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  • Essay / Dell Case Study - 826

    The first is to reduce high inventory and increase return on capital employed. Dell has reduced the warehouse in the supply chain in order to reduce costs and be more efficient, so they need to reduce high inventory. When it comes to inventory in supplier warehouses, Dell can only hold inventory for around 8-10 days, while other companies hold inventory for around 20-30 days (Christopher, 2005). This is a challenge for Dell because they have to trust all the suppliers and make the process really efficient. Another challenge is to set a common goal for all departments. In order to achieve the objective of the strategy, Dell must cooperate with all apartments and suppliers who pursue the same objective. It's really difficult because each company has its own objective and business value, that's why Dell took on the challenge of supply chain integration. Finally, the reduction of retailers and distributors also poses a serious challenge for supply chain integration. The number of Dell suppliers also decreased from 204 companies in 1992 to 30 companies in 2003 (Christopher, 2005). Because Dell wants to reduce costs on sales channel, so they have to give up some relationships with retailers, even if they have good cooperation experience, so they have to lose some trust and relationship with their channel partners, but it is also hard work for