dell company case study

How Dell’s strategy transformed it from a doomed player to leading the data revolution

Table of contents, here’s what you’ll learn from dell's strategy study:.

• How to sustain your company’s growth beyond its initial success.
• How a sober bet for the future fuels your conviction to win.
• How to think long-term and not sacrifice your future for short-term benefits.

Dell Technologies is a multinational technology company that designs, develops, and sells a wide range of products and services, including personal computers (PCs), servers, data storage devices, network switches, software, and cloud solutions.

The general public owns 58% of Dell Technologies, while private equity firms and institutions own the rest. Michael Dell is the founder, chairman, and current CEO.

Dell's market share and key statistics:

• Brand value of $26,5 billion
• Net Worth of $28.7 billion as of Jan 13, 2023
• Annual revenue of $105.3 billion for 2022
• Total number of employees: 133.000
• Total assets worldwide: $93 billion in 2022

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Humble beginnings: How did Dell start?

The story of every company starts with the story of its founder.

Usually, a great company has a great founder story behind it. And Dell Technologies certainly has one. Michael Dell’s story goes hand in hand with the story of the company he founded. By understanding the story of Michael, we can understand the company’s initial advantages and opportunities it pursued.

And like every great tech company story, Dell’s story starts in a college dorm room.

From stamps to startups: Michael Dell's early years and the birth of Dell

Michael Dell founded the company in college, but his entrepreneurial journey started much earlier.

He had an early interest in technology and business, and by the age of 12, he was already buying and selling stamps and coins to make extra money. As a teenager, he worked summer jobs where he learned by trial and error how demand and supply worked, how to be efficient, how to segment the market, and determine the most profitable persona to sell.

By the time he graduated from high school, he had saved up enough money to buy his own BMW and his first personal computer, an Apple and later an IBM.

But he was curious about the inner workings of these machines and, to his parents' horror, he took them apart, learning about the different components and how they worked together. He soon made a crucial discovery. IBM DIDN’T manufacture its own parts. Instead, it sourced them from other companies. This sparked an idea in Michael's mind - he could build his own PCs using the same components but at a lower cost and higher quality.

That idea didn’t come out of the blue.

Michael Dell was constantly educating himself on computers, how to build them, how they worked, and how to code. He followed all computer magazines at the time and attended every event in his neighborhood to network and learn the latest about the industry. In high school, he was already an expert, modifying his own PC and, once the word spread, customizing the PCs of professionals.

His first customers were friends and acquaintances who were impressed by his knowledge and expertise. Michael quickly realized that there was a demand for customized computers that were not available in the market. He began assembling machines with increased storage capacity and memory at a fraction of the cost of buying from big brands like IBM.

Doctors and lawyers were among his early customers, and word-of-mouth about Michael's high-quality and affordable PCs spread quickly.

He eliminated the middleman by buying components directly and assembling the machines himself, which allowed him to offer lower prices and better performance. By the end of his first year in college, Michael had a vendor's license, he was winning bids against established companies in the industry, and he incorporated his first company, “ Dell Computer Corporation .”

Dell’s direct-to-consumer strategy & how its corporate culture was formed

The company was growing frightfully fast, forcing the team to constantly change and evolve its processes.

Before the company had its second birthday, they had moved to bigger offices three times to accommodate its increased inventory, growing telephone needs, and physical or electronic systems. However, the company was still a high-risk venture and had a small capacity for expensive mistakes.

In those early days, the challenges Dell faced formed its processes and the core traits of its culture that are present to this day:

• Practicality and reduced bureaucracy. They did some things unconventionally, like having salespeople set up their own computers. That way, they gained first-hand knowledge of the technology and the customer’s pain problems (customers and salespeople were uneducated on the technology, so they shared the same problems).
• A “can-do” and “I’ll-pitch-in” attitude. Employees took substantial liberties with their “responsibilities.” Engineers would help with the overloaded manufacturing line, everyone would answer phone calls, salespeople would fulfill orders while taking new ones, etc.
• A sense of making a difference. Money was tight, so Dell employees wouldn’t mind solving secondary “needs” with cheap solutions like using cardboard boxes to throw their trash because they didn’t have trash cans.
• Direct relationships with the customers. Maybe one of the most important aspects of Dell’s culture and strategy. The company was talking at the same time with prospects and current customers on the phone. That way, it got first-hand feedback on what the market was currently asking for and was enjoying or not enjoying. That gave birth to Dell’s  “Direct Model.”

The company went to great lengths to build and maintain the direct model because it was one of its most important sources of competitive advantage. Where other companies had to guess what to build next, Dell was already on it because their customers were telling them.

There were clear advantages to the Direct model:

• Closed feedback loop. Dell was talking directly to prospects – no dealer costs – and had no need for inventory. Lower costs = lower prices = more customers. And with every new customer, Dell had another finger on the pulse of the market.
• A single salesforce. Focused solely on the end customer. There was no need to have salespeople to sell to dealers and then additional salespeople to sell to the customer.
• Specialization in sales. Dell sold to large corporations, and smaller customers, like SMBs, educational institutions, and individual consumers. But selling to these two different buyers, large corporations and SMBs, was incomparable. So, the company had different salespeople for different customer segments and thus offering the best customer support and experience.

But the model wasn’t without its disadvantages:

• The model wasn’t irreplicable. Dell was making IBM-compatible PCs and selling them directly to customers. This model wasn’t hard to replicate, and the market’s conditions favored the birth of competitors with the same model.
• Lack of credibility. It’s hard to make a $5,000 sale when the customer has never heard of you and you lack a physical store.
• Incompatibility. Dell’s PC had to be compatible with IBM’s. But they had multiple suppliers for their components and sometimes those components were incompatible. Designing high-quality machines that were outperforming and compatible with IBM’s was a challenge.

But these disadvantages didn’t stop the team. The company doubled down on customer support and service and developed a strong reputation around them. It advertised a 30-day money-back guarantee and educated its suppliers to make components based on Dell designs. They even started their first R&D attempts that gave them a  12-MHz  that was faster than IBM’s latest model, cheaper, and got them on the cover of the most prestigious magazine in the industry, the  PC Week .

Dell’s strategy was so effective that phone calls started coming in, urging them to accept capital and go public.

Only three years after the company’s birth in a college dorm room, Dell went public, raising $30 million with a market valuation of $85 million.

Key Takeaway #1: Build a coherent strategy beyond your initial differentiator to sustain growth

Most companies enjoy initial success due to an untapped opportunity in the market, from addressing a niche market to exploiting the weaknesses of major players.

But no company succeeds at growing beyond the limits of the initial opportunity if it doesn’t evolve and expand its competitive advantage. So when evaluating your next move, ask yourself:

• What is our current competitive advantage?
• How easily can our competition replicate it?
• How can we make it harder (if we can)?
• How can we expand our capabilities to strengthen our current competitive advantage?
• How can we develop new competitive advantages?
• What are the market trends and how can we adapt/take advantage of them before others?

The occasional bold move doesn’t hurt, either.

Recommended reading:   6 Competitive Analysis Frameworks: How to Leave Your Competition In the Dust

How Dell’s privatization led to a strategic triumph

In the first decade of the new millennium, the PC business was growing rapidly.

Computing power followed  Moore’s Law  and innovation cycles in hardware were less than 12 months long. At the same time, a new generation of software was spreading and the World Wide Web was expanding globally. Being a part of a growing industry, like the PC business back then, was lucrative. So naturally, many companies did well.

Dell was one of them. In 2000, the company became the world’s largest seller of PCs, having enjoyed a decade of skyrocketing sales.

However, in 2011, things changed. The PC global sales reached their peak and the next year was the first of an 8-year streak of decline that lasted until the pandemic hit.

That decline impacted Dell severely.

Navigating decline: Dell's strategy for a shrinking market

Dell was in deep trouble at the start of the previous decade:

• It had lost its position as a top PC seller in the US to its main competitor, HP.
• It came third in the global PC market share, behind HP and ACER.

Many believed that it was a dying company that would perish like Kodak or Motorola.

The PC market was shrinking and some experts were saying it was the beginning of its end. Dell was expected to be among the first casualties. The truth was that the PC industry wasn’t dying, but it was evolving – it was losing some of its traits and gaining new ones. The difference is subtle but also key. In a competitive arena, every alert player is aware of the market changes: declining sales, emerging trends, and other important facts. But how each player interprets them determines whether they’ll  formulate a winning strategy  or not.

The more substantial the changes, the more important the interpretation.

