Dell Value Chain Analysis

VALUE CHAIN ANALYSIS OF DELL Technologies

The concept of value chain was given by Michael E Porter of Harvard University. Value Chain includes all the activities from product conception to marketing, sales and after sales service. It is a useful model that allows managers to understand how each activity described in the model is adding value to the product or service. Optimization of the value chain helps at controlling costs as well as minimizing wastage and increasing overall efficiency. There are two kinds of activities in the value chain which are categorized as primary and support activities. Below is a detailed analysis and description of the value chain of Dell technologies.

Dell Value Chain Analysis

Primary Activities:

Inbound logistics:

Dell has a global supply chain network which it has managed very well through  chain of warehouses that serve its manufacturing facilities and retail operations. It owns manufacturing facilities located in United States, Malaysia, China, Brazil, India, Poland, and Ireland. the brand sources raw materials from suppliers located around the world. Dell works with external logistics partners to optimize its inbound logistics and used a mis of various channels including sea and air to source and stock raw material. Dell uses the JUSt in Time model for supply chain and inventory management. Sourcing is made easier by partnering with logistics providers like DHL, UPS and others.

Outbound logistics:

Just as in case of inbound logistics, Dell has managed its outbound logistics very well with help from external logistics providers. Third party vendors and logistics providers play an important role in delivering products and solutions to customers. Dell uses its network of distribution centers and retail partners to make deliveries to the end customer from a close location. In Europe it has extended its fulfilment network and changed the way it used to deliver accessories. It uses a multi channel transportation strategy. Using a balanced mix of several channels it has been able to reduce wastage and cut emissions. Whether in terms of inbound or outbound logistics, the focus of Dell remains on minimizing the environmental footprint. Apart from the selection of right route of delivery, use of the right transportation channels also ensures that neither time and nor other sources are wasted.

Operations:

Dell is a global brand with a global supply and distribution network. The brand has continued to optimize its network in order to gain highest efficiency and productivity. Dell has its global corporate headquarters in Round Rock, Texas, United States. The brand has operations and conducts its business in several countries located in the Americas, Europe, Middle East, Asia and other geographic regions. Apart from that to increase its global presence the brand has continued t focus upon the emerging markets outside US, Canada, Japan and Western Europe. Its manufacturing facilities are located in United States, Malaysia, China, Brazil, India, Poland, and Ireland. Dell has also implemented Lean Six Sigma methodology for continuous quality improvement.

Sales and Marketing:

Dell has a global sales and distribution network apart from its direct to customer sales channel. Apart from its own retail network, it has focused upon increasing the number of its retail partners in the recent years. Dell also uses a multichannel strategy for marketing and promotions of its brand and products. Apart from tis own website, the brand uses social media and more traditional and digital channels for marketing and promotions. However, considering the size of the brand, its advertising expense is still very small. Last year, the brand spent a little above a billion (1045 million dollars) on paid advertising.

Services:

After sales customer service is now more important than ever in terms of creating highest customer satisfaction. Good after sales service leads to good word of mouth, better reputation as well as higher customer satisfaction. Dell has managed an extensive worldwide network of after sales service and maintenance providers. Its customers can easily located a store or retailer from Dell’s website for repair. The carry In service by Dell provides customers an easy choice to use their warranty and get their laptops and PCs repaired for any form of defects or upgrades.

Support Activities:

Technology :

Dell is a technology brand and focuses on technological innovation to bring better products and services as well as to expand its business. Apart from its cloud computing business, the brand depends heavily on its IT infrastructure for successfully operating its business. It also uses innovative technological solutions for efficient business, supply chain and sales network management.

Infrastructure :

Dell’s global operations are supported by strong infrastructure. Its business is supported by a large and interlinked IT and manufacturing infrastructure. Michael Dell leads the brand and is its main decision maker. Dell has regional offices all over the world.Its total assets were worth 122.3 Billion dollars in 2018 rising from 118.2 Billion dollars the previous year.

HRM :

Dell has also maintained heavy focus on HR management. Strategic HR management has become critical in this era to the operation and management of a successful business. Dell employs around 145000 full time employees ( as of 2018) of which 22000 are VMware’s employees. 39% of its all employees are located in United States whereas around 61% are located in the other countries.

Procurement:

Dell has coordinated its global procurement process very well. Its global procurement team works in close coordination to manage an efficient supply chain and source raw materials efficiently from suppliers located in all corners of the world. Moreover, this team works in coordination with the Dell Supply Chain Sustainability team to ensure that suppliers perform as per the environmental standards.

Sources:

https://www.dell.com/learn/us/en/uscorp1/corp-comm/earth-transportation-logistics

https://www.dell.com/learn/us/en/vn/corp-comm/supply-management

https://www.managementstudyguide.com/logistics-operations-in-supply-chain-network.htm