INTRODUCTION

Business world is increasingly tough since the growth of Information Technology and the growth of Internet since several years ago. To ensure survival, a business must be characterized with rapid production, has a short product cycles, constantly innovative and sophisticated naturally, as well as more organized. Pressure will be more focused on the usability of the supply chain in which it must respond quickly, efficiently and effectively in order to respond to market changes and to maintain, and most importantly, to create a competitive advantage.

During the heyday of the technology booming throughout the 1990’s many companies experienced enormous success for a few years, however without creating a solid internal framework many of these companies did not survive. An exception to that business trend is Dell, which was able to address its problems associated with rapid growth, and build itself into a lasting profitable company. After facing a big lost of almost negative $40 million and with help from several seasoned managers to focus on specific aspects of business, Dells has risen with concepts of “virtual integration”, which goes a step further than traditional integration by connecting the rights parts together in the business.

Dell Company was established in November 4, 1984. It is an American multinational information technology corporation based in Round Rock, Texas, United States that develops, sells and supports computers and related product and services. The name of its founder is Micheal Dell, he was the youngest CEO to guide a company to a Fortune 500 ranking.

The main reason why Dell is being selected for this write-up is because Dell has received numerous accolades from all around the world. Among the recognitions earned include: -

Ranked #165 in Fortune’s Global 500 DiversityBusiness.com’s Top 50 Organization for Multicultural Business Opportunities

Award (U.S. - 2012); Awarded Perfect Score in 2012 Corporate Equality Index; Top 50 Most Admired Companies. #10 (India - 2012) CSR Leadership Award Finalist and CSR Innovation Award Finalist (China - 2012); Top 100 U.S. Companies to Work (U.S. - 2011) 2011 Employer of Choice Award (Malaysia - 2011); America’s Most Inspiring Companies. #4 (U.S. - 2011); Network and Affinity Leadership Congress 2010 Above and Beyond Award (2010).

ANALYSIS

As a multinational company, Dell is very efficient in implementing the global strategy and a competitive advantage in the supply chain and sourcing as follows:

Replacing Inventory with Information One of the supply chain management concepts is to replace inventory with information in which could reduce inventory storage through the use of information. In supply chain management, what is important is to have the right amount of inventory to meet the supply and demand without compromising service levels. Storing large amount of inventory in the store just act as a buffer and protect the uncertainties in the supply chain. However, excess inventories are not treated as assets and it is actually regarded as a liability. Implementing strategic information such as internet based ordering system, and update supplier with latest demand trends, Dell can improve the balance between demand and supply.

Just-In-Time Strategy One of Dell's competitive advantages is directly related to their sales strategy that is well known and build-to-order approach. This strategy only at the moment that has been adopted allowed it to operate with minimal inventory. Reduction of excess inventory Dell provided with a significant cost advantage because of the cost components depreciates by 1% per week in the electronics industry.

Direct Selling Direct selling strategy has also enabled Dell to bypass intermediaries such as wholesalers and retailers, to reduce costs even further. In addition, the global powers of the Dell 200 providers have access to automatic and real-time information such as the expected total demand trends and their components. Close relationships with suppliers and the direct sales model has allowed Dell to balance demand and supply dramatically.

Global Manufacturing Plant The main advantage of global manufacturing plant is the lower costs of labor but high productivity of local workforce. For example, labor costs in Malaysia are cheaper than neighboring Singapore but the quality of labor remains comparatively high. When Dell established its manufacturing operations in Malaysia, it received a 100 percent tax exemption for five (5) years, an initiative by the Malaysian Government to attract investments.

Outsourcing Manufacturing Dell outsources the manufacture of personal computer components because of the choice of good components and suppliers rather than vying to produce one. Outsourcing would allow Dell to focus on its own competencies such as managing its efficient supply chain, customer service, research and development of new products, etc. However, Dell only outsources components manufacture but not the final assembly to prevent the unintended creation of competitors.

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CONCLUSION

Future forecast for the personal computer industry are more likely to bleak and falling sales of personal computer due to the advent of new product such as smart phone and tablets that are out shadowing personal computer are expected. The impact on Dell’s business will be and it is important for Dell to sustain its competitive advantages. As what has been done by its competitors, Dell also must invest more effort in learning and innovation. It should also evolve its global strategy such as responding to local needs an adopting other transnational strategies.

The situation in which saw Dell rise and fall in personal computer industry has become a trigger and reminder to itself-that a sustained competitive advantage, motivated by constant changes, is crucial for the future of the company.

REFERENCE

Hill, C.W.L., Cronk, T., Wickramasekera, R. (2011), Global business today: Asia Pacific Edition, Restoring Dell’s competitive advantage. Pp 531-534, McGraw-Hill, Sydney.

DELL. (2013). Home Page. Retrieved November 7, 2013, from http://www.dell.com/learn/us/en/uscorp1/corp-comm/diversity-awards

Shurrab, H. (2013). Gaining competitive advantages through supply chain management: success stories. Retrieved November 7, 2013, from www.slideshare.net/hafezshurrab1/gaining-competitive-advantages-through-supply-chain-management-success-stories

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