Dell's electronic commerce logistics mode analysis

Abstract: dell is the world's largest computer distributors, its success depends on the perfect combination of Internet, e-commerce and logistics, and build the appropriate choice of the mode of electronic business logistics. Articles from Dell e-commerce model building, processing, function and advantages and disadvantages to are analyzed.

Key words: dell inc., e-commerce, logistics mode, function

一、The background of Dell Computer Company

Dell Computer Company was founded in 1984 by entrepreneur Michael dell founded； the company has 35800 employees in 34 countries around the world. Dell concept is very simple: according to customer requirements manufacturing computer, and direct delivery to the customer, can be more effective and clear understanding of customer needs, and then quickly respond. Dell design, development, production, marketing, maintenance and support a series of personal computer systems from a laptop to the workstation. Each system is customized according to customer's individual requirements. The revolutionary initiatives have made dell computer systems of the world's leading distributors, among the industry in the major manufacturers.

二、Introduction of E-commerce Logistic Model

Ultimate consumers directly place an order through the ecommerce sites. Company in accorded with the demands of consumers. Individually tailored products and service, and directly delivery to your door through third part logistics .This is e-commerce logistic model. In this model, Dell integrates suppliers and final consumers into an optimizing supply chain. And the medium of internet and the intervention of the third party logistics the competiveness of the products greatly improved.

（一）Large and Professional Third Party Logistics

A large coverage effective logistics system is the important pillar of Dell’s success of direct sales model. Dell’s logistics outsourcing logistics company completely ,mainly by cross sexual logistics companies such as DHL、BAX、FEDEX . These companies have a sound network ,professional operation and modern management .By adopting the third party logistics of door to door service , Dell greatly reduces the logistics cost ,improve the logistics efficiency ,improved customer service levels.

（二）Form strategic alliances with suppliers

As company system in a ring, Dell well suppliers to maintain close relationship with suppliers. Dell to take strict qualification review, require suppliers to be advanced in efficiency, not only on product quality management, also take on quantitative evaluation method, to ensure that suppliers of spare parts can be directly into the company's production line without having to do sampling inspection. Through the Internet, Dell and virtual integration formed a close link between suppliers. To ensure that can in accordance with the standards of the dell itself modulus of parts quality, rapid and effective management circulation and inventory required for emergency replenishment order. At the same time, dell will be the latest demand information and forecast information in real time transfer to supplier. Openly sharing in supply chain planning and resources, and help them to weigh the market, keep inventory to a minimum. Driving the development of suppliers together direct sales model, implementation company win-win cooperation relationship with suppliers.

三、Dell's e-commerce logistics model construction reason and process

Founder Michael dell will business philosophy aimed at, according to customer requirements manufacturing computer, and direct delivery to the customer, thus make dell can effective and clear understanding of demand, and then quickly respond. Thanks to its direct-sales model, dell has quickly become the world's top computer multinational group. In 1996, dell (dell) embedded in the function of electronic commerce on its website, so that its direct sales model from the traditional business to e-business. To further improve the service level, the company strengthens the competitive ability.

Dell's logistics since confirm the order to confirm the order to receive payment for the logo, need two days time after receive payment for production preparation, production, testing, packaging, shipment preparation, etc. To logistics system operation entrusted to third-party logistics companies, and promised to delivery is 2-5 days after your users per computer in some remote areas to receive the freight of 200-300 Yuan. Dell through restructuring and management of the supply chain, effectively reduce inventory, shorten the production cycle, and greatly increase the competitiveness.

Dell by telephone, internet and face-to-face contact, establishing a good communication and service support channels with the customers, on the other hand, Dell also rough the network ,the use of electronic date interchange connection ,so that the upstream parts suppliers can timely and accurately know the number commend of parts required time ,hereby greatly reducing the inventory ,which is called "Dell to information to replace the stock". In this way, can Dell and suppliers establish a "virtual" enterprise.

四、construct the system of functions

(一) logistics and supply chain processes and functions

Dell treat any consumers are using sales customization mode, the logistics service is also in line with this sales policy implementation, and then followed eight functions.

