Dell Inventory Management Inventory Management: Thesis

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' For example: a low-inventory method requires careful monitoring of past behavior of consumers during key periods of high use, and this market research and data tracking comes at a price, if it is done in a through and effective manner (Supply meets demand, 2009, Accenture). Also, computing is such a necessity for some users, even waiting one day for the latest technology may be unacceptable. Dell relies upon almost no 'safety stock' and orders directly what is needed. Dell never begins to assemble a computer system until an order is actually placed, and keeps one-tenth the inventories of its competitors. Having well-trained technicians is essential to keep turn-around down to only a few days (Supply meets demand, 2009, Accenture). But this assumes consumers are willing to wait a few days with a non-functioning or nonexistent system.

At clear Dell advantage has been "a favorable cash-conversion cycle -- sales are readily transmuted into cash" a rarity in purchases of larger-ticket items "minus 20 days in a recent quarter" (Supply meets demand, 2009, Accenture).

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Dell must have a seamless system of communication between itself and local purveyors to achieve this benchmark: "Dell orders most of its required system components online. As the company receives customer orders and schedules production, its manufacturing facilities send an immediate signal to its suppliers' remote inventory locations, which triggers the shipment of only those materials required to build systems that fulfill current orders. Similarly, suppliers can tap into a dedicated Internet portal to review Dell's specific order requirements and also confirm their ability to meet Dell's delivery goals. In these ways, Dell can automatically and seamlessly process thousands of customer orders" (Supply meets demand, 2009, Accenture). Dell's lean and responsive system has proved profitable, and consumers today have responded to its stress upon customization. Its lack of backordering or safety stock and its effective deployment of technology have encouraged other local and national retailers to adopt it model.

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