This document provides an analysis of Dell's ERP system, focusing on supply chain management and production. It discusses key elements of Dell's supply chain, including inventory management, supply chain planning, and integration with suppliers. It describes how Dell builds computers only after receiving customer orders. The document also examines Dell's production process and how it uses a build-to-order model. Porter's five forces model is referenced in analyzing Dell's competitive advantages from its supply chain and inventory strategies.

1. KINGSTON UNIVERSITY
Faculty of Computing, Information Systems and Mathematics
CI2114-A – Electronic Business Processes
Assignment 1
INDIVIDUAL REPORT
DELL
Sandeep Aulakh (K0704995)
Monday 1st
December 2008

2. Table of Contents
PAGES
1. INTRODUCTION...................................................................................................
1.1. Overview..............................................................................................................
1.2. Dell.......................................................................................................................
2. ERP SYSTEM..........................................................................................................
2.1. What Is An ERP-Type System.............................................................................
2.1.1. What Each Element In An ERP-Type System Does.......................................
2.1.1.2. Supply Chain Management............................................................................
2.1.1.3. Supply Chain Parts.........................................................................................
2.1.1.4. Dell’s Supply Chain Management.................................................................
2.1.1.5. Dell’s Supply Chain Management Integration..............................................
2.1.1.6. Dell Inventory...............................................................................................
2.1.1.7. How Inventory Can Help An Organisation.....................................................
2.1.1.8. Supply Chain Planning..................................................................................
2.1.1.9. Accenture......................................................................................................
3. PRODUCTION.......................................................................................................
3.1. What Is Production In An ERP-Type System...................................................
3.2. Dell’s Production Process..................................................................................
3.3. Mass Customization...........................................................................................
3.4. The Bargaining Power Of Suppliers..................................................................
3.5. Business To Consumer......................................................................................
3.6. ERP Manufacturing Process Software..............................................................
3.7. How Supply Chain Management And Production Interconnect......................
4. Conclusion..............................................................................................................
5. BIBLIOGRAPHY.................................................................................................

3. Q1. ‘Describe TWO of the following elements within an integrated ERP-type system for an
organisation. Explain what each element does and how and why they are interconnected?’
INTRODUCTION
Overview
In the following report I will systematically be analysing the different aspects of the question
set. The main focus of the report will be analysing production and supply chain
management, which are two of the elements within an integrated ERP-type system. The
company that I have chosen to analyse the ERP-type system is Dell. Porter’s five forces
will be used to analyse the organisation. In addition to this references will be made to each
stage in both the supply chain management and the production management.
Dell
Dell is the leading computer corporation within the computer industry which was found in
1985. Dell sells its computers directly to consumers, thus there is no requirement for sellers
or retailers. Dell is viewed as one of the first companies in the electronic ecommerce
industries which allows its customers to configure and build their own PC both online and via
the telephone.
ERP SYSTEM
What is an ERP-Type System
ERP is an acronym for Enterprise Resource Planning. An ERP-type system is an enterprise-
wide information system which has specifically been designed to co-ordinate and manages
all the resources, information and actions which take place within a business organisation.
An ERP system also helps with the stages which are required to complete business
processes such as order fulfilment or order billing. From research conducted it has been
found that an ideal ERP-type system is when “single database is utilized and contains all
data for various software modules”. The software models can be categorised in the following
categories:
• Manufacturing
• Financials
• Human Resources
• Supply Chain Management
• Projects
• Customer Relationship Management
• Data Warehouse
These categories are found within an ERP-type system. In addition to the Dell’s database
other order process can be linked to development software’s such as Oracle which allows
business to software real-time information for their businesses and populate information on

