The Dell Direct Model This model involves several factors Low cost high speed distribution and Build to order manufacturing namely: Direct relationship with customers These three factors areprocurement system essentially the backbone of Dells operations and the means through which the organisation is able to differentiate itself from competitors, therefore sustaining a significant competitive advantage. Dell is the entire distribution channel from the procurement to the delivery of the finished product/service to the consumer. By eliminating the middleman in the supply chain Dell is able to exert greater control over cost and quality in the product and the efficiency of the lead-time. The organisation realises that each of its market segments has different characteristics - different support costs, margins, levels of investment and capital growth. Dells Direct model has brought about the Tailored support needs and services for each marketfollowing advantages: segment, there by avoiding the cost associated with the traditional distribution channel. There is no wholesaler or retailer support cost to bear, only customer As a result of not using a traditional distribution channel ofsupport costs. manufacturer -wholesaler -retailer, Dell does not have to contend for shelf Building to order means that the organisation operatesspace for its products. on just eight days of inventory, if at all any. This is significantly advantageous in a dynamic technology industry. By having a limited stock of goods Dell reduces the risk and cost of associated with products becoming obsolete. Thereby, providing customers with the most up to date technology. The Dell Direct model does not only involve a direct relationship with customers but also includes suppliers. Through the use of the World Wide Web, Dell has been able to integrate both customers and suppliers into its manufacturing and logistics function.
