We are living in exciting times. Technology is making unprecedented advancements affecting all walks of life. New Economy and new technology have paved way for new ways of business namely E Commerce. Businesses are under intense pressure to perform in the market place and are vying for space amongst competitors. While the managements are under constant pressure to meet new revenue targets they are also under pressure to add to the bottom lines and reduce costs. E Business has come in at the right time to help companies explore new channel, new markets, to beat competition as well as cut down the costs. Companies that sell their products and services and provide customer service online have managed to beat competition successfully and take the lead.
Dell is one such early adaptors of technology who took the lead in offering Direct Selling option using internet. Competition in the Computer Desktop and Laptop market is very intense with all of the big names like IBM, Lenovo, HP etc. The margins too are very thin owing to the fact that the prices are falling and the technology is changing every few years. In such intense price sensitive market, the pressure to keep costs under control is always increasing. Dellâ€™s direct selling model has been a huge success right from the time that they started selling online.
Getting into E Business is not a simple process of setting up a website and enabling online transactions. There is more to it that just using the internet and technology to book orders. E Business calls for building a new business structure in the Company that includes the entire Organisation. Forward and backward integration will need to be in place. All of the business functions in the Organisations would need to be integrated and shifted to Enterprise technology or ERP platform with seamless integration.
While order management and financial transaction reconciliation is important as far as the e sales is concerned, the backend supply chain would need to be equipped to manage the entire process from manufacturing to delivery to the customerâ€™s doorstep within the committed time. The manufacturing or assembly is carried out in one location while the customer might be located in another country or region. Such integration of manufacturing, supply chain and deliveries cannot be managed by the Company alone. It calls for collaboration and partnership with several partners and service providers along the value chain. It also calls for establishing and integrating processes, technology, trained manpower and focus as well as dedication of managements and relationships across all channel partners to ensure smooth flow of information as well as physical products. In case of Dell, the raw material and component supplies are housed next to the assembly plant by a third party service provider on behalf of the DELL vendors.
VMI or Vendor Managed Inventory ensures that Dell gets the supplies of raw materials immediately upon request at its plant and Dell does not own any inventories. Once the assembly is completed, a third party service provider picks up the consignment, stores it at the warehouse, ships it to the destination after completing all documentation and formalities. At the destination the agent or another third party service provider partner picks up the consignment for onward delivery to the Customer at his door step and finally uploads the delivery confirmation into Dellâ€™s tracking website. All through the chain, host of service providers are engaged and systems and processes are relied upon to track, manage and control the shipments and deliveries at all times. The entire E Business program calls for establishing and integrating technology as the business driver and leveraging on technology to deliver superior delivery service beating competition. Such a business endeavour calls for establishing a new business model that is tuned to and working on E Business model.