2. Contents
1. Operational function .............................................................................................................................. 3
1.a Operational management at Dell ................................................................................................. 3
1. b Dell’s focus on operation management ................................................................................... 4
1.c Environmental factors affecting the dells operations .................................................................. 4
2. Strategic operational management.................................................................................................. 6
2.a Operation strategies of dell ............................................................................................................ 6
2.b operation strategy suitable for dell’s operations ........................................................................ 7
2.c corporate strategy and operational management ....................................................................... 8
3. Organization of operation process ................................................................................................... 9
3.a Factors affecting product design ................................................................................................... 9
3.b Layout of Dell ................................................................................................................................. 10
3.c Approaches to work measure ...................................................................................................... 11
4. Planning and controlling operations .............................................................................................. 12
4.a Capacity planning for sales operation activity at dell ............................................................... 12
4.b Inventory planning methods ............................................................................................................. 13
4.c Different approaches of quality control adopted by Dell .......................................................... 13
Conclusion ................................................................................................................................................. 15
References ................................................................................................................................................ 17
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3. 1. Operational function
1.a Operational management at Dell
Operational management refers to an area of management which concerned with
designing, overseeing and redesigning of business operations in manufacturing of
products and services. It helps to ensure that the operational activities such as
manufacturing and other activities are carried out efficiently and effectively by the
organization.
The operational management function of dell can be describe as follows,
In the dell’s operations it procures its inputs from suppliers and they manufacture some
parts required to assemble computers and servers. Moreover with regard to
procurement and distribution functions it manage and supervise the receipts of goods at
the optimum time and deliver the products to the customers on time based on the
orders placed by the customers.
In supply chain management it uses JIT (Just In Time) system to purchase its computer
parts from the suppliers. This JIT system helped them to achieve lot of improvements in
supply chain management. It includes cash to cash conversion cycle in supply chain
management. Dell was among top 25 companies in AMR list from 2004 onwards.
Further it was among top 5 positions in recent years.
Though the computer giant had a great customer demand and market growth along with
the decline in the prices and globalization has challenged to the supply chain of Dell.
Due to the low cost competition and ever changing customer requirements dell initiated
a three year project to change its supply chain by segmenting the supply chain in order
to response to customer requirements effectively and efficiently. Such supply chain
developed by Dell has optimum delivery speed, concerned on various product
categories required by the customers and optimization costs while aligning internal
processes of the company towards the vision of the company. This is the way that the
dell applied operational management to its operations.
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4. 1. b Dell’s focus on operation management
As described, due to the change in the customer requirements and competition from low
cost products has led dell to rethink on its strategies. Accordingly dell was targeting the
online sale which is a untapped market and therefore they are in the process of
implementing high speed delivery system to its online customers. Accordingly their main
focus was to deliver high quality product online.
Based on factors such as cost efficiency, choices of products, speed delivery to the
customer and personalized service dell has segmented its supply chain which address
to customer requirements effectively and efficiently. Dell was following the cost
leadership strategy where they focus on reducing the production cost by eliminating non
value added parts. Further they followed total quality management (TQM) to improve
the quality of the products while minimizing the cost and lower defects. Accordingly they
are producing computers with high quality and zero defects.
1.c Environmental factors affecting the dells operations
It is noted that there are several key environmental factors that affects to the operations
of dell.
Political factors
o Environmental issues
Dell may face to environmental issues with regard to its manufacturing plant
across the world such as carbon emission, green house gas etc
o Government policies
Existing government policies such as policies relates to the employment may
affect the dells operations
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5. o Wars and conflicts among countries
Dell’s operational activities may be affected by wars conflicts and civil unrest of
countries.
o Future legislations
Government’s future legislations may be affects to the dell’s operations.
o Trading policies
Trading policies among the companies may affect the dell’s operations
Economical factors
o Economic stability of the home country
Economic stability of USA which is the home country of dell may be affects to
operational activities of dell. Accordingly if the USA economy is stable dell’s
operations may also perform well.
o Global economic condition
Since dell is operating globally, global economic condition may also affect to
the dell’s operations.
o Market trends
Since dell is engaged in computer business market trends around the world
may affect to its operations.
o Interest rates and exchange rates
Since dell is operated all around the world operations may be affected for the
changes in interest rates and exchange rates.
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6. o International trade and monetary issues
o Specific industry factors
Social factors
o Lifestyle trends of the customers
o Demographic dispersion of customers
o Consumer attitudes towards the company and products
o Views expressed by media
o Consumer buying patterns
o Advertising and publicity
o Ethical issues
o Ethnic/religious factors
Technological factors
o Technological trends and developments
o Research and development expenditures incurred by the dell
o Maturing of technology and becoming obsolete
o Legislations relating to technological activities
o Potential innovation in computer industry
o Information and communication
2. Strategic operational management
2.a Operation strategies of dell
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7. Operational strategy has a horizontal relationship with other functional strategies
while it has vertical relationship with corporate strategy.
