Dell Inc Paper Essay Example | Topics and Well Written Essays - 750 words

Dell Inc Paper - Essay Example In addition, the third party integration cost is higher than the cost of integration done by contract manufacturers. The US labors costs are higher than that of China. From the figure 6-4, it is obvious that in L5 the chassis (without motherboard) is shipped to the United States first, and subsequently the motherboards are airfreighted to the country (Simchi-Levi et al., p.184). Since the motherboard is not manufactured at the time of shipping the chassis, the company incurs additional logistics costs from airfreight. While analyzing the six of the proposed manufacturing solutions to the Dell, it is advisable for the company to manage the 3PI (3rd Party Integration) directly to improve its supply chain efficiency. When the 3PI is managed by Dell directly, the Dell management can enjoy more control over its supply chain activities, and ensure uninterrupted flow of finished products. Another major advantage of this manufacturing solution is that it would help the company trim down integration costs by employing cheap labor. In addition, this manufacturing option may assist the firm to minimize its dependence on external parties. The potential demerit of this solution is that Dell has not adequate expertise in the integration process and this issue may lead to product quality problems. If the supply chain shortage gets deteriorated, the company cannot manage the situation by simply practicing the option 4 (Dell managed 3PI). Under this circumstance, the organization must switch to the option 3A – Integration at SLC/hub. This option is relatively less complex for worldwide procurement, and therefore it may assist the company to resolve the issue. In addition, the management of supply quality engineering is minimized under this option, and hence the chipset supply is likely to improve. However, the option 3A is not very effective considering the difficulties associated with cost accounting. Finally, additional production control and