Essay On Operation Management

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Dell Operation Management
Dell was founded on 1984 in Austin, Texas by a college student, Michael Dell. It start out with the name PC’s limited before changing its name to Dell Computer Corporation in 1988 and a few years later finally dropping the “Computer” to expand its business in other categories. As a multinational corporation, Dell has successfully implemented effective operation management throughout their production, distribution and sales. Dell orchestrate their brand in a global maneuver from its centralized headquarter at Austin, Texas. By using operation strategy in global environment, they create a competitive advantage, differentiated product, cost advantage and economic of scale as part business model. One of the example on which Dell is showing their competitive advantage is through their customer focus on direct selling of customized product at low prices. Another advantage that Dell have is a direct-distribution which eliminates wholesalers and retailers and allow a complete control over inventory levels and distribution cost. With no intermediary Dell could monitor and react immediately to their customers’ needs.
With the focus on mass customization, Dell provide a unique service and product to each of their customer by creating a standardize product options. To deliver their product and service in a timely manner, project manager has to create an efficient production schedule. Its goal is to improve its speed while reducing its risk. They have created a standardize framework on which is applicable to any unique order from the customer. Due to the successful method that Dell use for their own production, they construct a product in offering their project management system to be use by their customer. They name their service, The Dell Project and Program Management.
According to the article The Dell Story, the company maintain around 60,000 custom Web storefronts for their major corporate buyers. This means that Dell has to develop an accurate forecast and projection. To forecast the demand from their corporate buyers, Dell setup a database system to track the purchasing patterns and their budget cycles. This demand forecasting method is also used for their individual customers. They use a six-month basis forecast which are updated weekly. The suppliers will receive forecast in a monthly basis. The forecast is breakdown to a level of specific parts that need to be order. With the accuracy of 75% they communicate this result with their suppliers in order to have all the parts on time.
In designing and managing their products, Dell has developed a hardware platform called PTC®Pro/ENGINEER®Wildfire™ computer aided software which runs on Dell Precision™ workstations. In addition Dell also designed PTC Windchill® content and process management software to advance its worldwide data management and collaboration. Windchill software is used mainly to manage its product lifecycle all the way from concept stage to servicing stage. On the other hand they use their PTC Pro/ENGINEER Wildfire for product design with the goal of improving efficiency, accelerating time to market and enhancing business agility.
To ensure that they have produce and provide the highest quality product and services, Dell has developed a system called Dell Perot Systems which consist of four elements that works together: Quality Management System, Quality Control Plans, Annual Self-Assessments and Government Performance Assessment and Feedback. As part of Dell Perot Systems, they implemented ISO 9001:2000 quality management system that defines how requirements for quality are met. They focus on meeting the customer requirements and ensure their employee to get their jobs right the first time. On the other hand, quality control plans are part of the QMS (quality management system) manual which make sure that all requirements are according to their standard.
From the start of founding Dell, Michael has adopted mass customization strategy