In 2012, the fact was that the PC business was declining. Every major player could see it with a single glance at their balance sheet. In Dell's case, the decline was even direr since its PC sales were down by double digits. The company desperately needed to turn things around. And only a bold strategic move could do that.

The company tried to bounce back up with some obvious but desperate moves:

• The introduction of the Streak “phablet.” An embarrassing attempt at creating a new product category between tablets and smartphones. Its design was bulky and its Android software unsuitable for the device, while its purpose was unclear to the consumer.
• Making Windows 8 its default operating system. Dell and Microsoft have been longtime partners, to the benefit of both companies. Unfortunately, their growing interdependence meant that when one failed, it dragged the other one down. Windows 8 failure dragged down Dell and further decreased its PC market share.
• Attempts to enter the tablet and smartphone markets: the “Venue” debacle. Dell was always viewed as a PC company, not a technology company, making it harder to expand to new categories. Its first smartphone, the  Venue , ran on Windows Mobile and it never got any traction. As a result, the company abandoned the categories and, even today, it has less than negligible presence in these markets.

But where people saw a vulnerable company, Michael Dell saw an opportunity.

He had an assumption, a vision attached to it, and a plan to make it a reality. But he had no way to execute it with the company’s organizational structure at the time.

The obstacles to implementing Dell's competitive strategy

Dell’s strategy was to go on the offensive. He wanted the company to be highly aggressive by:

• Becoming competitive in the PC business again.
• Expanding its services and software solutions.
• Increasing its sales capacity.

Dell aimed to achieve these goals by investing heavily in R&D, gaining tighter control over its PC and server prices, and expanding its sales workforce. The idea was to fund new business capabilities in the software and services space from Dell's PC segment. That was a bold plan that involved a lot of changes and, thus, a lot of risks.

Dell’s strategy was essentially a  business transformation  proposal.

And although a lot of public companies have successfully gone through a transformation, none did it in such a short period of time without sacrificing the short-term faith of its shareholders. And that was exactly the problem.

The strategy was inherently risky – like every  good strategy  is – as it promised capital expenditure and an immediate decrease in profitability due to increased operating expenses. Things shareholders hate. And if shareholders aren’t happy with the company’s near-term returns, they start selling their shares, and the company loses its value and a good portion of its funding capabilities. 

Short-term risk = lower share prices = less funding for the company

Thus, the strategy was impossible to execute without the support of the shareholders. So the company had only two options: gain the support of the shareholders or go private.

Dell chose to go private.

Dell's game-changing decision was based on a strategic bet

For a gigantic public company with a market cap of nearly $20 billion, going private is a tough decision and a complicated process.

But it was an unavoidable preliminary for the successful execution of Michael Dell’s plan. And the first step was to convince the board of the necessity of the transformation. After announcing his idea, the board started discussions with experts to evaluate the move, i.e. top consulting agencies and other independent third parties.

JP Morgan , Boston Consulting Group, Evercore, and Debevoise were some of the names involved. And they all shared the same view:

• The PC is dying.
• Funding a business transformation from a declining business is a bad idea (despite such successful attempts from  IBM  and  BMW  in the past).

The experts had a lot of facts and strong arguments to support their case. However, all of them were based on a single assumption:  tablets and smartphones will replace the dying PC . The growth in those categories would entail a decline in the PC business. They believed the PC was about to be cannibalized.

Dell’s CEO disagreed. What was his assumption?

He believed that tablets and smartphones wouldn’t take away from PCs but rather add to it. He believed that the PC’s central role in productivity and business wasn’t going to be dethroned by the new shiny toys. People would buy and use tablets and smartphones, but PCs would remain their primary productivity tool.

And he would bet Dell’s future on it.

But he had to convince the board of directors first. At the start, conversations were happening in secret and things were moving slowly but steadily. But when the idea was leaked, two new problems presented themselves.

The first was Carl Icahn, who contested for the ownership of Dell.  Carl Icahn is a self-proclaimed “activist investor” but others call him a “corporate raider.” The closer the go-private initiative was to happen, the more Carl Icahn fought for it. And he used every improper tool and method he could muster. The battle that followed between Carl and Michael delayed the deal and almost derailed it.

The second was Dell’s customers’ hesitation in doing business with the company.  The rumors about the go-private initiative left the customers wondering about the future of Dell and doubted whether any kind of investment in it was worth it. They were suspending purchases and all Dell’s leadership could say was, “We don’t comment on rumors and speculations.”

The press had also concluded that the go-private initiative was a declaration of Michael Dell’s incompetence and a desperate attempt to keep Wall Street’s eyes away from its demise.

History would prove them wrong and crown Michael Dell victorious.

A new chapter: How Dell's go-private move set the stage for future success

The deal happened.

In February 2013, Michael Dell and the investment firm of Silver Lake took Dell private in a leveraged buyout of $24.4 billion, at $13.65 a share.

Despite all the time that passed until Dell could fully execute its strategy, the company didn’t remain idle. It had made several calculated moves to significantly reduce its dependence on the declining PC market before the deal conversations ever happened.

From 2007 to 2012, Dell spent north of $12.40 billion in key acquisitions to increase its enterprise software and hardware solutions, including cloud data storage and management. The acquisitions focused on areas like:

• Data storage
• Systems management
• Data management in healthcare
• Cutting edge software

The company had already started severing the connection between its financial health and its PC market share many years ahead of its privatization.

But after the buyout, it went all in. Speed and agility became its prominent advantages. Dell became, nearly overnight, a hungry, quick, and ready-to-attack-its-prey jackal. Whenever a new opportunity arose and people asked for resources to pursue it, leadership committed double the resources and said, "Go faster!"

For example, SMBs (small and medium businesses) presented a gigantic opportunity. So the company increased its sales workforce, retrained its existing salespeople, and hit endless SMB doors. They would enter a business selling their low-margin PCs and simultaneously become their trusted advisor on all things tech. Then they sold their whole portfolio of solutions.

And the morale of employees was off the charts. Leadership kept their promises on the changes and provided all the support their people needed to execute the plan.

In addition, people started viewing PC and smartphones as complementary, just as Dell expected.

Was Michael Dell’s bet a good one? Well…

45% of Dell’s revenue was generated from PC sales, but 80% or more of its profits were generated by its new solutions. Eight years after the privatization, the value of their equity had increased more than 625% and their enterprise value reached $100 billion.

We’re pretty confident that’s a yes.

Key Takeaway #2: Successful strategic bets require a sober conviction

Markets change and evolve all the time. The difference between players that emerge prosperous and those that struggle to fit in the new order of things isn’t the unique access to data.

No. Every alert player in your competitive zone has more or less the same access to market trends and changes. The difference lies in what you envision the future to be. That’s your bet.

That’s what a winning corporate strategy needs. And because bets are inherently risky, you require two things to place a successful bet:

• Sobriety to envision what the future of your industry will look like.
• Conviction to pursue that vision relentlessly.

Steering towards success: Dell's current strategy and the EMC merger

Michael Dell had foreseen the evolution of the technology industry since the 2000s.

Not the specifics, but the trend of PCs and hardware becoming less relevant – or at least less profitable – and software, the cloud, and back-end taking the front seat. He realized (from very early on) that servers and storage management would become a huge concern for large enterprises building (or upgrading) their IT infrastructure.

Dell anticipated the market’s needs by making a simple observation: the quantity of data in the world expanded exponentially and the traditional way of data management would require server performance that wasn’t physically possible to achieve. But he knew there was a solution underway: virtualization – software that mimics the computer, creating virtual mainframes within the physical mainframe.

That’s why the company had started investing in these technologies since 2001.

Achieving synergy: Dell's competitive strategy and the merger with EMC and VMware

Dell, EMC, and VMware are three major players in the technology industry with distinct but complementary offerings.

EMC  had a successful product in networked information storage systems, i.e. a database management system for enterprises.

VMware  was pioneering in virtualization, allowing users to run multiple operating systems on the same device.

Dell  had an established distribution network and a series of back-end solutions that could expand and fit well with the former technologies.

The relationship between these three companies started in 2001. Dell and EMC entered a strategic alliance to rule a market of $100 billion worth by 2005.

For EMC, the alliance was a one-stone-three-birds initiative.  First,  it offered a lucrative distribution channel to customers their competitors were already targeting.  Second,  it ensured Dell wouldn’t partner with a competitor.  And third,  it reduced its supply costs for components.

