12 Order Fulfillment Along the Supply Chain

Product batch size	One	Large	Large
Med-large
Finished goods inventory	No	Yes, at retailer	Yes, at Dell	No
Lead time	Short	Long	Long	Long

Source: Based on Simchi-Levi et al. (2012) and Thomas (2012)

RESULTS

Dell’s shift to a segmented supply chain substan- tially impacted the efficiencies and effectiveness of their supply chain. Some of the major benefits included:

• 
  Improved product availability
  
• 
  Reduced order-to-delivery times
  
• 
  Fewer configurations required to meet cus- tomer demand
  
• 
  Improved forecast accuracy
  
• 
  Reduced transportation and manufacturing costs.
  

Up until 2011, these improvements served Dell’s bottom line well. In 2011 they were ranked number 2 out of the Supply Chain Top 25, in 2012 they were number 4, and in 2013 number
11. The shift in rankings was primarily a function of the declining revenues in their PC business and had little to do with the performance of their sup- ply chain. Dell’s overall business model was built on providing PC systems for businesses and con- sumers. This business has been severely impacted by the rapid increase in smartphones and tablets which has eroded the demand for PCs. It will take more than improvements in the supply chain to address the declining demand.