staff’s actions are well paced and cohesive lies.
Explain what a “Bullwhip Effect” in the supply chain is and what such a phenomenon would mean to Gate Gourmet’s operations if it was present.
The phenomenon of the bullwhip effect can be defined as inconsistency and the lack of predictability in the inventory requirements occurring as an organization updates its supply chain and attempts at meeting an increasingly large number of customer demands (Dolgui & Proth, 2010). The bullwhip effect is likely to trigger impressive losses unless an adequate strategy for managing it is introduced.
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To address the problem in question, Gate Gourmet adopted the e-gatematrix system (Mangan et al., 2012, p. 212) aimed at identifying the key tasks and tracking down their completion. Thus, the schedule could remain rather busy yet the organization still managed to satisfy the needs of the customers by transferring the necessary information in a manner as efficient and expeditious as possible.
What supply chain management concepts, methods, tools, and techniques does Gate Gourmet have at its disposal to ensure customer service and resource utilization?
The case under analysis shows that Gate Gourmet adopts the technique of integrating its core processes with the suppliers. The specified approach allows meeting deadlines and addressing the emerging issues in a rather efficient manner. One should also give Gate Gourmet’s leaders credit for putting a very strong emphasis on electronic tools as the key instruments for managing the SCM-related issues.
The combination of these techniques helps the organization thrive in the competitive environment of the global economy and retain high customer satisfaction rates by providing the services of the highest quality. The incorporation of e-tools creates premises for the enhancement of the specified cooperation, therefore, preventing the firm from defaulting on its deadlines.
Explain why lead-time reductions in the supply chain are attractive to companies like Gate Gourmet.
Although reducing the amount of time spent on the processing of a particular task and its completion offers benefits for any company, it is indispensable for Gate Gourmet due to the nature of the services that it provides and the need to maintain high quality standards.
The food industry has always been quite competitive, which means that the slightest delays may lead to a big drop in the number of customers. Therefore, the sooner the organization acquires the tools and supplies necessary for the delivery of food to the target audience, the higher it will rank on the list of the organizations working in this area.
About Gate Gourmet. (2015). Web.
Dolgui, A., & Proth, J.-M. (2010). Supply chain engineering: Useful methods and techniques. Berlin: Springer Science & Business Media.
Mangan, J., Lalwani, C., Bulcher, T., & Javadpour, R. (2012). Global logistics and supply chain management (2nd ed.). New York City, New York: John Wiley & Sons.
Our history. (2015). Web.