For Dell, it also had a threefold benefit.  First,  It added high-performing products to a rapidly growing business.  Second,  it gave it an important customer – EMC was using Dell’s servers.  And third,  it allowed Dell to infiltrate deeper into enterprise data centers.

A strategic alliance that gave both Dell and EMC a competitive edge.

Then EMC bought VMware. That gave the company massive capabilities around cloud infrastructure services ending up being a very lucrative move. Dell, which had invested in VMware back in 2002, saw a massive opportunity to acquire the new EMC.

So Dell and EMC first began discussions of a potential partnership back in 2008, but the idea was ultimately shelved due to the financial crisis. However, in 2014, Dell revisited the idea as both companies had grown and become leaders in their respective industries.

Dell saw the potential for a merger as the two companies' services would bring significant value to their customers when combined. EMC's CEO, Joe Tucci, agreed with this assessment, but they still had to convince EMC's board. EMC was publicly held while Dell was private, and as soon as the idea was on the table, Dell found itself competing with two other interested parties, Cisco Systems and HP. In fact, HP nearly succeeded in acquiring EMC.

It failed due to a financial disagreement. So Dell jumped on the opportunity.

By then, EMC had grown tremendously and had eliminated any short- to mid-term potential start-up disruptors by acquiring them. EMC’s three businesses were uniquely complementary to Dell’s solutions:

• EMC Information structure , a leader in the data storage system market.
• VMware , the undisputed leader in virtualization.
• Pivotal , a start-up with a platform to develop cloud software.

However, the acquisition was a tough process. EMC had grown to a market cap of over $60 billion. It was impossible for Dell to fund an acquisition. Instead, the two companies merged.

The merger happened through a complex but effective financial plan, and the synergies created by the combined company increased revenue significantly. A year after the merger was initiated, the added revenue was well above expectations. This allowed Dell to pay down a significant portion of its debt and improve its financial standing and investment rating. The success of the merger led the company to simplify its structure and align the interests of the stakeholders of the three companies.

In 2018, Dell went public again as a very different entity than its first IPO, uniquely equipped to lead the 5-S sectors:  services, software, storage, servers, and security.

What is Dell’s business strategy’s primary focus today?

Dell aspires to become a leading player in the data era by providing a wide range of solutions, products, and services.

Excluding VMware, Dell is divided into two main business segments supported by its financial subsidiary:

• The Infrastructure Solutions Group ISG helps customers with their  digital transformation  by providing multi-cloud and big data solutions that are built on modern data center infrastructure. These solutions are designed to work in multi-cloud environments and can handle workloads in public and private clouds as well as on-premise.
• The Client Solutions Group CSG focuses on providing solutions for clients such as laptops, desktops, and other end-user devices. ‍
• Dell Financial Services DFS supports Dell businesses by providing financial options and services to customers according to the company’s flexible consumption models. Through DFS, the company tries to tailor its financial options to each customer’s way of consuming Dell’s solutions.

Dell's core offerings include servers, storage solutions, virtualization software, and networking solutions. The company is constantly investing in research and development, sales and other key areas to improve its products and solutions and to drive long-term growth.

Its primary strategic priorities are:

• Improving and modernizing its current offerings in the markets it operates in.
• Expanding into new growth areas such as Edge computing, telecommunications, data management, and as-a-service consumption models.

And its plan involves several key  initiatives :

• Developing its flexible consumption models and as-a-Service options to customers to meet their financial needs and expectations.
• Building momentum in recurring revenue streams through multi-year agreements.
• Investing in R&D to develop scalable technology solutions and incorporating AI and machine-learning technology. Since its Fiscal year 2020, the R&D budget is consistently at least $2.5 billion. Most of it goes towards developing the software that powers its solutions.
• Collaborating with a global network of technology companies for product development and integration of new technologies.
• Investing in early-stage, privately-held companies through Dell Technologies Capital.

Although Dell has a coherent strategy to achieve its objectives, competition isn’t idle nor trivial in the core competitive arenas. The company faces a significant risk that includes:

• Failure to achieve intended benefits regarding the VMware spin-off.
• Competition providing products and services that are cheaper and perform better.
• Delays in products, components, or software deliveries from single-source or limited-source suppliers.
• Inability to effectively execute its  business strategy  (transitioning sales capabilities, expanding solutions capabilities through acquisitions, etc.) and implement its cost efficiency measures.

The technological advances are rapid, and players are in a constant race to innovate not only on the technologies they provide but on their business models and all of their services and solutions. Emerging players and strategic relationships between competitors could easily shift the competitive landscape before the company finds a way to react.

Key Takeaway #3: When making transformational decisions, prioritize thinking long-term

A major acquisition, or a merger, between industry leaders is a bet on the industry’s future.

If you believe in the bet long-term, don’t sacrifice a good move for short-term returns, as HP did with EMC. Instead, do your due diligence in the consideration phase:

• Consider real alternatives.
• Understand deeply how the capabilities of both companies will be improved.
• Validate your assumptions with current market needs and trends.
• Move faster than the competition.

Why is Dell so successful?

One of the key reasons Dell has been so successful is Michael Dell’s intuition and strategic instinct.

He demonstrated a consistent ability to take an accurate pulse of the market, make a winning bet and chase it relentlessly by performing a business transformation. Additionally, Dell never lost one of its core strategic strengths: building strong relationships with its customers by providing excellent customer support and tailored solutions to meet their unique needs. The company has also been successful in streamlining its  operations  and supply chain, which has allowed it to offer competitive prices and high-quality products.

Dell puts the customer first and makes strategic pivots with perfect timing.

How Dell’s vision guides its steps

According to Dell’s annual report, its vision is:

“To become the most essential technology company for the data era. We seek to address our customers’ evolving needs and their broader digital

transformation objectives as they embrace today’s hybrid multi-cloud environment.”

And their two strategic priorities, growing core offerings and pursuing new opportunities, are their roadmap to achieving it.

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The Dell Deal Explained: What a Successful Turnaround Looks Like

• Walter Frick

A case study of IBM in the 1990s points to what Dell must do to succeed.

You’re CEO of a once great company, now beleaguered on all sides by competitors and a rapidly changing industry. How do you get back on top?

• Walter Frick is a contributing editor at Harvard Business Review , where he was formerly a senior editor and deputy editor of HBR.org. He is the founder of Nonrival , a newsletter where readers make crowdsourced predictions about economics and business. He has been an executive editor at Quartz as well as a Knight Visiting Fellow at Harvard’s Nieman Foundation for Journalism and an Assembly Fellow at Harvard’s Berkman Klein Center for Internet & Society. He has also written for The Atlantic , MIT Technology Review , The Boston Globe , and the BBC, among other publications.

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Dell: The Business Case for a Sustainable Supply Chain

Executive Summary > Introduction > The World’s Largest Electronics Takeback Programme > Closed-Loop Recycled Plastic Supply Chain > Challenges in Transitioning to a Closed-Loop Recycling System > Natural Capital Accounting > Prognosis >

Executive Summary

Business Background

Dell is one of the world’s largest computer manufacturers and technology companies. It became a private company in 2013 through an acquisition by Silver Lake Partners, a private equity firm, and Michael Dell, the founder and CEO of Dell. Dell offers a wide range of IT hardware, software products and services. [1] Its clients include numerous governments, large enterprises, small businesses and consumer markets. Dell also markets third-party software and hardware. In particular, Dell is known for its direct sales and customisation model, as well as for its innovative supply chain management.

Ecosystem Pain Point

E-waste is the world’s fastest-growing waste stream, with a relatively low recycling rate overall (approximately 15% globally). [2] Rapid technology innovation and ever-shortening product lifespans contribute to the increase of e- waste. Of the components that comprise e-waste, gold, copper and plastic content dominate the material value of e-waste material. [3] Plastic, in particular, is overabundant in landfills.

Responsible e-waste disposal is important from an environmental perspective, but it also makes good business sense. It harnesses “untapped potential to create a more efficient and sustainable product ecosystem” and reduces dependence on fossil fuels, which have fluctuating prices. [4]

One of the solutions to e-waste disposal is to gather and use recycled plastic in products. Although recyclers have made technical progress in recent years, it remains challenging for companies to source a sufficient supply of high-quality postconsumer recycled plastic that meets the technical, economic and aesthetic requirements of ICT product manufacturers

Business Strategy

Dell has taken a full lifecycle approach to change its production, use and disposal of plastic. The company’s product design, in particular, emphasises the ease of repair and recyclability from the start. Dell also continuously looks for ways to incorporate sustainable materials, such as recycled plastic, into products and packaging. Dell’s Global Takeback programme makes it easier for customers to dispose of old electronics. For products beyond repair or reuse, Dell offers free recycling for consumers, as well as convenient, secure and compliant solutions for larger customers.

