Dell's inventory management strategy and supply chain

yundisu

May 30

A world's leading computer hardware manufacturers

is a multinational technology company headquartered in Round Rock, Texas, United States. Founded by Michael Dell in 1984, the company has grown to become one of the world's leading providers of computers, servers, software, and other technology solutions.

The most remarkable feature of Dell's supply chain management is its direct sales model, meaning that it accepts orders directly from the customers, without any resellers involved.

Dell has used its direct sales and build-to-order model to develop an exceptional supply chain, based upon the following:

They has a web page for suppliers. This can be interpreted as Dell in their never ending pursuit of innovation, they've developed a system that allows their suppliers to avoid unnecessary downtime by having to wait for any reply from their purchasing department. And that empowers the suppliers to predict, project and deliver the exactly raw materials that Dell needs
Direct sales vía internet, which increases revenues by offering an unlimited variety of products. This allows Dell to eliminate distributor and retailer margins, thus the margin increases.
Also, Dell collects payment after the product is sold but pays its suppliers according to the traditional billing schedules. With low levels of inventory, Dell gets advantages in cash flow.