Why Supply Chains Should Be Involved in Product Design?

10-2: Final Project– Part 2

Why Supply Chains should be involved in Product Design
Duran Calan

Southern New Hampshire University

QSO 635: Int’l Supply Chain Management

January 7, 2016

                           Why Supply Chains should be involved in Product Design

        In this case study, it is tried to explain the effect of material or supplier selection on the performance of a company in the design process. Product design is one of the most important processes in supply chain management. In general, in supply chain management the effectiveness of activities is emphasized. However, the effects on the supply chain of product design and management are generally neglected.

        Product design should be designed to minimize supply chain management and supply chain risk. A new product design always brings with it a new risk in supply chain management. For this reason, new product design should be designed by assessing potential risks. The higher the technical level of the product, the greater the risk that the product is produced and marketed. Therefore, the supplier is a critical issue in the new product production phase. The lack of experience in this matter causes this risk to increase further.

What are the fundamental reasons for Dell’s success?

        Dell is one of the world's largest computer vendors and companies that have managed to lean on the internet. The most important contribution of the firm to sales and profitability is thought to be the widespread use of the internet in supply chain management. The Dell company does not produce products for stock, but manufactures according to orders. Dell manufactures high volume, low cost products directly for the end customer. The assembly line is starting to work when the customer gives an order. Dell offers a range of unlimited PC configurations to capture the increase in profitability and uses direct online sales method primarily. Dell's ability to give customer design opportunity satisfies customers simply because it allows them to purchase a computer specific to their needs. With different options being easily displayed on the web, Dell is influencing customers (Oracle, n. d.).

        Dell also selected to provide a web page for suppliers to track past purchases of many business customers and place orders for their current needs. In addition to this, they have also created a vendor-specific web page that allows them to see orders for their parts and see the amount of inventory available at Dell. This allows suppliers to plan for their customer needs and thus reduce the bullwhip effect (Dharmawardana, 2013).

        Competitor companies that sell to distributors and retailers must fill out shelves in the retail store before the product reaches the customer. However, as soon as the model is ready, Dell offers the product on the internet. No delay is possible for PC makers selling to distributors and retailers. For this reason, traditional traders are trapped in configurations that cannot be sold simultaneously with the configurations being sold. Dell, on the other hand, can match supply and demand. Dell can focus on its environment by moving away from the retailer and retailer elements using a direct sales method for PC sales. The direct sales model allows Dell customers to place orders at anytime from anywhere in the world in cheaper ways (Dharmawardana, 2013).