Performance

The Dell Recycling programme has recovered 1.76 billion pounds of electronics since 2007. Since mid-2014, the programme’s closed-loop recycled plastic supply chain has used plastics recovered from recycled computers to create nearly 5,000 tonnes of new parts for more than 90 products across millions of units. Through collaboration with TruCost, Dell has taken a multi-capital approach to quantify the natural capital benefits of the closed-loop model. It has also explored the possibility of measuring the social impact associated with this approach. This collaborative work identified financial and environmental savings.

The next step for Dell is to scale the programme and to recycle a larger number of different materials through the programme. As Dell looks to the future, expanding collection capacity in developing countries represents a new front.

____________

[1] “Dell Inc. at a Glance,” Company Profile, Vault.com. Link . [2] GreenBiz, GreenBiz Group Inc . Link . [3] C.P. Baldé et al., “The global e-waste monitor,” United Nations University , 2015. Link . [4] Anya Khalamayzer, “How Samsung, Dell are reinventing IT products,” GreenBiz , 9 December 2016. Link .

Introduction

About the Company

Dell is one of the world’s largest computer manufacturers and technology companies. The company sells a wide range of IT hardware, software products and services for enterprise, government, small business and consumer markets. [5]

As a privately held company, Dell has the freedom to pursue a longer time horizon and to commit to changing its company resource use. The principle of efficiency is central to the Dell business model and informs the company’s approach to resources, sourcing and waste management. In particular, Dell is also known for its innovative supply chain management.

Dell’s commitment to efficiency has prompted the company to take on the timely challenge of disposing of e-waste. This case study outlines Dell’s contribution to responsible e-waste disposal through the use of circular economy and closed-loop ecosystems. Attempts to develop a sustainable supply chain represents one key initiative, among others, to maximise efficiency for Dell and its customers.

E-waste, discarded electrical and electronic equipment, is the world’s fastest-growing waste stream. [6] Rapid technology innovation and ever-shortening product lifespans contribute to the increase of e-waste. [7] If e-waste continues to proliferate at current rates, experts caution that the problem will worsen in the future. According to a United Nations University report, the amount of global e-waste reached 41.8 million tonnes in 2014, and the total amount of global e-waste may hit 50 million tonnes in 2017, the report warns. [8] To compound matters, e-waste has a low overall recycling rate, which means that unwanted equipment remains unused.

Responsible e-waste disposal is not only important from an environmental perspective, but also makes good economic sense. [9] As an example, the material value of global e-waste was estimated to be 48 billion Euros in 2014 alone. [10] Leveraging this underutilised resource opens up vast “untapped potential to create a more sustainable, efficient product ecosystem.” [11]

The circular economy takes the traditional, linear model of “take, make and dispose” — which moves products from design to factory to consumer to landfill — and bends it into a more efficient closed-loop ecosystem. [12] Unwanted, used electronics can be taken back for refurbishment and then resold on the secondary market. Products beyond repair, or those that are no longer economical to repair, are recycled to allow for precious and scarce materials to be recovered. Recycled content can either be incorporated into the design and manufacturing of new products or sold out to the market for others to use.

Research shows that approximately 30% of consumers have technology products lying around the house unused, and half of consumers are unsure of what to do with their old electronics. [13] According to Dell, similar situations exist with businesses warehousing old equipment.

Takeback options make it easy for a wide variety of customers to dispose of their old electronic products in a responsible manner. This measure ensures that unwanted electronics get reused or, if at the end of life, properly recycled.

Plastic is one of the most useful and important materials in modern society. It is popular in computers due to its durability, ease of fabrication into complex shapes and electrical insulation qualities. [14] However, plastic recycling remains challenging and, as a result, the material constitutes a major contributor to landfills. The production of plastic also uses a substantial amount of fossil fuels. Manufacturing plastics from fuel is resource intensive, requires large amounts of energy and releases relatively high levels of CO2 emissions in the process. Recent research has shown that our current use of plastics will become unsustainable if we do not take steps to improve recycling and reduce plastics’ usage.

Using secondary, recycled plastic as feedstock for new computers presents one possible solution. With the fast pace of innovation and product upgrades in the ICT sector, recycled content can reduce the environmental toll of manufacturing with virgin materials. The circular economy and the development of secondary raw material markets are high on the European agenda. Nevertheless, it remains challenging to find a sufficient supply of high-quality postconsumer recycled plastics that meets the technical, economic and aesthetic requirements of ICT products manufacturers. [15]

In response, Dell is taking steps towards creating a “circular” supply chain. Increased volatility in commodities and growing pressure on resources have alerted Dell to the necessity of rethinking materials and energy use. [16] In 2013, Dell committed to putting a total of 50 million pounds of recycled materials back into its products by 2020. The company reached this goal in the beginning of 2017 and is continuing to scale its efforts.

For Dell, sourcing postconsumer recycled plastics from the market and building a new, stable closed-loop supply chain for plastics from used electronics collected through takeback programmes present viable and affordable alternatives to using virgin materials. Rather than focusing exclusively on individual challenges, Dell has taken steps to approach their supply chain from a broader, systemic perspective. Jennifer Allison, Director of Supply Chain Sustainability at Dell, summarises the company’s current business strategy:

We’re talking about systems — not just products, programmes or initiatives. Looking at the whole system is when change begins to make a significant difference. Technology is a great tool for measuring and analysing systems, understanding processes and identifying inefficiencies.[17]

In this way, Dell takes a whole ecosystem view of its product lifecycles. This approach is transforming the design of products and services. Dell’s lifecycle approach aims to keep viable products and parts in circulation for longer periods of time. It also harnesses global efforts to reuse, refurbish and resell products and parts to extend their lifetimes and to recycle them at end of life.

Product design emphasises ease of repair and recyclability from the beginning. Dell also looks continuously for ways to incorporate sustainable materials, such as recycled plastic and reclaimed carbon fiber, into products and packaging. [18]

[5] “Dell Inc. at a Glance,” Company Profile, Vault.com.   Link . [6] Center for Security Studies. Link . [7] C.P. Baldé et al. [8] James Rubin. “E-Waste: The circular economy’s achilles heel,” edie newsroom , 26 June 2015. Link . [9] Irene Kitsara, “E-Waste and Innovation: Unlocking Hidden Value,” Wipo Magazine , June 2014. Link . [10] C.P. Baldé et al. [11] Anya Khalamayzer. [12] GreenBiz, GreenBiz Group Inc. [13] “Switched on to Value,” WRAP Report , November 2014. Link . [14] “Plastics: Key Materials for Innovation and Productivity in Major Appliances,” American Plastics Council. Link . [15] “Best Practices in Recycled Plastic,” DigitalEurope , August 2016. Link . [16] “Best Practices in Recycled Plastic,” DigitalEurope. [17] Lisa Arnseth, “Full Circle,” Institute for Supply Management , October 2016. Link . [18] “Dell on the Circular Economy,” March 2016. Link .

The World’s Largest Electronics Takeback Programme

Dell has the world’s largest electronics takeback programme, which spans across 83 countries and territories. The programme has recovered approximately 800,000 tonnes of electronics since 2008. For commercial customers, Dell offers a full-spectrum of logistics and disposal capabilities via the Asset Resale and Recycling Service. Current capabilities include data security, on-site shredding, recycling and full traceability reporting. Dell also makes it easy for individual consumers to recycle by partnering with freight companies to provide free mail-back recycling of Dell-branded equipment. In many countries, the programme will even pick up used equipment from a customer’s home. [19]

Another programme designed to make the recovery of obsolete electronics easier and more accessible is the Dell Reconnect Partnership with Goodwill, a not-for-profit organisation committed to helping people become independent through education and training. The Reconnect Programme allows people to drop off any brand of used electronics to more than 2,000 Goodwill locations across the United States. Dell Reconnect accepts any brand of computer equipment in any condition from consumers and provides free recycling services. [20]

Dell returns all proceeds to Goodwill in order to help support Goodwill’s mission of putting people to work. [21] By participating in this initiative, customers simultaneously help protect the environment, benefit the community and receive a receipt for tax purposes. In this way, the programme helps both the costumers and the business.

