Operations Management for Competitive Advantage, Research Paper Example

The below essay is designed to review the strengths and weaknesses of Dell’s operations management strategy and its impact on the firm’s productivity.

Dell Computers was founded by Michael S. Dell in 1984. Since then, it has become a leader in the computer industry, focusing on serving the customer. Today it stands on the 51^st place on the Fortune 500 list (CNN Money). Its main product line consists of desktop computers, notebooks, severs, workstations, storage (memory) products. One of the main strengths of the company is that it offers custom configurations: produced to order. The main suppliers of the company that deliver operation systems and hardware are Windows, Intel, Sony and NVIDIA.

Dell has historically engaged in a direct operation model, inspired by customers. The five forces of Dell’s operation are based on three building blocks of competitive advantage: efficiency, quality, innovation, and consumer responsiveness (Chase, Jacobs & Aqualino, 2006).

Dell currently operates in more than ten countries, therefore, it is able to localize production to different areas, reducing costs associated with logistics. Dell’s direct model of supply chain and operation connects the company with customers without the need of a “middle-man”. Further, the company has a minimum inventory and maximum customization.

Operations management can improve the organization’s performance by adjusting the operations to the needs of the customer, empowering employees and optimizing activities within the process: production, innovation, logistics, marketing and sales.

Dell’s operations strategy is based on the idea of creating computers and devices to sell directly to the customer. Before creating an operations strategy, the company had to evaluate the cost, quality, time and flexibility of producing computers in order to develop one of the main competencies of the firm: productivity. Further, the designing of an operations function, based on structure and infrastructure had to be completed (Hill, Charles & Jones, 1998). The redesigning of the supply chain management has resulted in an operations management intervention that forecasts requirements of production, raw materials, and human resources through information exchange systems.

References

Chase, R., Jacobs, F. & Aqualino, N. (2006) Operations management for competitive advantage. 11^Th Ed. McGraw Hill, New York.

Hill, Charles W. L., & Jones, G. (1998) Strategic Management Theory. New York CNN Money. Dell. Retrieved from http://money.cnn.com/magazines/fortune/fortune500/2013/snapshots/1053.html