Hail Dell! (E-commerce success and causes)

Dell is one of the world’s top providers of computer products and services such as servers, storage, workstations, notebook and notebooks computers, to businesses and consumers. The company has revenues of $38.2 billion worldwide and employs over 41,000 staff worldwide.
Due to its efficient supply chain management, Dell is capable of shiping a PC within 24 hours of receiving an order. This introduction of the internet and e-commerce has helped Dell improve this efficiency and profitability.


Dell manufactures the products and then sells them directly to the customer, Dell creates disintermediation – the outside retailer is cut out of the process. This reduces time and costs in the process and also ensures Dell is better positioned to understand its customers’ needs directly
Crucially, Dell’s supply chain costs are reduced on the storage side too by its efficient relationship between orders and production. Each individual PC that is ordered is only manufactured after the order is received and only using the freshest raw materials, which are delivered to the factory several times a day. This is known as just-in-time production or real-time production. There is no warehouse for either raw components or finished goods. Each computer has been paid for and has been built for a specific customer before it is shipped.


When internet technology arrived, Dell was quick to set up the e-commerce processes that would enable it to also sell directly online to customers. Selling online allows the whole process to be automated and more efficient.


Real time production ensures no costs are incurred from rising inventory stocks. Output is always driven by actual customer demand. Each individual product is created with the latest technology and each product is custom-made to exactly what the customer wants.


Dell is using automatic instructions that come up on screen. These allow consumer to customise the computer they wants with the features they needs. Dell also provides a variety of options on how to pay, either directly online or, via a customer service operator. There is even an automated leasing option available through a financing arrangement that Dell has here with Permanent TSB.


Consumer order is then passed automatically through to the production department at Dell's factory where it will be manufactured to their specification, tested and shipped out to them. Once manufactured, delivery typically takes few days. All of the systems relating to the sale are done through e-commerce: order placement, order tracking, payment processing, inspection, testing and delivery.


Similarly, internally at Dell, the whole purchase and procurement of materials is automated between Dell and its suppliers. At www.valuechain.dell.com , Dell shares information with its suppliers on a range of topics, including product quality and inventory.


The crucial benefit is the total automation of the whole process, which not only makes it faster and more efficient, but also much more cost effective, especially given the volume of business involved. Dell’s global website receives more than 1 billion page requests per quarter at 80 country sites in 28 languages and 26 currencies.


Dell’s approach to e-commerce simulates the benefits of face-to-face contact between the buyer and the seller. This ensures that staff can be focused on delivering the quality product and providing excellent customer service and support.