MMG712VN08-D2 Understand the Nature of Supply Chain
In researching the strengths and weaknesses of the supply chains for Wal-Mart and Dell, it shows
that both establishes efficiency very early in its management and all levels.
In terms of strengths and weaknesses, the greatest strengths for Wal-Mart is its supply chain
management and low prices on high volume products. Wal-Mart appeals to mostly middle and lower
economic clientele. It is probable some of the people who might shop regularly at fine stores like Macy’s or
Tiffany would not regularly venture into a Wal-Mart, and vise versa. Wal-Mart has an important
component of the discovery phase of strategic planning, as it helps establish the base for analysis and
development of plans for the future of the company. Done well, this analysis will help the strategic
planning team develop effective plans for the future course and direction of the company.
Keeping such low levels of inventory is a challenge. While doing this, it can easily become a
weakness when the retailer is trying to keep low levels of inventory and integrate customer selections as a
on-going priority.
The potential issues facing Wal-Mart are always to stay ahead of its competitors and keep its no.1
rating among retailers.
On the other hand, Dell’s supply chain management is truly viewed as a strategic capability; it
drives coordination with, and in many instances it includes, activities such as marketing, sales, finance, and
information technology. Dell uses partners with third-party providers for most its logistics needs. Dell is
also in the relatively new process of centralizing purchasing into a global function and relocating buying
next to its suppliers. Furthermore, some supplier’s logistics facilities are set up next door to Dell factories
to function as access points. The supplier’s frequent deliveries ensure just enough on-site inventory to
mirror the next two hours of orders. In exchange for building partnerships and sharing information, Dell
expects its suppliers to meet lofty performance goals. Once every quarter, Dell meets with each supplier to
provide direct feedback on performance and future expectations. The supplier is given a scorecard, which
compares the supplier against its industry peers on cost, quality, reliability, and continuity of supply. These
detailed metrics help the company to manage its financial fundamentals to ensure superior shareholder
return over time. Dell demands that its suppliers move fast and drive cost reductions.
Dell has demonstrated that sustainable competitive advantages are a function of how effectively a
business can create and intertwine its processes and people to produce unique capabilities to match its
market segments. Dell’s competitive DNA may be impossible for other companies to “clone,” but the
authors firmly believe that there are many lessons to be learned—not only about the value of effective
execution but also about the value of the interplay between processes and people.
Not to declare a weakness, but the new decision to re-establish its supply chain management could
be a weakness at this time simply because it is still unknown or not tested.
The potential issue for Dell remains with its competitors.