bài tập môn quản trị san xuất (bản tiếng anh)

TRAINING PROGRAM
GLOBAL ADVANCED
MASTER OF BUSINESS ADMINISTRATIONN

INDIVIDUAL ASSIGNMENTS
PRODUCTION AND OPERATION
MANAGEMENT

Class

: GaMBA C0211

Leaner: Nguyen Do thanh
Class

: GaMBA4.C165

HCM City - 2012


Production & operation managerment

INTRODUCTION
Analysis of the following situations about the competitive advantage of
Dell Company
1/ what is the advantages that Dell gained from the production located outside
of America? What is the potential disadvantage from that?
2/ Why does Dell buy most spare parts from independent suppliers rather than
their own production (only small final stage of Dell is the assembly of
components into the computer)?
3/ what has brought results for cost structure and profitability of Dell when

replacing inventory with information?
4/ Do you think that Dell's model can be imitated by other manufacturers and
other personal computer manufacturers in other industries?
5/ What factors make the other computer companies have difficulty in imitating
models of Dell?
6/ what is origin of the competitive advantage of Dell? How stable of this
advantage is alike?
7/ what are the potential risks in the strategy of global supply chains of Dell?
How to reduce such risks?

I.

An overview of Dell Company:

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Company headquarters of Dell is in Round Rock, Texas, USA. Infatuated
with his PC, since the age of 15, with determination and intellectual superiority,
Michael Dell has come very quickly to the successes in his career and became
an entrepreneur when he was sitting in school. From the huge profits of many
kinds of computers that are brought by Dell brand, to 2007, Michael Dell has
put his name on the top of the list of successful business people and the world’s
richest with a net value at 18 billion individual assets.
Dell is a precursor of the small shops founded by Michael Saul while he was
still a student at the University of Texas at Austin, USA named PC's Limited.
To 1988, the name PC's Limited has been replaced by Dell and officially known
in the market of information technology in the U.S. and after soon, with the

computer products of high quality, Dell has become a commercial strong
performance in the world of the brand world-renowned computer. Currently,
along with products ranging from laptops, servers, printers ... number of
employees working at Dell was 78,000 people, the total annual income of the
company has soared to 55.908 billion and is feared by many rival manufacturers
such as Acer, Compaq, Microsoft, Sony, HP ... After a period of researching,
Michael Dell had to use direct delivery methods.
No need a middleman, customers simply call or order via the Internet, all in
package, product and support equipment was Michael Dell and a number of
staff assigned to deliver at home.
By that method, Michael Dell has created a reputation to customers just
can research new market demands. Not stopping there, as a new product, not the
stable basement and be incurred greater competitive pressures, Michael Dell has
applied methods of lowering production costs to attract customers.
Thus, PC's Limited developments have been pretty solid, and Michael Dell is
also experts who rated the most successful application of direct delivery
methods. The circle product distribution has been set before it became useful

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tools for Michael Dell to capture the market's needs and then put into
production of computers, accessories, proactive nature.
While most other companies focus on computer products is the most
common configuration, Michael Dell focused investment in development of
computer systems and floppy drives, which are highly configurable, and
obviously, Michael Dell has launched an attack on the exact needs of customers
and consumed large quantities.

Created a strong position in the information technology market in the
country, Michael Dell was preparing for the program advances to the market in
the region and beyond.
For Michael Saul Dell, the problem has always been top priority for our
products are the unique quality and psychological hit to consumers from the
increasingly common for computers to laptop elegant and high quality, using
licensed Microsoft software.
In new markets, to reach as quickly as possible, Michael Dell has established
a series of product distribution partners. Staying faithful to the method of direct
delivery to consumers, adding that open customer service network and quality
assurance for products distributed.... Wherever the presence of Dell computer
products have their service center and counseling for clients use. Even if the
client is unable to catch the Dell Computer Corporation's experts will telephone
advice to customers.
By this way, Michael Dell has secured 75% reduction in incidents of the
product and created enormous prestige in regard of our customers. A series of
center customer service was held tightly in place in many countries outside the
region and as the customer care center at Alberta, Ottawa, Ontario, Central
Texas, Salt Lake City, Utah, Nashville, Tennessee, Chesapeake, Roseburg,
Oregon, Twin Falls, Idaho, Oklahoma City, Oklahoma, San Salvador, El

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Salvador, Glace Bay, Nova Scotia, Panama City, Panama, Philippines,
Malaysia, China, and India.
II.

