Living In Dell Time Essay

1703 words - 7 pages

QUESTIONS
1. Identify and describe all the different types or forms of innovation exemplified in this article by explaining with data and facts from this case.

Product Innovation (the development of an improved product)

Dell is the only computer company which offers its customers the built-to-order model. The customers can choose which components they want to have in their computer and can adapt it to their needs.

Process Innovation (the development of a new manufacturing process)
Dell has brought a maniacal focus to shaving minutes off the time to assemble and ship a computer. By studying videotapes of "the build," as they call it, factory managers have slashed in half the ...view middle of the document...

Production Innovation (just-in-time manufacturing system)

Dell used to carry 20 to 25 days of inventory in a sprawling network of warehouses. Today, it has no warehouses. And though it assembles nearly 80,000 computers every 24 hours, it carries no more than two hours of inventory in its factories and a maximum of just 72 hours across its entire operation. It pulls the parts directly from its suppliers and builds and ships the product within four days and their suppliers are tightly integrated into the rhythm of the factory. Dell holds inventory only for the six to eight hours it travels across the assembly line and for the 18 hours it takes for the completed CPU to be trucked to a merge center in Reno, Nevada, where the unit is bundled with a monitor and shipped to the customer. The total inventory time is just two or three days.

2. What is competitive advantage? What is Dell’s competitive advantages? Identify and describe all the competitive advantaged possessed by Dell.

Definition:
An advantage that a firm has over its competitors, allowing it to generate greater sales or margins and retain more customers than its competition. There can be many types of competitive advantages including the firm's cost structure, product offerings, distribution network and customer support.

Competitive Advantages of Dell:

Dell’s foremost competitive weapon is their unrelenting sense of urgency and speed. They have transformed the back end of their operation, their assembly lines and supply chain, into one of the fastest, most hyper-efficient organizations on the planet. As they have abolished their warehouse, they have to have these skills. They managed it, that they have no more than two hours of inventory in their factories and a maximum of just 72 hours across their entire operation, which allows them to offer their products to a competitive price, because of the missing inventory costs. So although they have the built-to-order principle (a service offered by a manufacturer where a product is manufactured and configured to an individual's specific requirement), which is also a competitive advantage, they can offer their customers a PC, adapted to their requirements, to an affordable price. This increases the customer’s satisfaction because they don’t need to make any more compromises. As Dell saves the money from the missing inventory, they have more money to invest in new technology they need to improve their production or to make the production faster. Additionally, the customers have to make the payment with the order so that Dell has the money before they start to produce the products. As Dell don’t produces for stock, they also don’t have to be scared, that they can’t sell their products which they already produced because they missed an innovation or a new technology. They are swift to react and it’s easier for them to take up new technologies in their assortment than for other producer. Finally, Dell keeps a massive database...

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