Logistics and Supply Chain: Marketing Essay

Logistics and Supply Chain
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Logistics and Supply Chain
There are myriads of terms that one comes across in a business environment, and logistics and supply chain management are two that often used interchangeably. Although the terms are closely related, there is a clear distinction between the two. Supply chain management from a broader perspective that encompasses logistics and other strategic decisions that ensure the consumer needs are satisfied and the products are delivered timely (Tien et al., 2019). Logistics, on the other hand, deals with the movement, packaging, inventory management to ensure equilibrium on supply and demand (Tien et al., 2019). Most global corporations have mastered the art of logistics and supply chain management, employing different models that best suits them. An effectively executed strategy can make all the difference between competing brands; therefore, it should not be overlooked. Dell, a Texas-based computer technology company, adopted an outstanding logistics and supply chain management model as early as the 90s, famously know as the direct model.
Dell anchored its supply chain management to a philosophy of make-to-order as opposed to its competitors, who followed the philosophy of make-to-stock (MacNeil/Lehrer Productions, 1999). The direct model lets the consumers make an order of their desired computer product via telephone call or mail. The specifications are then noted down, and the manufacturing side works on the specifications while assembling the product. The direct model of the supply chain also inspired the magnificent growth of Dell in internet sales. While the competitors offered their pre-configured computer in their retail stores, Dell focused its configuration on customer demands, shifting the value chain to the consumer and consequently dominating the industry. Dell’s peers used forecasting to find a balance between supply and demand (MacNeil/Lehrer Productions, 1999), and this might prove inefficient in case the forecast is wrong.
Innovativeness within Dell supply chain extended to the assembly line. Instead of different people working on separate components, a self-sufficient team, referred to as a cell (MacNeil/Lehrer Productions, 1999), worked on the customer order specifications to completion. Cell manufacturing cuts down the assembling time and increases productivity as opposed to conveyor-based model adopted by other manufacturing companies. Dell's direct model steered by customization failed to withstand customer flexibility, and its competitors capitalized on the weakness. Nonetheless, the model brought about lots of competitive advantages that helped Dell remain dominant on internet sales and as a result, it outshone its competitors for a remarkable period.
Dell’s direct sale approach enabled them to bypass numerous shortcomings with the traditional distribution methods in the computer manufacturing industry. Inventory management with the legacy approach depends on the efficacy of the forecast. According to MacNeil/Lehrer Productions (1999), inventory with the traditional supply chain system could take up to four weeks in a channel, whereas Dell's innovative approach took roughly a week. The time taken to asse...