4. their customers and contracts. Using Oracle can also help Dell to handle workloads in a
more cost-effectively manor.
What Each Element in The ERP-Type System Does
Supply Chain Management
Supply chain management is the management of a business or an interconnected business.
The supply chain management is involved in the “ultimate provision of product and service
packages required by end customers”. The aim of supply chain management is to decrease
inventory levels, optimize production, increase throughput, decrease the manufacturing time,
optimize logistics and distribution, streamline order fulfilment and reduce the overall costs
which are associated with these activities.
Supply Chain Parts
From research previously conducted it was found that the supply chain management can be
broken into three major components which consist of upstream, internal and downstream.
The upstream component of the supply chain includes activities of a company with their
suppliers as well as their connection with their suppliers.
The internal supply chain contains five stages which are suppliers, purchasing, production,
distribution and the customer or end user.
And finally the downstream supply chain contains all the activities which are involved in
delivering the products to the customer.
Dell’s Supply Chain Management
The supply chain management consists of many components of which of some are
inventory, supply chain planning, supplier scheduling; claim processing, order entry and
purchasing.
Focusing on the inventory part of the supply chain management the research conducted
portrayed the view of how Dell’s supply chain management system controls key business
factors which support “worldwide manufacturing operations, including the efficient Dell
inventory management model, and fast direct delivery of computers, accessories, parts, and
supplies”. This statement is very effective because it portrays a good observation of Dell’s
ERP-type system. The reason being that the supply chain management controls many of the
deeds which take place in the business. Furthermore it can be said that having an ERP-type
system like this means an improvement in the integration.
It can be seen that the supply chain holds a vital role in the world wide operations
undertaken by Dell as well as within any other organisation. As Dell’s operations focus both
on factory and internal operations the supply chain management system must be able to
provide important business factors in real-time mode. Relating back to the question being
answered this also has a colossal impact on Dell’s ERP system as it allows Dell not just to

5. deliver orders more quickly but also allows them to manufacture customer orders more
resourcefully.
Having a good supply chain management system can bring many assets to the organisation.
Not only will it increase profits but focusing on the information system side of the
management system, research showed how areas such as “improve speed, agility, real-time
control and customer satisfaction” can also be improved.
In addition to this an organisation having a well structured and strategic supply chain
management scheme within their ERP-type system means they can take advantages of
opportunities which are linked to integration and communications.
Dell Supply Chain Management Integration
The integration of supply chain management systems has become a very big debate and
issue in today’s world. There are many reasons for this however one main reason was found
from a journal by ‘Power, Damien Supply Chain Management Integration and
Implementation’ in which it was stated that “As organizations seek to develop partnerships
and more effective information links with trading partners, internal processes become
interlinked and span the traditional boundaries of firms”. This analyses the concept of more
firms and businesses using supply chain management as a method to interconnect with
each other.
Research showed that Gateway and Dell make computers and Dell to an extent can be seen
as the leading organisation in the computer industry, as well as making other technologies.
Nevertheless there are many other computer companies which also provide customers with
computers and even meet most of the configurations that these two organisations provide.
However Dell and Gateway do differentiate from these other companies and the way they
manage to do this is “that they can build and deliver a customer-configured PC within five
business days”. In addition to this they have many other different ways to achieve
advantages. Another method found was that these two organisations “can do this with
almost no inventory, absolutely no working capital, and far fewer capital assets than most of
their rivals”. This clearly supports my views on how an organisation can have a well-built
supply chain management system in their ERP system to differentiate themselves.
During the research phase a very useful piece of information was discovered which focused
on the views of Porter’s model theory. It showed that encompassing a more logical supply
chain management strategy rather than simply encompassing a strategy for certain
operations within a business could prove meaningful to certain businesses. Through my
perspective this links to the ERP system and Dell’s supply chain management because,
Dell’s supply chain strategy is one area which brings the company many advantages. This
allows them to build configured PC’s for their customers from the very beginning and insert
features into the PC’s which the end users require and not what the company believe should
be in the computer.
It is essential within an ERP system to have a supply chain management in a business
corporation and one which is made on the bases of a tough supply chain. To support my
statement this can be seen from an online article which mentioned that “Dell’s supply chain
capabilities are a key competitive differentiator for the company”. From this it can be
analysed that by Dell having a strong supply chain management system enables them to
deliver built-to order customers more quickly and resourcefully.

