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HOW DELL DOES IT

AUTHOR – STEVEN HOLZNER
CHAPTER SUMMARY
CHAPTER 07

Summary of Book How Dell does It and chapter no. 7 value Information Author: Steven
Holznes. This chapter is all about Dell's use of information & metrics something that it excels
at and something that raises it above its competitors.

Dell’s is circulated information in market use both the Internet and Dell's own internal
intranet. This chapter covers Dell's use of the Internet and intranet; without that use, Dell
would be nowhere when it came to efficient information handling. Internet and intranet use is
one of the themes Michael Dell likes.

Dell says, "We wanted the internet to become a key part of our entire business system. We
wanted to make the Internet the first point of contact for every customer and prospect, and
we planned for 50 % of all customer transactions to be online within a few years."

Michael Dell said, "Dell is not the kind of company in which messages languish. We have to
talk in real-time through messages, over e-mail, and on the intranet because we're in a real-
time business. Things happen in the morning that you have to react to by the afternoon. We
have to be competitive twenty-four hours a day, 365 days a year, or else we lose business.
A sense of urgency about communicating and solving problems is imperative." It eliminates
the physical forms of information that take more time and cost, more money to deliver.

Dell has started using Internet or intranet address in the e-mail, so that people can click the
hyperlink to access the information & get the information in real time. 

“Dell has grown fast enough to make it clear that you can’t expect to do everything yourself.
In the end, you have to delegate responsibility.”

To maintain its commitment to constant change, Dell needs a constant flow of accurate
information. Although intuition has a role, it never takes the place of solid data. Dell
measures everything. For example, it gathers information from customers in open forums,
over the Internet. It asks consumers direct questions. Then, it shares the information on a
company Intranet.
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Segmentation helps 
 Michael dell was divided units in small & small segment. So that, he can check which units
are doing well ? & Which are doing poorly? Dell says, “One of the great things about
segmentation is that in has allowed us to see growth rates, profitability, service level
performance, and market share in each unique segment, and adjust our
activities accordingly.

Information flow & customers

The dell had created it’s image in market for customer support, face to face contact with
customer relationship management & also, customer can use www.dell.com site for
configure system & get price quotes of course. Customer can order system directly & track
their order as well as manufacturing status. 

Michael Dell has said,” We have set up a number of forums to ensure the free flow of
information with our customers on a constant basis. We arrange technical briefings at
briefing centres designed specifically for this purpose at each of our regional headquarters
around world (Limerick, Ireland, Penang, Malaysia, Xiamen, China, Alvorada, Braxil, and
Round Rock, Texas).

Information flow and suppliers

Dell created web-based links for each supplier just like they did for customer. The idea is
to connect with suppliers in much the same way you connect with your customers. They use
our supplier web-based link connections to share inventory data, quality data, and
technology plans to give their partners immediate on field visibility. 

By using the web-based link to maintain a continuous flow of materials from suppliers into

dell factories. So that people spend less time placing orders or expediting parts and more
time adding value.

Dell had started selling computers around 1,20,000 to 1,40,000 on a daily basis & order
comes in variety of ways whether phone, web, fax etc. & the same time requirements
through the system to the suppliers. which deliver components to dell factory every 90
minutes based on the order that come into system. In this way, web provides a mechanism
for real time inventory control. Using this technology dell is doing business & maintain almost
zero inventory. 

The ROIC Metric

“To sum up the outlook for Dell’s future - at this point, Dell gives every indication of staying
true to its consistent business model, even when it confuses Dell watchers.”
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The most important measurement Dell uses is "Return on Invested Capital" (ROIC). Dell
evaluates each of its products and business units according to its ROIC, and the company
encourages everyone in the organization to seek ways to improve efficiency and increase
ROIC. If you "want to understand Dell’s business model? Think ROIC. It’s the guiding light."
In fact, since ROIC is a standard, everyone shares, Dells uses it to guide strategic
discussions.