Dell Applies Winning Formula to New Areas
The secret of Dell's success is that there is not really that much of a secret to how the company operates.The secret of Dells success is that there is not really that much of a secret to how the company operates. Through science and intuition, the execs look for market segments that have reached critical mass in terms of volume. Once a decision to jump into a segment is reached, the company turns on its combined manufacturing and customer direct model to offer customer-specific configurations at market-leading price points. As this weeks Cover Story illustrates, Dell is confident it can apply its successful formula to areas where the company has only tentatively ventured in the past. In a round of interviews at the companys headquarters, it was evident that to grow the company in a lackluster economy, the Dell model must find success in new and unproven areas. Dell execs contend they can bring the same efficiencies to the services area that they have achieved in desktops and servers. Services is one area that has long resisted innovation, and well be interested to see how Dell can restructure the services model.
How strong is the companys dedication to manufacturing efficiency? One example: During a tour of one manufacturing facility, a manufacturing exec explained at length the companys plans to shave a few more seconds off the process of taping the Dell box shut before shipping. All these saved seconds add up to about a 25 percent per year manufacturing cost reduction. Read the inside story on Dells strategy, as well as an exclusive interview with Michael Dell.