Situation analysis:

1. What are the advantages that Dell gained from the production located
outside of America? What is the potential disadvantage?
The advantages that Dell has been produced from locations outside the
U.S:
Labor costs of manual labor and low cost warehousing and material costs
in other countries is also lower than in the U.S. , so it lead to higher profits.
Also Dell prefer to select the U.S. market close as Brazil, Malaysia, China ...
have higher labor productivity and reduce transportation costs to customers.
However, potential disadvantage is likely to lose market simultaneously
lost the ability to create its own brand and under the direct competition from its
rivals when processing technology as well as all components because they do.
That leads to endangered or about to disappear, replaced a different name today
after nearly a decade and delivered to the outsourcing contractor to Dell
completely dependent on subcontractors that takes away the ability to create
their personal brand.
2. Why does Dell buy most spare parts from independent suppliers rather
than their own production (only small final stage of Dell is the
assembly of components into the computer)?
With a view to cutting costs as well as investment in factories optimize
inventory costs, while Dell's supply chain strategy globally through the Internet
so delivery hand in hand will reduce costs of intermediary reducing the cost and
create competitive advantage
For example, Dell received orders via the Internet in Vietnam, this time
Dell will take steps to update mode components production orders within 1 to 3

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months. Dell is only the final stage of assembly and hand delivered to customers
by air, courier ... in the shortest time.
3. Replacing inventory with information what has brought results for cost
structure and profitability of Dell?
Computer industry is characterized by cost component accounts for 75%
of revenue and loss of 1% of every week due to speed quickly obsolete. In
2004, Dell store inventory only have 3 days compared with 30, 45 even 90 days
of the competition. This is a significant advantage to reduce costs and increase
revenue.
When the hard drive faster, larger capacity is introduced every 3-6
months, the value of the old hard drive will take sharply. Therefore, if Dell
stock took a week and competitors take 4 weeks of inventory, which leads to the
advantage of lower component costs by 3% for Dell, and also means an increase
of 2% profit. Remove inventory from the system also significantly reduced
demand for Dell's working capital and increase profitability of the company.
To be able to compete successfully with low-cost rivals, Dell must have a
supply chain able to deliver computers to customers in just a few days time. The
company has signed cooperation brought out some activities such as component
production and delivery, but still retain the assembly in the U.S., Ireland,
Malaysia, China and Brazil...
4. Do you think that Dell's model can be imitated by other personal
computer manufacturers and manufacturers in other industries?
In my personal opinion, the Dell’s model can only be reference model for
other personal computer manufacturers, it’s difficult to be imitated by the other
suppliers or other industries because it depends on the retail supply system and
the Dell brand is well known and Dell also had to take a very long process to
get to the current destination

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Production & operation managerment

The main customer groups of Dell include: - Individuals use for family
and office-Small businesses under 200 employees and medium-large
businesses, over 200 employees-government organizations, education, healthcare organizations.
Both B2B and B2C customer group are done online transactions at
dell.com through electronic catalogue system and process order automatically.
Dell has also launched e-auction system in www.dellauction.com to attract more
customers

and

strengthen

business

brand

at

portal

website

www.dellauction.com.
Also thanks to the internet, the process of purchasing a personal computer
is completely automatic, so although the volume of goods which is sold

increased very fast, but Dell does not have to hire more employees.
This also significantly reduces the cost of sales along with phone costs
down. But for the initial investment for infrastructure is not easy for other firms.
5. What factors make the other computer companies have difficulty in
imitating models of Dell?
These factors make the other computer companies have difficulty
imitating Dell’s model is:
With a brand has already been built, Dell regularly apply information
technology in activities, especially sales through internet.
Dell always creating new products with more advanced technology, more
gadgets, more appropriate for different groups of customers on over the world.
Dell always wanted to reach further, higher to the next level, the target of 90
billion USD revenue of Dell is not so far away. Supply chain is perfect with the
transition inventory burden to suppliers, keeping the reserve at the lowest level
far beyond Dell competitors in the industry as well as large corporations in the
world.

