Manufacturing activities at DELL are organized according to the Just-in-Time (JIT) model, which implies that all materials and production components are purchased and supplied just before the start of an assembly process (Songini, 2000). The JIT model is an integral part of the lean production (LP) system, which helps to reduce costs and release the financial resources used in traditional production systems for the management of excess inventories (Lyons, Vidamour, Jain, & Sutherland, 2013).
According to the JIT principles, the production cycle time in the company is coordinated with the suppliers and is planned considering customer demands. By implementing JIT model, DELL succeeded in the reduction of the production cycle, which nowadays takes only four hours (Songini, 2000). The initial stage of the cycle is the reception of the orders from the customers and retailers, after which the company informs the suppliers about what materials and components are required, and then they are delivered within less than two hours. The compliance with the JIT framework allows the company to achieve great cost efficiency through the decrease of inventory costs and to increase customer satisfaction by fulfilling their demands within a few days (Songini, 2000).
The estimated takt time for the new product manufacturing is five days. However, the short production cycle is associated with some potential barriers to new product introduction. Inefficient delivery process management, suppliers’ irresponsibility, communication problems, and inability to manage inventories can interfere with the new product introduction and result in the decrease of logistics service quality, manufacturing failure, loss of positive business reputation, etc. (Danese, Romano, & Bortolotti, 2012). Thus, to arrange the manufacturing process in an efficient way, DELL coordinates its logistics operations regarding physical space and time. By following JIT principles, the company will manage to achieve smooth material flow and product delivery.
Within the estimated takt time, DELL will be able to produce 50,000 of new professional 13″ mobile workstations. For the efficient production of the batch, DELL will need to use the skills of the assembly and component specialists, a few production lines and machines, and the materials required to assemble the product: plastic bins, drivers, memory, processors, etc. Along with this, the labor and material resources will be needed after the item-building process for placing data and programs into the memory device and testing and customizing the finished product. To meet these production needs, DELL will use its current supply resources and the Internet-based supply chain management system. The organizational manufacturing conveyors will allow completing the assembly process within five minutes, and the automatic movement of the items on the conveyor belts will facilitate their delivery to the supervision and testing units (Kanellos, 2004). The present DELL’s machine equipment helps the company to organize an integrated work process that fosters the productivity increase, reduction of changeover time, and supports the efficient use of resources. Thus, for the manufacturing of the new product, no significant additional investments will be required as the company may use everything it already has.
The integration of the LP and the JIT principles into the organizational performance allows DELL to fulfill the financial goal of strengthening its competitive position in the market through the reduction of operating costs (Littlefield, 2012). The implementation of these principles in the coordination of supply of materials, use of equipment, and workforce management will significantly support the process of the new product introduction by minimizing time and other resource waste, optimizing material flows, and advancing the product output.
References
Danese, P., Romano, P., & Bortolotti, T. (2012). JIT production, JIT supply and performance: Investigating the moderating effects. Industrial Management & Data Systems, 112(3), 441-465.
Kanellos, M. (2004). Inside Dell’s manufacturing mecca. CNET.
Littlefield, M. (2012). Manufacturing operations management: Lessons from Dell. LNS Research.
Lyons, A., Vidamour, K., Jain, R., & Sutherland, M. (2013). Developing an understanding of lean thinking in process industries. Production Planning & Control, 24(6), 475-494.
Songini, M. (2000). Just-in-Time manufacturing. Computerworld.