The donated equipment has value as a whole system, as parts and sometimes as raw materials such as metals, plastics and glass. [22] If the equipment can be refurbished, Goodwill sells it. If not, the end-of-life product is sent to Wistron, one of Dell’s recycling partners, for asset recovery in the United States. Metals such as tin, gold and tungsten are re-sold in the commodities market. To complete the closed loop, plastics are sorted and shipped to China, turned into pellets and mixed with virgin plastics for use in new Dell products. [23]

[19] “Dell Recycling,” Dell Inc. . Link . [20] GreenBiz, GreenBiz Group Inc. [21] ‘About Us,” Goodwill Industries International, Inc. . Link . [22] Dell Reconnect – How It Works,” Dell Inc. . Link . [23] Mike Hower, “Dell cuts e-waste with recycled carbon fiber,” GreenBiz , 23 October 2015. Link .

Closed-Loop Recycled Plastic Supply Chain

Dell’s 2020 “Legacy of Good” sustainability plan set the goal of incorporating 50 million pounds of post-consumer recycled-content plastics and other sustainable materials into Dell products by 2020. [24] Dell met this target ahead of schedule in early 2017.

In 2014, Dell launched its closed-loop recycled plastics supply chain to accelerate progress against their goal of using 50 million pounds of sustainable materials. Since then, the company has used more than 10.5 million pounds of closed-loop plastics in new products. As a result, Dell now offers over 90 products made with closed-loop recycled plastics. These products include flat panel monitors, desktops and all-in-one computers.

Run in conjunction with various supply chain partners, the programme consists of collecting, recycling and using e- waste to make new Dell products. [25] It begins with sorting plastics out of the various takeback streams, further processing them and then sending them to a manufacturing partner in Asia. The plastics are then melted down and moulded into new parts and computer components, thereby creating a closed-loop system. [26] The whole process – from the time the equipment is received for recycling to the time the plastics are back in a customer’s hands as part of a new product – takes just under six months.

The closed-loop system also provides businesses with a price more stable than the cost of virgin materials, which fluctuates with the price of oil. It also reduces the company’s dependence on environmentally costly virgin materials. Furthermore, by reusing plastics already in circulation, Dell cuts down on e-waste, reduces carbon emissions and helps drive a circular economy for IT. The closed-loop process yields an 11% lower carbon footprint as compared to using virgin materials. [27] The closed-loop plastics supply chain delivers products that are better for the environment, which is increasingly what Dell customers demand. [28]

Dell’s leadership in recovering and reusing plastic from used computers constitutes an integral step in transitioning the larger electronics industry toward a circular economy. Louise Koch, Corporate Sustainability Lead in EMEA for Dell, describes the impetus for initiating a closed-loop system:

Dell’s programme is driven by both an effort to improve efficiency – a principle that goes back to its founding ethos and business model – as well as a commitment to reducing environmental impact. [29]

The use of closed-loop plastics may create a demand for plastic from used computers and thereby increase the level of plastic recycling from electronics. This, in turn, generates new jobs and opportunities for those in the nascent industry, all while staying true to Dell’s founding principles.

[24] “Best Practices in Recycled Plastic,” DigitalEurope . [25] Mike Hower. [26] Lisa Arnseth. [27] “Dell 2020 Legacy of Good Plan,” Dell Inc. , Link . [28] “Dell’s Closed- loop recycling process,” Dell Inc . Link . [29] Louise Koch (Corporate Sustainability Lead for Europe, Middle East and Africa), personal communication.

Challenges in Transitioning to a Closed-Loop Recycling System

In transitioning from a “take-make-dispose” linear supply chain to a circular supply chain, Dell has had to overcome a number of hurdles. It continues to experience four key challenges in the following areas:

Supply-side

Regulation and geographic

Demonstrating benefits to costumers

Technical Challenges

One of the biggest challenges that Dell faced with the closed-loop recycling was identifying which types of plastic can be incorporated back into new products. As Scott O’Connell, Director of Environmental Affairs for Dell, puts it, “When dealing with plastics, getting the properties equivalent or better to virgin materials isn’t easy…But this is a challenge we’ve been able to overcome with engineering know-how.” [30] Dell worked with partners to test different approaches. Testing revealed that, due to mechanical and aesthetic considerations, the blend of recycled-content with virgin plastic produces the best outcomes.

Supply-side Challenges

Another challenge involves establishing a reliable closed-loop supply chain. As O’Connell describes, “We had to make sure that we had sufficient volume of product coming in to be able to yield enough plastics to put into a mainstream Dell product.” [31] Supply of products and plastic derives from Dell’s own sources, which adds a greater degree of insight and security. However, for the closed-loop recycling to work and scale, Dell needs a security of supply, which can be difficult to attain with fluctuating numbers of products collected through takeback. Shrinking form factors—the fact that there is less plastic per item recycled as electronics become smaller—further complicates the situation. Hence, Dell needs to continue to drive increasing participation in takeback programmes, while at the same time exploring other means of acquiring recycled-content materials.

Regulation and Geographical Challenges

Transporting materials poses an additional challenge. Dell customers are all over the world, which means takeback initiatives must accommodate the global scale. Materials need to be collected in sufficiently dense amounts to make shipping to a centralised processor worth the economic and environmental costs. This involves logistics, regulations and other considerations. In Europe, for example, closed-border regulation inhibits transportation of electronic waste and, at present, makes it unfeasible for Dell to set up a branch of their closed-loop supply chain there.

Demonstrating the Benefits to Customers

The final challenge for Dell is to demonstrate the benefits of closed-loop recycling to customers. Ultimately, these products look and perform identically to those made from virgin materials. Dell must communicate the value proposition to customers by highlighting the amount of recycled content in the final product, the closed-loop nature of the materials and the benefits to the customers’ own sustainability goals.

Performance Global Takeback and Closed-Loop Recycling Programme

Since 2008, Dell has taken back more than 1.76 billion pounds (nearly 800 million kg) of used electronics and, since mid-2014, when Dell launched the closed-loop plastic recycling programme, it has created nearly 5,000 tonnes of plastics from recycled computer parts. Dell has saved more than USD 1 million from this process, and the carbon footprint of circular plastics is 11% smaller as compared to the manufacture of virgin plastics. Dell now uses circular plastics in approximately 90 products across millions of units globally.

[30] Scott O’Connell (Dell, Director of Environmental Affairs), interviewed by Mike Hower, “Dell cuts e-waste with recycled carbon fiber,” GreenBiz , 23 October 2015. Link . [31] Ibid.

Natural Capital Accounting

Together with TruCost, Dell has done an evaluation to understand the gains from moving away from virgin plastics. One of the most useful ways for companies to account for these risks is to quantify the environmental impacts generated by their activities—internal operations, upstream supply chain and downstream product use and disposal—and then convert those impacts into monetary values. [32] The monetary value helps identify the value not captured in traditional financial markets and incorporates these considerations into decision-making. [33]

Dell quantified the greenhouse gas emissions savings derived from using closed-loop plastic and expanded it in the following ways:

Measured the net benefit for environmental impacts of the closed-loop plastic, compared to traditional plastic.

Valued the environmental net benefit in terms of natural capital—the stock of natural resources that makes human life possible and upon which businesses rely to produce goods and services.

Scaled these benefits to larger applications, including utilising closed-loop plastic across many of Dell’s product lines.

Prepared a framework for incorporating social and financial impacts into the net benefit valuation in the future. [34]

The evaluation demonstrated the environmental benefits of closed-loop recycled plastic usage. Findings showed that “Dell’s closed-loop plastic has a 44% (USD 1.3 million annually) greater environmental benefit compared to virgin ABS plastic.” [35] In particular, increased computer recycling lessened environmental impacts. The research found that recovering and recycling the used plastics from computers minimised “human health and ecotoxicity impacts” and reduced the overall “emission of hazardous substances.” [36]

In addition to quantifying the environmental benefits of closed-loop recycling systems, Dell has also begun to incorporate social impact metrics into its valuation framework. [37] Emergent strategies such as analysing activities for their use of social and human capital, will likely present an area for further refinement and application in the future. [38] At present, Dell is combining both environmental and social impact metrics into its process in order to help tackle the challenge of responsible e-waste disposal.

[32] Dell, Dell Inc. . Link . [33] Ibid. [34] Ibid. [35] “Valuing the net benefit of Dell’s more sustainable plastic use at an industry-wide scale,” Trucost , September 2015. Link . [36] “Valuing the net benefit of Dell’s more sustainable plastic use at an industry-wide scale,” Trucost , September 2015. Link . [37] Ibid. [38] Ibid.

