Operations Management

Just-in-Time & Lean Manufacturing in

Dell Inc
Shreyanshi Agarwal
Marketing
PRN: 21020141209
Roll No: 44309
Executive Summary
Dell is one of the most profitable and successful computer companies in history. It has a reputation
for providing creative customer service and product customization. As the business expands, it has
difficulty maintaining client connections and inventory management while meeting the expectations
and requirements of its customers. This paper will look at how Dell uses Just-in-Time Inventory
Control Model along with Lean Manufacturing to resolve its issues in Operations.

Table of Contents
Sr. No. Details
1. Introduction
2. Observation
3. Conclusion
4. Recommendations
5. References

Introduction
Dell's original concentration was mostly on corporate business. This is one of the main reasons why Dell has a
high number of business users. Not only for laptops and desktops but also its other corporate hardware and
software product offerings.

While it was not concentrating its efforts

on the low margin customer market sector,
it appeared to be establishing a reputation
in the customer market. For creating
powerful computers that were so good that
they met the demands of even second and
third-hand users.

The beginning of the Internet era– Just

before the broad commercial usage of the
internet, Dell was one of the first few
companies to enter the e-commerce
market. Beginning in 1996/97, Dell was
able to provide its product catalogue on its
website.

The power of customisation– Dell began

providing computer knowledgeable consumers with the ability to purchase PCs and laptops based on their
customization and have them delivered straight to them.

Buy Direct– As an early adopter, Dell provided end-users with the option of purchasing directly from the firm.
A technique in which the firm excels and which might have a beneficial influence on its rates, benefiting both the
company and the end consumer. Its items looked to be cheap when compared to other products on the market,
but the fact was that they were priced in a way that allowed them to pass on the benefits of "Buy Direct."
Observation
Because of the made-to-order PCs approach, Dell was a pioneer in lean manufacturing. This was made possible
through JIT and strong supplier networks. As a result, decreased inventory costs resulted in a competitive
advantage. However, due to the quickly changing business models of high-tech firms, the market is more dynamic
and concentrated than ever before.

Dell's new aim was to streamline production procedures. Specifically, lean manufacturing procedures include the
just-in-time supply of components from hundreds of vendors. To do this, Dell needed to rethink and reengineer
all of their systems, as well as rationalise their technological infrastructure based on the new model. The new
model implementation was based on Microsoft Dynamics AX. Dell drove towards a single, global business with
enhanced flexibility that would enable the company to adapt to the changing market conditions.

Dell may have been the first company in the computer hardware business to use the Just in Time strategy. It
centred on a push-pull approach, which is a mix of "push" and "pull" strategies. When a consumer enters the site
to pick the product and the numerous adjustments accessible to it, a "Push" of products/options is created. When
an order is placed, a "Pull" is instantly established, establishing demand and kicking off the manufacturing process
for the specified product.

The big advantage of Buy Direct and

JIT implementation was that Dell
could put in place some high-level
programmes and algorithms that
helped it predict to a high degree of
accuracy what volume of orders are
expected, for which product, from
where, and thus alerted its
component suppliers to get ready
with the anticipated parts while also
internally staffing to fulfil the
predicted orders. Essentially, the
massive amounts of data that Dell
has accumulated over the years
enabled it to better understand and
anticipate the purchasing behaviours
of its consumers. According to
industry analysts, Dell's forecast accuracy was north of 80%, even though it was not publicly published by Dell.

The Just in Time Model also allowed Dell to provide its clients with the most up-to-date technology on the market.
Typically, items at a normal retail store are supplied with a pre-defined configuration. However, due to Dell's
Just in Time ordering method, it was able to provide its clients with the most up-to-date technology available by
guaranteeing that the most recent items were provided to it by its component supplier. They were able to introduce
new product offers nearly at the same rate as technological development.

Dell chose World Wide Technology (WWT) because of its ability to use important parts of past supply chain
knowledge, its unique end-to-end systems offering, and the flexibility exhibited by the proposed strategy. WWT
has been in charge of the procurement, inventory management, and delivery of direct material categorised as
"Alpha" items that are incorporated into Dell's completed goods since 2003. The WWT solution's implementation
substantially altered how materials are provided to Dell. Multiple supplier deliveries have been replaced by a
single truck supply comprising all replenishment items arriving every 45 minutes. WWT Site Coordinators on
the factory floor produce demand signals to the collocated distribution centre using radio frequency (RF) devices,
triggering the pick, pack, and delivery to the plant just before consumption.

