Dell's Supply Chain Management Practices

Dell's direct selling model traces its origins to Michael's idea of selling computers directly to the consumer eliminating the need for middlemen and distributors. Michael believed that by selling PCs directly to the consumers, the company would be able to better understand the needs of its customers. The first computer that the company introduced in 1985 - Turbo PC, was advertised in computer magazines and sold directly to customers. Dell also began employing computer literate sales personnel, who guided consumers in their choice of systems. Each system was assembled according to the preferences of the customers. This option helped customers to get computers at a price lower than other brands...

Dell maintained a database to track the purchasing patterns of corporate customers and their budget cycles, in order to forecast demand. It also maintained a similar database for individual customers in order to cater to their future requirements for PCs. Through its forecasting techniques, Dell was able to forecast demand with 75% accuracy. Thrice a day, the changing demand patterns were communicated to the major suppliers. In all the countries in which Dell operated it had a direct sales force, which was directed by the marketing department located at the headquarters...