On a global scale, there is still huge potential to scale up circular resource streams in the IT sector and beyond. Only 10% of the plastics produced today are recovered – and more than 50% end up in landfills.

Dell has increased the use of recycled materials (both closed-loop and traditional postconsumer recycled plastics) in new products and Dell plans to continue to scale the programme.

As Dell continues to scale the current programme, it will look to expand into reclaiming and reusing other materials. Dell has already had success with using reclaimed carbon fiber for products and are currently using recycled ocean plastics for packaging.

Dell will also look at how ocean plastics or other solutions can be used with products.

Dell will continue to measure social impact using the same methodology, updating models for collection totals to follow form-factor trends. It will report progress annually, building on this total toward a cumulative 2 billion pounds by 2020. [39]

Dell continues to lead conversations with governments and industry partners about recycling and circular loops on a global scale. Dell is open to innovative collaborations with even more customers, partners and governments in the coming years. Dell sees particular opportunities in creating partnerships in developing countries to strengthen this ecosystem.

Dell’s takeback programme presents a compelling example of the potential of circular economy and closed-loop systems to contribute to responsible, mutual business practices. Looking towards the future, creating closed-loop recycling programmes in developing countries represents a new frontier. Recycling products in the countries from which they are recovered brings skilled jobs, creates industry and strengthens the local economy. [40] Using its proven abilities to leverage partnerships and government relationships to create the infrastructure needed for new programmes, Dell can continue driving a culture of recycling in communities around the world. [41] As Dell’s programme example highlights, collaborative approaches have the potential to create both financial and environmental savings for corporations and costumers on the global scale.

[39] “Dell 2020 Legacy of Good Plan,” Dell Inc. , Link . [40] Ibid. [41] Ibid.

PDF Version

Available to download.

About This Case Study

First developed for the 2017 Forum by the Mutuality in Business Research Team. The web text is based on the case study written by researchers at Saïd Business School, University of Oxford . The views of the authors and/or the University are distinct from other content on this website.

Based on research by the Mutuality in Business Research Team, Saïd Business School. With contributions from Louise Koch, Dell and Stephen Roberts, Dell. Edited by Justine Esta Ellis.

Authors’ Note

This is a descriptive case study, based on publicly available materials as well as on the information shared by the company described. This case study is not meant to provide critical analysis of the literature or information used to develop it. All errors and omissions are the authors’ own.

About This Series

The businesses featured in these case studies share a commitment to objectives beyond purely financial performance, as well as a serious intent to implement mutual practices through new forms of ownership, governance, leadership, measurement and management.

Please note: The header photograph is illustrative and does not directly portray the subject matter. Some editorial changes have occurred during the process of converting the paper from the PDF version above into this web page version.

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24 Dell: The Business Case for a Sustainable Supply Chain

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The computer manufacturer Dell runs the world’s largest electronics take-back programme. It has recovered more than 800,000 tonnes of electronics since 2008. In the case of individual consumers it partners with freight companies in retrieving equipment from consumers’ homes and partners with Goodwill, a not-for-profit organization that seeks to make people independent through education and training, in running 2,000 locations across the United States where consumers can drop off any brand of used electronics. The article points to the commercial as well as the environmental savings resulting from the recycling programme and describes the process by which Dell has been able to achieve this.

Introduction

Dell is one of the world’s largest computer manufacturers and technology companies. The company sells a wide range of IT hardware, software products, and services for enterprise, government, small business, and consumer markets. 1 As a privately held company, Dell has the freedom to pursue a longer time horizon and to commit to changing how it uses its resources. The principle of efficiency is central to the Dell business model and informs the company’s approach to resources, sourcing, and waste management.

Pain Points in the Ecosystem

Dell’s commitment to efficiency has prompted the company to take on the timely challenge of improving e-waste disposal throughout its business.

E-waste, that is, discarded electrical and electronic equipment, is the world’s fastest-growing waste stream. 2 Rapid technology innovation and ever-shortening product lifespans are contributing to the increase of e-waste. 3 According to a United Nations’ University report, the amount of global e-waste reached 41.8 million tonnes in 2014. 4 To compound matters, e-waste has a low overall recycling rate, which means that unwanted equipment remains unused.

Responsible e-waste disposal is not only important from an environmental perspective, but also makes good economic sense. 5 Vast amounts of gold, for example, exit the economy due to low recycling rates, but increasingly there is an opportunity to recapture that value, as a tonne of computer motherboards contains more gold in it than a tonne of gold ore. In terms of scale, the material value of global e-waste was estimated to be €48 billion in 2014 alone. 6 This underutilized resource has a vast ‘untapped potential to create a more sustainable, efficient product ecosystem’. 7

The circular economy takes the traditional, linear model of ‘take, make, and dispose’—which moves products from design to factory to consumer to landfill—and bends it into a more efficient closed-loop ecosystem. Unwanted used electronics can be taken back for refurbishment and then resold on the secondary market. Products beyond repair, or those that are no longer economical to repair, are recycled to allow for precious and scarce materials to be recovered. Recycled content can either be incorporated into the design and manufacturing of new products or sold for others to use.

Research shows that approximately 30 per cent of consumers have technology products lying around the house unused, and half of consumers are unsure about what to do with their old electronics. 8 According to Dell, similar situations exist with businesses warehousing old equipment. Take-back options make it easy for a wide variety of customers to dispose of their old electronic products in a responsible manner. This measure ensures that unwanted electronics get reused or, if at the end of life, properly recycled.

Plastic is one of the most useful and important materials in modern society. It is popular in computers due to its durability, ease of fabrication into complex shapes, and electrical insulation qualities. 9 However, plastic recycling remains challenging and, as a result, the material constitutes a major contributor to landfills and to nonpoint source pollution—pollution from many different sources. The production of traditional plastics also uses a substantial amount of fossil fuels. Manufacturing plastics from fuel is resource intensive, requires large amounts of energy, and releases relatively high levels of CO 2 emissions in the process. Recent research has shown that our current use of plastics will become unsustainable if we do not take steps to improve recycling and reduce plastics’ usage.

Using secondary, recycled plastic as feedstock for new computers presents one possible solution. With the fast pace of innovation and product upgrades in the ICT sector, recycled content can reduce the environmental toll of manufacturing with virgin materials. The circular economy and the development of secondary raw material markets are high on the European agenda. Nevertheless, it remains challenging to find a sufficient supply of high-quality post-consumer recycled plastics that meets the technical, economic, and aesthetic requirements of ICT products manufacturers. 10

In response, Dell is taking steps towards creating a ‘circular’ supply chain (see also Interface, Chapter 25 ). In addition to environmental concerns, the increased volatility in commodities and growing pressure on resources have alerted Dell to the business necessity of rethinking materials and energy use. 11 In 2013, Dell committed to putting a total of 50 million pounds weight of recycled materials back into its products by 2020. The company reached this goal at the beginning of 2017 and is continuing to scale its efforts.

For Dell, sourcing post-consumer recycled plastics from the market and building a new, stable closed-loop supply chain for plastics from used electronics collected through take-back programmes present viable and affordable alternatives to using virgin materials. Rather than focusing exclusively on individual challenges, Dell has taken steps to approach their supply chain from a broader, systemic perspective. Most recently, this has included expanding its efforts to also address precious metals, such as gold. Jennifer Allison, director of supply chain sustainability at Dell, summarizes the company’s current business strategy:

We’re talking about systems—not just products, programmes, or initiatives. Looking at the whole system is when change begins to make a significant difference. Technology is a great tool for measuring and analysing systems, understanding processes, and identifying inefficiencies. 12

In this way, Dell takes a whole ecosystem view of its product life cycles. This approach is transforming the design of products and services. Dell’s life-cycle approach aims to keep viable products and parts in circulation for longer periods of time. It also harnesses global efforts to reuse, refurbish, and resell products and parts to extend their lifetimes and to recycle them at the end of life.

Product design emphasizes ease of repair and recyclability from the beginning. Dell also looks continuously for ways to incorporate sustainable materials, such as recycled plastic and reclaimed carbon fibre, into products and packaging. 13

The Take-Back Programme

Dell has the world’s largest electronics take-back programme, which spans more than seventy-five countries and territories. The programme has recovered approximately 800,000 tonnes of electronics since 2008. For commercial customers, Dell offers a full-spectrum of logistics and disposal capabilities via the Asset Resale and Recycling Service. Current capabilities include data security, on-site shredding, recycling, and full traceability reporting. Dell also makes it easy for individual consumers to recycle by partnering with freight companies to provide free mail-back recycling of Dell-branded equipment. In many countries, the programme will even pick up used equipment from a customer’s home. 14

Another programme designed to make the recovery of obsolete electronics easier and more accessible is the Dell Reconnect Partnership with Goodwill, a not-for-profit organization committed to helping people become independent through education and training. The Reconnect Programme allows people to drop off any brand of used electronics to more than two thousand participating Goodwill locations across the United States. Dell Reconnect accepts any brand of computer equipment in any condition from consumers and provides free recycling services.