It can be noted that there are several strategies that suits for dells operations
Products are manufactured for orders placed by the customers
Products are manufactured to order
Products are developed with the expectation of demand
Make to stock
Products and services are customized according to the customer specifications
Out of the above mentioned strategies following strategies are applicable for
dell’s operations.
Products are manufactured for orders placed by the customers
It can be noted that dell assemble computers upon the request from its
customers and therefore this operation strategy can applicable to dell’s
operations.
Products and services are customized according to the customer
specifications
Dell’s strategy is to deliver customer specific computers to customers
based on their request. Thus it is more beneficial for dell to implement this
strategy as it aligned with the dell’s main activities.
2.b operation strategy suitable for dell’s operations
The operational strategy that dell adopted is build to order and customized products
that suits for customer requirements. Since dell has good customer relationship it
knows the customer needs and wants and therefore it has knowledge about the
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8. future customer requirements unless any significant change has occurred in the
computer market and technology. It is dell’s strategy to discuss with its customers
and identify their future requirement of personnel computers, servers and work
stations.
Dell was operating in the industry more than 20 year and it gives then a competitive
advantage over competitors such as HP and Acer. Therefore the best suitable
operation strategy for dell is to manufacture customized products based on the
customer request and the build to order strategy where the company expects that
the customers will order such product in the future. By this dell can offer various
new products every day to its customers and improve its brand name.
Other than those mentioned operation strategy dell use direct sales methods to
cater to its customers. Under this method without going through dealers and other
third parties dell obtain direct feedback from end customers and cater to their
specific requirements. This helps dell to obtain a competitive advantage and first
mover advantage over the other competitors. The customers also satisfied with
such practice as they can directly communicate with the manufacturer instead of a
third party.
2.c corporate strategy and operational management
Corporate strategy refers to the setting overall goals and objectives of the
organization that determine the future path of the organization. Such corporate
strategy is facilitated by business strategies such as marketing strategy, operation
strategy, finance strategy etc. in such context to achieve corporate strategy it is
necessary to implement business strategies. Accordingly operational strategy needs
to be planned an implemented with the intention of achieving corporate strategy
which is the ultimate objective of the organization.
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9. In the context of Dell Corporation to achieve overall objectives of the company they
have implemented corporate strategy to follow and operational strategy at the
operational level. For example if the corporate strategy emphasize the timely
delivery of goods to end customers, the operation strategy ensures the timely
supply of parts by suppliers and effective and efficient assembling in the
manufacturing plant. Finally timely delivery can be achieved as other activities also
taken place effectively on-time without a delay.
3. Organization of operation process
3.a Factors affecting product design
Key factors affecting Product design can be explained as follows
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10. Reasons to consider these factors in product designing,
Out of the total sales of dell 90% of represents to business entities, government offices
entities and in most situations personnel computers and work stations are used in
manufacturing plant for production activities or to provide support activities in
manufacturing plants. By identifying the specific requirements of the users dell has
designed customized computers which resulted in generating significant amount of
sales for the company. Dell performs this task by identifying the specific requirements of
customers whether it is for a hard use or at home use.
If dell produces computers that are used at home for factory purposes and vise versa
they will not be able to satisfy the customer requirements. Moreover dell needs to take
in to account other factors in product designing such as current trends and technological
developments which might affect adversely to the dells operations.
3.b Layout of Dell
The operation layout may have a impact on customer or information, material and the distance
they transport. The main concentrate of layout is on the length of travelling and quality of the
product thereafter.
If the operations of the organization including customers, information or materials
passes continuously from one location to another location it will have a impact on the
quality of the end product. Next throughput will be affected by the layout where the time
spent for transport will be reflected in the operations as well. Finally the space required
will be affected to the layout where it has a direct impact on the cost of operations fo the
entity.
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11. Process layout
Dell’s strategy is to manufacture computers based on the customer requirements and
this it needs to have a flexible layout for manufacturing process which helps to its
strategy. Most importantly, Dell changed its production in to large scale customization
which compelled it to adopt quickly changeable layout which enable dell to perform wide
range of different processing requirements. Dell can use this process layout for its
manufacturing purposes as it is more suitable for dell’s production strategies etc.
Process layout is also call functional layout since transforming materials having same
functional aspects are grouped in to a one set. Using different sectors of conversion
resources in many various techniques, products having diverse requirement will be
manufactured where it is very stretchy on developing and it permits to manage with
wide series of diverse requirements in processes. in the meantime it is difficult to
provide accommodation with flows crossing similar characteristics and crossings with
irregular paths.
