Discussion on Efficient Supply Chain

During class 6, we explored the efficient supply chain of Dell Company where Dell revolutionized the logistics of computers. The tradition of a typical supply chain has many negative aspects. Often, it has much more intermediate cost which makes products more expensive to consumers than its original price. Also, inventory of products may accumulate and it can depreciate drastically, especially technological gadgets where the market flow updates quickly. Companies such as Dell gained many advantageous edge while fully utilizing the efficient supply chain. When products go straight from the manufacturers to the consumers, the company can customize the product to the liking of individual customer. Giving exactly what consumers want will bring in higher profit because consumers are usually willing to pay more for something tailored for them. Plus, customer satisfaction will bring company intangibles assets such as good will and good reputation which are all important to maintain the operation of the company. Another significant advantage is that efficient supply chain will generate zero inventory. Zero inventory promotes company’s organizational effectiveness which can lead to sizable increase of profit. Efficient inventory is an innovative approach to increase profit and reduce costs.