Dell returns all proceeds to Goodwill in order to help support Goodwill’s mission of putting people to work. 15 By participating in this initiative, customers simultaneously help protect the environment, benefit the community, and receive a receipt for tax purposes. In this way, the programme helps both the customers and the business.

The donated equipment has value as a whole system, as parts, and sometimes as raw materials such as metals, plastics, and glass. 16 If the equipment can be refurbished, Goodwill sells it. If not, the end-of-life product is sent to Wistron, one of Dell’s recycling partners, for asset recovery in the United States. Metals such as tin, gold, 17 and tungsten are re-sold in the commodities market. To complete the closed loop, plastics are sorted and shipped to China, turned into pellets, and mixed with virgin plastics for use in new Dell products. 18

Closed-Loop Recycled Plastic Supply Chain

Dell’s 2020 ‘Legacy of Good’ sustainability plan set the goal of incorporating 50 million pounds weight of post-consumer recycled-content plastics and other sustainable materials into Dell products by 2020. 19 Dell met this target ahead of schedule in early 2017.

It started with the launch of Dell’s closed-loop recycled plastics supply chain in 2014. Since then, the company has used more than 9,750 tonnes of closed-loop plastics in over 125 products. These products include flat-panel monitors, desktops, and all-in-one computers.

Run in conjunction with various supply chain partners, the programme consists of collecting, recycling, and using e-waste to make new Dell products. 20 It begins with sorting plastics out of the various take-back streams, further processing them, and then sending them to a manufacturing partner in Asia. The plastics are then melted down and moulded into new parts and computer components, thereby creating a closed-loop system. The whole process—from the time the equipment is received for recycling to the time the plastics are back in a customer’s hands as part of a new product—takes just under six months. The closed-loop system also provides businesses with a price more stable than the cost of virgin materials, which fluctuates with the price of oil. It also reduces the company’s dependence on those environmentally costly virgin materials. Furthermore, by reusing plastics already in circulation, Dell cuts down on e-waste, reduces carbon emissions, and helps drive a circular economy for IT. The closed-loop process yields an 11 per cent lower carbon footprint than a process using virgin materials, 21 and creates products that are better for the environment, which is increasingly what Dell customers demand. 22 Dell was also the first PC manufacturer (January 2018) to use recycled gold from e-waste in its products. Working with the data analyst TruCost, it found that this closed-loop process can cause 99 per cent less environmental damage and avoid $1.6 million in natural capital costs per kilogram processed (US$3.68 million for the pilot project alone) when compared to gold mining. The same study showed closed-loop process can avoid 41 times the social impacts of gold mining.

Dell’s leadership in recovering and reusing plastic from used computers constitutes an important step in moving the larger electronics industry towards a circular economy. Louise Koch, corporate sustainability director in EMEA for Dell, describes the impetus for initiating a closed-loop system:

Dell’s programme is driven by both an effort to improve efficiency—a principle that goes back to its founding ethos and business model—as well as a commitment to reducing environmental impact. 23

The use of closed-loop plastics may create a demand for plastic from used computers and thereby increase the level of plastic recycling from electronics. This, in turn, generates new jobs and opportunities for those in the nascent industry, all while staying true to Dell’s founding principles.

Challenges in Moving to a Closed-Loop Recycling System

In moving from the traditional take–make–dispose linear supply chain to a circular supply chain, Dell has had to overcome a number of hurdles.

One of the biggest challenges that Dell faced with the closed-loop recycling was identifying which types of plastic can be incorporated back into new products. As Scott O’Connell, director of environmental affairs for Dell, puts it, ‘When dealing with plastics, getting the properties equivalent or better to virgin materials isn’t easy…But this is a challenge we’ve been able to overcome with engineering know-how.’ 24 Dell worked with partners to test different approaches. Testing revealed that, due to mechanical and aesthetic considerations, a blend of recycled-content with virgin plastic produces the best outcomes.

Another challenge involves establishing a reliable closed-loop supply chain. As O’Connell describes, ‘We had to make sure that we had sufficient volume of product coming in to be able to yield enough plastics to put into a mainstream Dell product.’ 25 Supply of products and plastic derives from Dell’s own sources, which adds a greater degree of insight and security. However, for the closed-loop recycling to work and scale, Dell needs security of supply, which can be difficult to attain with fluctuating numbers of products collected through take-back. Shrinking form factors—the fact that there is less plastic per item recycled as electronics become smaller—further complicate the situation. Hence Dell needs to continue to drive increasing participation in take-back programmes, while at the same time exploring other means of acquiring recycled-content materials.

Transporting materials poses an additional challenge. Dell customers are all over the world, which means that take-back initiatives must accommodate the global scale. While Dell has a small closed-loop plastics supply chain in Europe already and is exploring ways to scale in other geographies, materials need to be collected in sufficiently large amounts to make shipping to a centralized processor worth the economic and environmental costs. This involves logistics, regulations, and other considerations. In some cases, even the definition of the material being moved can affect the viability of closed-loop efforts: is recycled plastic labelled as waste or a raw material, for example?

The final challenge for Dell is to demonstrate the benefits of closed-loop recycling to customers. Ultimately, the products look and perform exactly the same as those made from virgin materials. Dell must communicate the value proposition to customers by highlighting the amount of recycled content in the final product, the closed-loop nature of the materials, and the benefits to the customers’ own sustainability goals.

Performance

Since 2008, Dell has taken back more than 1.76 billion pounds (nearly 800,000 tonnes) of used electronics and since mid-2014, when Dell launched the closed-loop plastic recycling programme, it has created nearly 5,000 tonnes of plastics from recycled computer parts. Dell has saved more than $1.8 million from this process, and the carbon footprint of circular plastics is 11 per cent smaller than that associated with the manufacture of virgin plastics. Dell now uses circular plastics in approximately 125 products across millions of units globally.

Together with TruCost, Dell has completed an evaluation to understand the gains from moving away from virgin plastics. One of the most useful ways for companies to assess the risks associated with new initiatives is to quantify the environmental impacts generated by their activities—internal operations, upstream supply chain, and downstream product use and disposal—and then convert those impacts into monetary values. 26 The monetary value helps identify the value not captured in traditional financial markets and incorporates these considerations into decision-making. 27

Findings showed that Dell’s closed-loop plastic has a 44 per cent ($1.3 million annually) greater environmental benefit than virgin ABS plastic. 28 In particular, increased computer recycling lessened environmental impacts. The research found that recovering and recycling the used plastics from computers minimized ‘human health and ecotoxicity impacts’ and reduced the overall emission of hazardous substances. 29

Dell has also begun to incorporate social impact metrics into its valuation framework. 30 Emergent strategies such as analysing activities for their use of social and human capital are likely to be an area for further refinement and application in the future. 31 At present, Dell is combining both environmental and social impact metrics into its process in order to help tackle the challenge of responsible e-waste disposal.

On a global scale, there is still huge potential to scale up circular resource streams in the IT sector and beyond. Only 10 per cent of the plastics produced today are recovered—and more than 50 per cent end up in landfills.

Dell has increased the use of recycled materials (both closed-loop and traditional post-consumer recycled materials) in new products and plans to continue to scale the programme.

As Dell continues to scale the current programme, it will look to expand into reclaiming and reusing other materials. Dell has already had success with using reclaimed carbon fibre for products and is currently using recycled ocean plastics ink made from captured diesel emissions for packaging.

Dell will also look at how ocean plastics or other solutions can be used with products.

Dell will continue to measure social impact using the same methodology, updating models for collection totals to follow form-factor trends. It will report progress annually, building on this total toward a cumulative 2 billion pounds by 2020. 32

Dell continues to lead conversations with governments and industry partners about recycling and circular loops on a global scale. Dell is open to innovative collaborations with even more customers, partners, and governments in the coming years. Dell sees particular opportunities in creating partnerships in developing countries to strengthen this ecosystem.