Cell layout
Such layouts are use to reduce the complexity of the procedure layout. It use to split
resources with small groups where it can be used with wide variety of goods or product
group of goods as well.
This can be applied only for selected products which needs some precise arrangement
to reduce the disadvantages of process layout.
3.c Approaches to work measure
major methods that are use to quantify work and initiating standard are work sampling
and time study. Nature of the work itself chooses the alternative of the method that is
going to utilize in each level. Time study analysis is used for very thorough and
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12. respective operations where work sampling is used in operation that involve long cycle
time and which is uncommon.
Time study
Techniques used in the stop watch are used in time study. There it can evaluate a
videotape for the job or at the same time itself. Accordingly the job / task need to divide
in to quantifiable fractions and each part needs to be quantified on timely manner and
individually
Work sampling
This is a different technique used to measure a activity which is work sampling method
This includes viewing or inspection of a section of a relevant work related task. After
those observations statement can be made about the work activity with based on
findings.
4. Planning and controlling operations
Manufacturing ability that need for a firm to manufacture its products can be defined as
capacity planning. Therefore ability can be recognized as highest amount of activity that
the company can manage at a given time. This can be elaborated by no of maximum
units that the company can manufacture at a given amount of time
4.a Capacity planning for sales operation activity at dell
Dell can use order cycling system in capacity planning for sales activities. Dell can save
money and time from this system by carrying out checks in regular intervals and
reordering the required products which will not adequate when next check takes place.
However, since dell has follows just in time procurement technique and direct sales
method and mass customization of personnel computers and Work stations are
produced according to customer requirements. Further dell is encouraged to maintain a
lsessor space for stores activities. Which in turn save cost and time
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13. 4.b Inventory planning methods
MRP Planning Method
If the company can predict the demand company do not need to have a main
manufacturing plan. Thus MRP Planning used for such items where they use main
demand list to have a material requirement plan.
Moreover MRP can be used use for the items which have a strong dependency with the
demand.
Min-Max Planning method
In this method it identify the minimum number of units that need to have on the hand,
when reached to the reorder level.. This can be explain to highest amount as well with
exceeding limit.
Reorder Point Planning Method
Company may also need to establish stock control technique item attribute to Reorder
Point planning to provide automatic order processing
4.c Different approaches of quality control adopted by Dell
In order to meet customer requirements Dell provide effective answers as they have
concentrated on basic standards that can be lead the company to innovative and cutting
edge technology. They have built their strength in the computer market with future
innovation tactics that enable home office and enterprise level customers to be
benefitted at any time. Dell is in the objective to maintain its products with more
choices that the customers can select by having good rapport with best suppliers
market in other related felids and keep the cost at a minimum level.
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14. With best partnership and continuing levels of standards, dell was able to maintain and
achieve lots of accomplishments and cutting edge technologies. Those are,
Display Port which helps high resolution, high performance flat panel displays which
uses for display interfaces and applications
Standard method management tools on managed nodes, such as storage, servers,
switches, printers and client systems
Standard formatting for sorting RAID configuration information to enable
interoperability between different RAID suppliers.
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15. Conclusion
This report is presented to the management of Dell Corporation in relation to the
operation management of the company. This operation function of dell is identified as
activities relating to supply chain management such as procuring materials required for
the manufacturing to distributing a personnel note book or work station to its customers
and services provides after the sales. Accordingly dell has used its order manufacturing
strategy with Just in time system with the intention of increase the efficiency and
effectiveness of its operational activities which concentrated on timely delivery of
products to its customers. Further it is also revealed that selling products directly to the
customers has led dell to reduce its inventory requirements unlike its competitors. This it
is not necessary for dell to depend on resellers to clear the stock before technology gets
outdated. It is revealed that dell is aiming at obtain a competitive advantage over its
competitors by redefining its operational aspects.
Further it can be noted that the corporate strategy of dell is aligned with the operation
strategy accordingly top management decisions focused on the future of the
organization is having a greater impact on the operational aspect of the company.
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17. References
1. Dell,2012,Dell Inc,<Http://www.dell.com>
2. Ferdows, K. and de Meyer, A. (1990) ‘Lasting improvement in manufacturing’, Journal of
Operations Management
3. Gartner (2010), Case Study for Supply Chain Leaders: Dell's Transformative Journey
through Supply Chain Segmentation.
4. Roberta Russell & Bernard W. Taylor 2006, Operation strategy.
5. Dian Inda Sari 2008, Operation and How It Makes Work at Dell
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