6. Dell Inventory
One key part of the supply chain management is inventory. Inventory management specifies
the size and a detailed list of the items in stock. This signifies that inventory plays a vital part
in the supply chain management and the ERP-type system.
Further research undertaken showed some interesting information which was based on
Dell’s inventory management and how it helped the company. This research would also help
to relate back to how the supply chain management has made Dell’s supply chain success in
the ERP system.
A case study was found which was based on the supply chain’s inventory management.
Within the case study it was stated how low inventory has helped Dell. Firstly from this
statement it can be conducted that having a good supply chain management within the ERP
system brings the organisation more advantages and allows them to have a strong inventory
management within the supply chain management. In addition to this through my
perspective it can also be analysed that this shows the organisation having a strong ERP-
type system. Having analysed this statement in my opinion it can be related back to Michael
Porter’s ‘The Bargaining Power of Suppliers’,
Porter’s competitive forces model identifies five major forces which determine “an industry’s
structural attractiveness. The reason being that I believe this model can be linked to the
statement as the model focuses on raw materials, components, services and other contents
supplied by the supplier. In more detail this therefore shows by organisations such as Dell
“switching costs” can result in a success for the organisation. Another force which can be
used to analyse Dell’s inventory management system is the Porter’s ‘Threat of substitute
products’ for organisations. The model focuses on substitute products and how they
increase profit margins for organisations. The reason being that this seemed to be an
adequate model because it represents “perceived levels of production differentiation” can
boost the ERP system.
“Dell controls its inventory and costs by being a demand-pull company”, this helps Dell be
more profitable and also have no apprehensions about stock exceeding demand.
How Inventory Can Help an Organisation
Focusing on Dell it can be argued that they produce many computers and research has told
us that they only begin to build a computer once they have received a customer order as in
some cases they can manufacture computers where supply exceeds demand. However this
is where their inventory management comes in as it gives them the ability to store the
excess produced products in their inventory and in situations where demand exceeds supply
they will have their inventory to keep them safe against backorders. Having an inventory
system like this then allows organisations such as Dell to have a good ERP system.
As it can be seen from the research conducted, an organisations inventory within the supply
chain management can help them with backorders and make a vital difference in their ERP-
type system. In addition to this there are some advantages of having a low or not having an
inventory system. This was discussed in a journal found on the internet which stated that
“Dell has replaced inventory with information”. It can be argued that this is a contradiction as
it has been said that the inventory management has helped Dell and it has also been said
that by Dell switching from inventory to information it had turned Dell in to “one of the fastest
most hyper-efficient organisations on the planet”. In further argumentation Dell changing

7. their inventory system to information could be due to them wanting better information
systems and wanting their systems on software’s such as Oracle.
However it was also mentioned that Dell has “shifted some of the inventory to its suppliers”.
This simply allows them to be safe and if there is a disruption within the supply chain the
supplier bears the burden of inventory not Dell. This research undertaken can be linked to
Porter’s model of ‘The threat of the entry of new competitors as they are using methods to
block entry for new comers.
Supply Chain Planning
Having a strong supply chain planning management leads to a successful transaction to
goods and the delivery of goods, services and information from the organisation to the
customer. An article based on Dell’s supply chain management showed how by Dell having
a strong supply chain planning has lead to them having a stronger information system within
their ERP. In order for Dell to meet all the conditions of the supply chain management they
use solutions form the i2 supply chain management. It was said that “i2 streamlines the
supply chain by providing component suppliers and Dell planners with global views of
product demand and material requirements”. This results in Dell delivering to their customers
exactly what they want. Dell’s business-to-consumer model can also be analysed as Dell
integrates directly with their customers to meet their needs and supply them with the product
directly instead of resellers supplying their customers. Having been on Microsoft’s website
something different was found. Microsoft have based their supply chain planning through the
information system in which help is provided on various areas such as delivery, goods
information, services to all.
Embarking on the supply chain planning a company must implement their ERP system.
Supply chain planning can make it easier for organisations when it comes to inserting certain
data in to their ERP system. The way this is done is due to the supply chain planning
providing better system-related benefits. It was found on IBMs website that a supply chain
planning system can identify data problems such as customer name the shipping address
and order and delivery related problems before the data has been entered in the ERP
system. Other articles have shown how having a reliable supply chain planning system in the
ERP-type system leads to high performances. By organisations such as Dell having good
supply chain planning they can increase inventory targets as well as having “accurately
model future networks, and make well-informed distribution decisions based on sales
forecasts, customer segmentation, sales orders and actual production”. However ERP based
supply chain planning requires many business benefits but the achievements “of these
benefits relies on the way the technology is implemented and managed”, many aspects have
to be taken in to account such as the customers, the processes and strategies involved in
the planning of the supply chain as well as the technology.
Another model which can be linked to Dell’s supply chain planning is the business to
consumer. Research showed that most of Dell’s sales are business to consumer as Dell has
given its customers the opportunity to make online transactions. This can be linked back to
research found in another report which stated that “Supply chain management shortens the
cycle between the component, the manufacturer and the end customer”. This shows how the
supply chain planning and the business to consumer allows organisations such as Dell to
interact with their customers quicker.
Research also showed Dell using the business to business model however this did not prove
worthy for the business and caused problems in their ERP system simply because Dell did
not research in to the model before using it. However business to business has proven
beneficial for certain organisations and has given a boost to their integrated system as well
as improving both efficiency and productivity levels.

