Why Dell Wins

Fast Company has an interview with Dell CEO Kevin Rollins:

Whenever you compress time you end up with lower cost. So we do everything we can to cut inventory and reduce the cycle time from order to delivery. That ends up being a cost and performance advantage for the company.

One of the untold secrets of the supply chain is the direct connection with the customer, which means taking an order from the customer and not through an intermediary. Most people think of the manufacturing process as the supply chain. When we think of the supply chain, we think from the customer all the way back to the component supplier. Because we don’t have any intermediaries, we can see directly into the demand side — we get good information directly from the customer, which enables us to forecast well. That lets us optimize the manufacturing-procurement chain and move very fast.

Our competitors all try to copy our supply-chain model, but they don’t have the front-end! They sell through distributors and resellers and aggregators, so there is no way for them to know what the demand is. They’re always out of position. They have bad forecasts on the front-end and they don’t know what their suppliers have in inventory.

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Rajesh Jain

An Entrepreneur based in Mumbai, India.