1、The order processing in this step, dell accepts customer order. First to check whether fill in the complete project .Then check that the order of payment terms. Only after the payment the order will automatically send out spare parts orders immediately and transferred to production database .Orders will immediately turn to production department for the next step work. Users can order, the products of the production process and delivery date and shipping company tracking delivery status and so on.

2、Pre-production: From taking orders to before the official start of the production, waiting for parts for a period of the arrival of the time, this time called pre-production. Pre-production time should the consumer system varies, Depends mainly on whether have parts available in supplier's warehouse. Order confirmation will typically have two forms, namely phone or E-mail.

3. Fitting preparation. When orders turn to the production department, the parts list of items which are needed will automatically generate, and relevant staffs put all the items on the assembly line.

4. Configuring. Then the staffs get the items from the assembly line to assemble and install them to a computer. Then will be the testing procedure.

5. Testing. The test software will test the assembled computers in the inspection departments, and the qualified machine will be send to the packing room.

6. Packing. The tested computer will be put in the crates.

7. Delivery preparation. In general, it will be ok at the next day of the end of the production processes.

8. Delivery. According to the date and the locations send the goods to the customer.

No distributor, Dell established wholesalers and retailers in the supply chain. But directly by the manufacturer (Dell Company) to sell products to customers’ .This is Dell Company prides itself on your computer "direct sales to the user's hand, to remove the profits of retailers and exploitation, the remaining money to our customers."

(二) "The service provider" link

      Agent service does not provide the product to the customer, nor do buy a product to Dell Company. They only provide service and support to customers. To take the direct mode, means to remote areas will have a customer, any orders to meet .While the Dell company (China) is a newly established company, not by the manufacturing enterprise transformation the original and no distribution network, logistics system is available for use. To build a larger coverage, rapid response, cost effective logistics network and logistics system is not an easy thing to Dell.

It is a time-consuming for Dell's vast project to self-building a large coverage area, responsive and cost effective logistics network and logistics system. And Dell does not have core expertise in logistics management, due to delivery is not caused by the economic operations and other related costs and the cost of the increase is irreparable. In the face of fierce global competition trend, the enterprise is one of the strategic countermeasures of areas to focus on what they are good at management, strive to lead in terms of core technologies; while the company is not good at business separation, entrusted to have special skills in the field, trusted partner. So Dell to logistics outsourcing .First of all, through a variety of ways make a thorough investigation for the creditability of the alternative transport agent enterprises, network, business ability, etc. And to the primary trial run small business of enterprise, to practical study of the enterprise service ability and quality, to reject and cancel the agent qualification .And the qualification for transport agent enterprise strict monthly operation review.

In fact, in the supply chain , Most of them have been handled by Dale is information flow ,it makes that not only can concentrate on offering high quality after-sale service ,but also the company can be avoided in facing “excessive large organizational structure” .Component Supply Management , Dale Company and Proxy Server, all three together form a virtual enterprise. They work closely with by way of electronic data interchange is to achieve a more optimal allocation of resources, all the same time also reduces the cost is to provide customers with quality products and services.

五、The experience of the building

The sales of Dell is all through the internet and intranet .E-commerce distribution which can get the user's first advance payment .After waiting for the freight to the freight company to settle the freight again( users should pay their own freight ).Dell not only tie up the user's liquidity, liquidity also tie up with the logistics company, according to single production inventory risk .These factors make its annual profit margins of more than 50%. And, of course, no matter what the methods of sales, first of all must be good for users .the value of Dell's e-business model sold directly to the users: one is no matter how personal of the user's requirements can meet; the other is dell's lean production, sales and logistics process among can save some cost, so dell's price is low; Third, users can enjoy the perfect after-sales service.

Dell goes through direct sales model, to produce products by needs, fall as supply chain；users can choose needed products according to their own situation: it greatly shortens the operation time and also simplifies the information process which transferred in the company by adopting e-commerce sales model. It created the electronic commercial logistics of precedent.

Dells electronic commerce logistics mode analysis