8. Accenture
In the supply chain planning it could be seen that Dell’s planning had primarily been based
on manual mechanisms which included spreadsheets, voicemails and messages which had
been faxed, which proved not to be beneficial for the company. Therefore to improve their
supply chain planning Dell decided to interact with a partner which would improve this. This
is where Accenture comes in; Accenture helped Dell improve their purchasing and
manufacturing gap as well as “drive real-time order fulfilment”. In order to make all this work
Dell and Accenture used i2 technologies supply chain planning strategy. They used this
application to integrate three elements: “Factory Planner (manufacturing scheduling), Supply
Chain Planner (inventory planning) and Collaboration Planner (communication with suppliers
and logistics operations)”. The benefits were that it allowed Dell to make more use of their
ERP-type system by making online orders from other suppliers and minimising the time
certain products are held in inventory.
PROCUTION
What Is Production In A ERP-Type System
Production is a process where raw materials are manufactured and made in to goods. Once
the goods have been produced, manufactured and assembled they are then sold on to many
different people such as customers. The production process and the goods produced can be
both ‘Hands On’ and ‘Hands Off’.
The production process consists of three stages:
1. The quantity of the commodity produced
2. The form of the good created
3. The temporal and spatial distribution of the commodity produced
Dell’s Production Process
From the research undertaken it can be seen that Dell uses many different methods and
models in order to produce goods from their raw assets. One of the main models found
which is used by Dell was the ‘Build-To-Order’ process method. The build-to-order method
simply means that Dell begins to produce a PC or other services only after a customer has
placed an order with them via the internet or over the phone. This again can be linked back
to previous research focused on in early parts of the report which also showed how Dell
does not take the risk to produce any products until they are certain that they have an order.
The reason being this production was focused on is because this allows Dell to have a
stronger ERP system in order to respond back to customer orders more quickly and
efficiently. It was said in a journal that organisations that have chosen this method “have
been able to deliver custom product quickly...”
The build-to-order process can be seen as “product configuration” and it acts as a kind of
software which allows customers and others to specify their requirements. This can interlink
with how Dell allows their customers to configure their own PCs before they are produced.
Dell’s build-to-order method portrays how the company is improving the capacity and
performance of their ERP system, yet at the same increasing profits and lowering their
inventory levels. This can be also seen from previous research and new research as it was
stated that “Dell does not own the inventory”... and this inventory is simply handled by Dell’s
suppliers.

