Thesis: Valuing Time in Value Chain Management

Sample Thesis Paper

While there are different attributes of Dell’s value chain management strategy that come forth as fundamental to Dell’s success, one highly imperative factor is the integration of the value of time into the system. Dell’s value chain is designed to address time in the form a variable that dictates the loss or failure of the final equation to a significant degree.

By following this model, Dell is not only able to save extensive time but is also able to bring about reductions in losses and is able to keep a closer evaluation of its products in the market. In addition, the traditional model, which is otherwise also referred to as the indirect model, also forces each component of the model to hold inventory in an attempt to fill out orders more rapidly. This would lead to the generation of extensive idle inventory volumes. Dell’s strategy ensures that there is no need for inventory holding once the product has been finished and is ready for delivery to the end user. An example of the efficiency of Dell’s model can be found in the fact that Dell’s model requires inventory holding for not more than two days under the most extreme of cases, while the traditional strategy followed by players in the same industry in the 1990s called for holding of inventory worth ninety days.

Another advantage of saving time through its unique condensation of the value chain can be found in the fact that Dell has the comfort of not having to begin the assembly of a product until payment for the product has been received. This allows Dell’s cash conversion cycle to become negative which is extensively rare for companies functioning in this industry. This is because Dell is able to acquire the payment for the order before the payment to the supplier is due.

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