Dell Pc sells directly to customers, removing intermediaries from the sales process. At lower than industry average rates, Dell employed this architecture for customized systems for customers. As a result of a lengthy inventory process that includes channel partners, SLC, 3PI assembly, and industri...
Dell Pc sells directly to customers, removing intermediaries from the sales process. At
lower than industry average rates, Dell employed this architecture for customized systems for
customers. As a result of a lengthy inventory process that includes channel partners, SLC, 3PI
assembly, and industrial engineers, L5 accrues more production and transportation costs than L6
(Kapuscinski et al., 2020). There are far too many chefs in the L5 kitchen, which complicates the
process and leads to misunderstandings that have an adverse effect on the quality of MB, as
described in the case study. While packaging costs are lowered in L6, there remains a separate
logistics cost for chassis and motherboards in L5. In the US, 3rd party integration expenses exist
for MB, but in L6, these are gone. The L5 motherboards are sent by air, but the L6 integrated
motherboards are shipped by water, which is more cost-effective. Manufacturing costs and time
go up and overhead management becomes more difficult as a result. Supplying motherboards on
schedule to contract manufacturers can help Dell to deal with the rise in L5 production caused by
the company. In order to avoid problems with supply, the business must also keep inventory
levels and several vendors for the Chipset (Kapuscinski et al., 2020). The standardization of
operating procedures and complete quality control should also reduce engineering concerns. To
prevent falling into the trap of market fluctuations, forecasting should be a standard practice. In
the event that a new product is launched to the market, better preparations should be made to
deal with fluctuations in demand. The number of customization options should likewise be
limited. There has been a rise in total manufacturing price since 2005 due to an increase in the
price of Level 5 manufacturing, which was discovered by Dell's desktop PC production business.
For North American locations, the cost of air-freighting motherboards and 3PL integration is
much greater than for sites that do not require 3PL integration because Dell will handle the 3PL
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