Dell and Supply Chain Management


The problem with manufacturing companies whose sole focus is to be expert in supply chain management is that they tend lag as innovators.  They rely on other people’s parts (OPP).  Some end up as middle of the pack companies growing through acquisition. Dell is in this position right now.   One could argue, but for me, Dell made its mark by being a low-cost, high quality computer provider.  Sure, you could order models with tailored features, but when push came to shove, consumers believed Dell drove price points for laptops below the $1,000 mark and was a great value.

For Dell to keep its quality up and its prices down, it needs to do more than find the best circuit manufacturer in China or motherboard maker in Taiwan. It needs some R&D breakthroughs of its own.  And patent it needs to patent them.  Change the form of PCs. Change the interface. Act like a design and component innovator.

Over the past 8 years, to keep revenue up, Dell went into corporate services, then TVs and MP3 players, now they are on a buying jag, looking to purchase other companies.  Back in the day, before supply chain was the pop manufacturing science of the day, American companies invented — and created differentiation through research and development. Peace.