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In addition, internal information systems were measured at all times, Dell
is forcing its staff to work with the best performance and many success of Dell
in managing the supply chain. Just as momentum, Dell will soon leave the
competitors behind. One thing is clear that firms outside the industry are hard to
go the way of Dell because:
First, most PCs are assembled from standard components, available from
many different sources of supply, so no need to order long-term costs.
Second, consumers want to have their PC on demand, but the demand is

limited: they want the processor faster or slower, more or less memory capacity
is not need the color of PC.
Request restrictions on PC assembly encourage customer preferences
without providing a network of more reserve components. Moreover, due to the
expensive PC quickly become obsolete and lose value over time, the
profitability of the PC maker depends on efficiency rather than scale
investment. According to Dell, if PC makers can reduce the amount of the
reserve components through the efficient operation than its rivals, the company
will earn more profit. This is the core element that investors other computer
manufacturers difficult to imitate Dell's strategy.
6. What is the origin of the competitive advantage of Dell? How stable of
the advantage of this firm?
Start with the direct marketing model for personal computers, and then
start trading online. Then Dell applies Build-to-order model (BTO) with largescale, allowing customers to choose according to demand. To meet the large
demand, Dell is applying the model of online shopping to improve the
efficiency of purchasing raw materials, input devices (SCM), in collaboration
with partners and improve operational efficiency within the business (B2B).

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After then Dell apply the model of e-CRM to maintain good customer
relations. Especially, Dell gained profits by reducing intermediaries and reduce
inventory.
As a result, Dell’s company ranked in the top companies with reliable
products and perfect service.
Method of sale also contributed significantly to its success as well as the
product the company sold, Dell has spent quite a lot of effort into the training of

staff in order to serve their customers by forcing all employees must undergo a
six week training course to answer customer questions, resolve complaints,
orders and help customers choose products according to their requirements
before making a sale.
The complaints are always discussed collectively in weekly staff
meetings to help employees find the best solutions.
For example, if Dell found it all a certain component, such as screen 17"
from Sony, it can control demand by providing a sample screen 19" with a
lower price until Sony distribution more about screen 17". By such steps to
balance supply and demand, Dell can meet customer expectations.
Balancing supply and demand also allows the company to minimize excess
inventory and obsolescence. Inventory of excess and obsolete Dell is in the
range 0.05 to 0.1% of total raw material costs compared to 2-3% of the
competitors has help Dell earned a substantial cost advantage.
7. The potential risks in the strategy of global supply chains of Dell? How
to reduce the risks?
The potential risks in the strategy of global supply chains of Dell:
The supply unites are easy to capture the information by Dell and seek
additional partners for themselves. At the same time the "giants" such as HP,
IBM have had easily the tendency to do better if their orders which are more

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powerful and their capital which pay in advance for its subcontractors will cost
less than both Dell.
Implications long time research and development force Dell will slow
evolutionary roots lead to no more alternative designs and other products. At the

same time by a majority of Dell orders are made directly through the internet so
when the incident took place Internet will also be given to influence the
operations of Dell not to mention the competition easily hire hacker stole
customer information is unavoidable.
When the components depend more than 80% of independent provider
units. Dell will easily get stuck when sources become attractive and lead to
pressures pushing prices up

III.

CONCLUSION

In the production environment of business and the current global
competition, it still retains its value. We have to identify change, forecast

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change, creating the vision for the future, and design and strategic planning for
adaptation and change management, this decides the success or failure for each
business.
With Dell strategic group, we saw the effectiveness of strategies in
response to change and meet the tough demands of the market, and it was one of
the main factors that make success and development as the company today.

REFERENCES
1. Lecture of Dr. Le Hung Phong
2. Production & operation management book International MBA

program – Griggs University

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Production & operation managerment

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