Describe how Dell reduced its operating costsSolutionInforma

Describe how Dell reduced its operating costs

Solution

Information is one of the biggest drivers of supply chain and can prove to bethe biggest tool to decrease supply and demand gap making a firm more responsiveas well as efficient.Dell took sales data of customer choice and survey results to understand the supplychain strategy changes it needs to implement as well as the strength which itneeded to keep. This was possible due to dell’s direct access to its customersthrough the customized product it provided. This helped dell’s demand forecastaccuracy to increase with reduced error.Dell established its suppliers close to its own assembly hubs which increasedresponsiveness and lowered inventory thus decreasing the costs. Dell shared all itsdemand forecast, customer data and production schedule with its suppliers.

Dell also cut down the cost by closing a destktop manufacturing plant in Austin. As an initiative of cost cutting, Dell reduced the workforce by slashing the job of 3200 people. the company reduce the product cost and seek to save cost in all areas whether manufacturing, design, supply chain or operating expenses.

Dell also used the fianncing arm by acquiring the other companies.