9. A website was found which had some focus on the build-to-order model which is being used
by many organisations in today’s world. The website clearly mentioned how industries such
as the automotive and computing “appear to hail ‘build to order’ as a benefit for both
customers and companies”. This again supports the view of how an organisation using the
build-to-order method customer can obtain exactly what they require instead of a customer
having to buy what is in the organisations inventory.
The production process benefits the organisations ERP system. The ERP system gives the
company a boost in their productivity margin as well as improving engineer skills when it
comes to the production process. To some extent this overlaps with inventory as the ERP
system at this stage can help the organisation minimize their inventory and increase both the
production and manufacturing processes. A good statement found to support this up was
from a website which focused on how build-to-order manufacturing process allows the
organisation to “reduce inventory levels...”
Mass Customization
Mass customization simply is another form of producing goods from raw materials; however
it gives the organisation a better ERP system. A report was found which focused on mass
production for various companies however through my perspective it could be linked back to
Dell. The report was based on a ‘MTO Strategy’ and it said how “Dell has developed flexible
manufacturing techniques that allow the company to virtually build computers to order”, the
report also mentioned how the company runs a strong and lean production process which
therefore allows them to build orders for their customers more quickly. In addition to this a
statement made in another report which was found links in very well with this, the reason for
this is because this particular report showed how a customer can order a computer and have
it delivered to their house within three days Going back on the ‘MTO Strategy’ report it
focused on how organisations have used mass customization in order to specify products for
their customers and to use the build-to-order method. This particular report was focused on
because it gave some information which could be analysed and linked back to Dell’s ERP
system. Clearly from the information obtained one could analyse that by having mass
customization within an organisations production process could bring benefits such as better
software usage in their ERP system.
Another website showed how most of Dell’s production process from when the products get
assembled “is outsourced”. It also mentioned how by Dell leaving certain parts till the end of
the assembly process provides the “benefits of mass production”.
The Bargaining Power Of Suppliers
By looking at Dell’s production process and the mass customization porter’s model of how
suppliers, raw materials and other assets can be a “source of power over the firm”, in my
view this can be contradicted. The reason why this is being used to analyse Dell in this way
is because it shows how the organisations integrated ERP system allows them keep hold of
their customers rather then giving them the ability of switch which would lead in the company
losses.
Business to Consumer
The business to consumer model can be linked back to Dell’s production process. This can
be seen from the build-to-order production method used by Dell; this simply creates a strong
relationship between the customer and Dell as customers can place orders online and over
the phone for their own configured PC.

10. In addition to this Dell also has other business models such as Business to Business which
allows the organisation to create a link with it’s suppliers in order to increase revenue this
however has already been focused on in the supply chain management section were Dell
gives their suppliers the burdens of their inventory.
ERP Manufacturing Process Software
The ERP manufacturing process software allows organisations to gain a more prolific
production process. It can be indicated that there are many different elements within this
software which all ensure the company gets maximum efficiency out of their production and
manufacturing process. The website focused on how the “manufacturing process is greatly
aided by the use of a single software solution that is able to integrate all aspects of
production”, from this it can be conducted that the manufacturing ERP system software
allows the companies to have a more defined and well-designed production development
when it comes down to converting the raw materials in to useful goods.
One good example found on the website was a company called ‘Ere Source ERP’. It was
said that the companies ERP system gives them the ability to provide various business “with
the capacity to monitor every phase of manufacturing from start to finish”. There ERP system
therefore allows them to use this integrated software and generate various products when in
the production phase which in result leads to profits. This can be linked back to the planning
process purely because it allows the companies to focus on current and ongoing projects
rather then spending more time on the planning schedule for the production process.
How Supply Chain Management and Production Interconnect
Having a look at all the research undertaken it can be said that supply chain management
and production interconnect with each other in various ways and in various areas. Firstly in
my view the very obvious statement which can be made is that a supply chain management
is needed in order for the products which have been produced to be supplied to suppliers
and consumers.
Secondly both the supply chain management and the production overlap with regards to
inventory and both work around the lowering of inventory which can be seen from the
research and evidence found on Dell’s inventory management. Both of these elements have
areas in them such as planning and scheduling and both of them are used in order to allow
the organisation to have easy transactions with their customers.
Conclusion
In conclusion the report shows two elements of the ERP-type system supply chain
management and production and how each of these elements interconnects with each other.
From the research conducted it can be concluded that supply chain management and
production play a vital role in an ERP system for various reasons such as to lower inventory
or raise revenue which can be seen from the ‘Dell Inventory’ section. By undertaking
research on the organisation Dell it was found that there supply chain management and
production has helped them in various areas within their business and it has given them the
ability to introduce new models such as the business to consumer and business to business
models.
By looking at the research found and analysing the organisation using Porter’s five forces it
was concluded that Dell as a company place all their inventory burdens on their suppliers
which allows their ERP system and them as an organisation to stand strong. From this report
it can be seen that having an ERP system is vital within an organisation as it allows the
organisation to produce and supply various products to consumers, epically focusing on Dell

11. it can be said that their ERP system allows then to supply their customers with products
quickly by having a quick production, manufacturing and assembly time.