Dell.com's Managing the Electronic Supply Chain Effectively

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Case Details:

Case Code : ITSY012
Case Length : 09 Pages
Period : 1996-2001
Pub Date : 2002
Teaching Note : Available
Organization : Dell
Industry : Computers and Information Technology
Countries : USA

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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"We're essentially moving every process in our business online, whether it's things we do with our suppliers, our internal operations or our customers. Everything is moving online, and www.dell.com is at the core of that."

- Michael Dell, CEO, DELL Computer Corporation.

Background Note

DELL Computer Corporation's (DELL) founder, Michael Dell (Dell) is often credited with bringing about a revolution in the personal computer industry.

After a late entry into the PC business in 1984, Dell put in place a new business paradigm.

In DELL's direct model (See Exhibit I), there were no retailers or resellers.

By eliminating intermediaries and managing its inventory and distribution process efficiently, DELL offered its customers more powerful and customized computers at prices much lower than its competitors.

The company could incorporate the latest technology in its product lines much before its competitors did, as it kept only a maximum of six days of inventory while most of its competitors stocked inventory for about 40 days.

DELL had started its Internet initiative in the late 1980s to provide customer support.

Whenever DELL received a call from its customers for support, DELL customer-care executives advised them to obtain a new disk driver or some other software update available at DELL.

The customer had the choice of receiving the software on a diskette, which was expensive, or to download the software.

Initially, these software downloads were made available from a DELL Bulletin Board site on CompuServe¹.

Excerpts >>

1] CompuServe, a wholly owned subsidiary of America Online, provides Internet services. The company started its operations by offering electronic mail services and technical support to personal computer users, and expanded its services by providing wide-area networking capabilities to corporate clients, programming, portal content and an Internet service provider.