PEOPLE
In the previous setup, each supplier was obliged to supply an on-site resource to maintain factory inventory levels.
Following the installation of the WWT solution, WWT became the sole provider of resources on the
manufacturing floor, lowering the overall number of resources necessary to ensure supply continuity. WWT also
assembled a specialised team of material planners, vendor managers, and process consultants to assure the
solution's end-to-end management and efficiency.

PROCESS
WWT introduced to the dell team several process and technological advancements. First, WWT created a set of
forecasting, inventory, and demand planning tools that were tuned to changes in dell's production process.
Second, wwt established distribution hubs in close proximity to each dell facility, decreasing lead times to 45
minutes or less. Finally, on the manufacturing floor, an rf-based barcode scanning system is utilised for product
acceptance, replenishment requests, and invoice reconciliation. While lowering costs, these innovations also
improved visibility and dependability in terms of supply continuity.

PARTNERS
Working with each of the legacy vendors was critical to the WWT solution. The team faced a significant problem
in managing 40 vendors with 40 distinct procedures and systems. The WWT team was able to establish an
integrated procedure for each supplier to collect orders, monitor projections, and decrease labour costs by using
technology. Furthermore, by lowering entry barriers for suppliers seeking to collaborate with Dell, WWT has
been able to bring a new degree of free-market competition, lowering SKU costs for individual components
controlled by WWT.

RESULTS
In less than three months, WWT successfully created the necessary systems, operated three first sites, and
assembled a support staff. Furthermore, the project went online right before the holiday season, which is
traditionally Dell's most important time of year. Consolidating supply chain management into a single
organisation has resulted in significant waste reduction. Dell has seen savings across several business sectors, as
well as total SKU price reductions, and has experienced a scalable process that is required to support Dell's overall
expansion. WWT has added three more distribution centres, more than 50 suppliers, a staff of more than 100
employees to assist Dell, and has been growing into Dell's overseas production sites since the program's inception
in 2003.

Conclusion
The incorporation of the LP and JIT concepts into organisational performance enables DELL to meet the financial
aim of improving its competitive position in the market by lowering operational expenses. Implementing these
concepts in the coordination of material supply, equipment use, and labour management can greatly aid the
process of new product introduction by reducing time and other resource waste, optimising material flows and
accelerating product production. Just in time manufacturing may have a beneficial impact on a company like
Dell, and by adopting JIT methods, they have acquired a competitive advantage over similar competitors in the
computer market. The direct selling strategy complements their JIT processes, which might position them as the
global leader in computer production in the future.
Recommendations
We can learn from Dell that organisations must have a supporting framework and strategy for cooperation and
communication between product development, sales, and services. To acquire market share in the services sector,
Dell will most certainly have to redesign its procedures to enable and promote this flexible model in the future.
However, the system may likely increase the competitiveness of large corporations such as Dell, as seen by their
financial standing in the market. The most essential thing Dell must remember is that for JIT to operate within
their organisation in the first place, they must have excellent working relationships with their suppliers. For the
reasons stated in the paper above, I conclude that Dell has successfully implemented JIT inventory management
within their business processes and that they are utilising continuous improvement within their company to
maintain their position as one of the leading manufacturers of computers and software.

References
• https://www.ukessays.com/essays/business/examining-quality-control-and-operation-management-in-
dell-business-essay.php
• https://thestrategystory.com/2020/11/24/dell-just-in-time/
• https://www.ukessays.com/essays/education/implementation-of-jit-at-dell.php
• http://cmuscm.blogspot.com/2014/02/dell-optimizes-lean-manufacturing.html
• https://studycorgi.com/dell-companys-manufacturing-and-just-in-time-model/
• http://cmuscm.blogspot.com/2014/02/dell-optimizes-lean-manufacturing.html
• https://group2lean.wordpress.com/dell-computers/

*****************************************************************************************************