Dell’s take-back programme presents a compelling example of the potential of circular economy and closed-loop systems to contribute to responsible, mutual business practices. Looking towards the future, creating closed-loop recycling programmes in developing countries represents a new frontier. Recycling products in the countries from which they are recovered brings skilled jobs, creates industry, and strengthens the local economy. 33 Using its proven abilities to leverage partnerships and government relationships to create the infrastructure needed for new programmes, Dell can continue driving a culture of recycling in communities around the world. 34 As Dell’s programme example highlights, collaborative approaches have the potential to create both financial and environmental savings for corporations and customers on a global scale.

‘Dell Inc. at a Glance,’ Company Profile, Vault.com, http://www.vault.com/company-profiles/computer-hardware/dell-inc/company-overview .

Center for Security Studies, http://isnblog.ethz.ch .

Baldé, C.P., Forti V., Gray, V., Kuehr, R., Stegmann, P. The Global E-waste Monitor – 2017, United Nations University (UNU), International Telecommunication Union (ITU) & International Solid Waste Association (ISWA), Bonn/Geneva/Vienna.

Rubin (2015).

Kitsara (2014).

Baldé et al. (date).

Anya Khalamayzer.(2017) “8 Ripple Effects of the Circular Economy in 2017”, Greenbiz, https://www.greenbiz.com/article/8-ripple-effects-circular-economy-2017 .

‘Switched on to Value,’ WRAP Report, November 2014, http://www.wrap.org.uk/sites/files/wrap/Switched%20on%20to%20Value%2012%202014.pdf .

‘Plastics: Key Materials for Innovation and Productivity in Major Appliances,’ American Plastics Council, http://infohouse.p2ric.org/ref/11/10437.pdf .

‘Best Practices in Recycled Plastic,’ DigitalEurope , August 2016, http://www.digitaleurope.org/DesktopModules/Bring2mind/DMX/Download.aspx?Command=CoreDownload&EntryId=2276&language=en-US&PortalId=0&TabId=353 .

‘Best Practices in Recycled Plastic,’ DigitalEurope .

‘Full Circle’, Institute for Supply Management, October 2016—Lisa Arnseth interview with Jennifer Allison.

‘Dell on the Circular Economy’, March 2016, http://i.dell.com/sites/content/corporate/corp-comm/en/Documents/circular-economy-0316.pdf .

‘Dell Recycling,’ Dell Inc., http://www.dell.com/learn/us/en/uscorp1/dell-environment-recycling .

‘About Us,’ Goodwill Industries International, Inc., http://www.goodwill.org/about-us/ .

‘Dell Reconnect—How It Works’, Dell Inc., http://www.dell.com/learn/us/en/uscorp1/corp-comm/how-it-works-reconnect .

www.dell.com/gold .

Hower (2015).

‘Dell 2020 Legacy of Good Plan’, Dell Inc., http://i.dell.com/sites/doccontent/corporate/corp-comm/en/Documents/2020-plan.pdf .

‘Dell’s Closed-Loop Recycling Process’, Dell Inc., https://www.google.co.uk/url?sa=t&rct=j&q=&esrc=s&source=web&cd=2&cad=rja&uact=8&ved=0ahUKEwjdkPqots7TAhXhKsAKHde7AF0QFggoMAE&url=http%3A%2F%2Fi.dell.com%2Fsites%2Fdoccontent%2Fcorporate%2Fsecure%2Fen%2FDocuments%2FClosed-LoopRecyclingfull.pdf&usg=AFQjCNHzBL-F4ooKUkKnDSbgyHG8CLRzQ&sig2=bKIXDKjRA1YoWSQgh4H5yg .

Louise Koch (Corporate Sustainability Lead for Europe, Middle East and Africa), personal communication.

Scott O’Connell (Dell, Director of Environmental Affairs), interviewed by Mike Hower (Hower 2015)

Dell, Dell Inc., http://www.dell.com/en-us/ .

‘Valuing the Net Benefit of Dell’s More Sustainable Plastic Use at an Industry-Wide Scale’, Trucost, September 2015, http://i.dell.com/sites/content/corporate/corp-comm/en/Documents/circular-economy-net-benefits.pdf .

‘Dell 2020 Legacy of Good Plan,’ Dell Inc., http://i.dell.com/sites/doccontent/corporate/corp-comm/en/Documents/2020-plan.pdf

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Strategic expansion: Canadian companies' roadmap to US capital success

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Case study: Dell—Distribution and supply chain innovation

Read the highlights

• Cutting out the middleman can work very well.
• Forgoing the retail route can increase customer value.
• Re-examine & improve efficiency for process/operations.
• Use sales data and customer feedback to get ahead of the curve.

In 1983, 18-year-old Michael Dell left college to work full-time for the company he founded as a freshman, providing hard-drive upgrades to corporate customers. In a year’s time, Dell’s venture had $6 million in annual sales. In 1985, Dell changed his strategy to begin offering built-to-order computers. That year, the company generated $70 million in sales. Five years later, revenues had climbed to $500 million, and by the end of 2000, Dell’s revenues had topped an astounding $25 billion. The meteoric rise of Dell Computers was largely due to innovations in supply chain and manufacturing, but also due to the implementation of a novel distribution strategy. By carefully analyzing and making strategic changes in the personal computer value chain, and by seizing on emerging market trends, Dell Inc. grew to dominate the PC market in less time than it takes many companies to launch their first product.

No more middleman: Dell started out as a direct seller, first using a mail-order system, and then taking advantage of the Internet to develop an online sales platform. Well before use of the Internet went mainstream, Dell had begun integrating online order status updates and technical support into their customer-facing operations. By 1997, Dell’s Internet sales had reached an average of $4 million per day . While most other PCs were sold preconfigured and pre-assembled in retail stores, Dell offered superior customer choice in system configuration at a deeply discounted price, due to the cost-savings associated with cutting out the retail middleman. This move away from the traditional distribution model for PC sales played a large role in Dell’s formidable early growth. Additionally, an important side-benefit of the Internet-based direct sales model was that it generated a wealth of market data the company used to efficiently forecast demand trends and carry out effective segmentation strategies. This data drove the company’s product development efforts and allowed Dell to profit from information on the value drivers in each of its key customer segments.

Virtual integration: On the manufacturing side, the company pursued an aggressive strategy of “virtual integration.” Dell required a highly reliable supply of top-quality PC components, but management did not want to integrate backward to become its own parts manufacturer. Instead, the company sought to develop long-term relationships with select, name-brand PC component manufacturers. Dell also required its key suppliers to establish inventory hubs near its own assembly plants. This allowed the company to communicate with supplier inventory hubs in real time for the delivery of a precise number of required components on short notice. This “just-in-time,” low-inventory strategy reduced the time it took for Dell to bring new PC models to market and resulted in significant cost advantages over the traditional stored-inventory method. This was particularly powerful in a market where old inventory quickly fell into obsolescence. Dell openly shared its production schedules, sales forecasts and plans for new products with its suppliers. This strategic closeness with supplier partners allowed Dell to reap the benefits of vertical integration, without requiring the company to invest billions setting up its own manufacturing operations in-house.

Innovation on the assembly floor: In 1997, Dell reorganized its assembly processes. Rather than having long assembly lines with each worker repeatedly performing a single task, Dell instituted “manufacturing cells.” These “cells” grouped workers together around a workstation where they assembled entire PCs according to customer specifications. Cell manufacturing doubled the company’s manufacturing productivity per square foot of assembly space, and reduced assembly times by 75%. Dell combined operational and process innovation with a revolutionary distribution model to generate tremendous cost-savings and unprecedented customer value in the PC market. The following are some key lessons from the story of Dell’s incredible rise:

1. Disintermediation (cutting out the middleman): Deleting a player in the distribution chain is a risky move, but can result in a substantial reduction in operating costs and dramatically improved margins. Some companies that have surged ahead after they eliminated an element in the traditional industry distribution chain include:

• Expedia (the online travel site that can beat the rates of almost any travel agency, while giving customers more choice and more detailed information on their vacation destination)
• ModCloth (a trendy virtual boutique with no bricks-and-mortar retail outlets to drive up costs)
• PropertyGuys.com (offers a DIY kit for homeowners who want to sell their houses themselves)
• iTunes (an online music purchasing platform that won’t have you sifting through a jumble of jewel cases at your local HMV)
• Amazon.com (an online sales platform that allows small-scale buyers and sellers to access a broad audience without the need for an expensive storefront or a custom website)
• Netflix (the no-late-fees online video rental company that will ship your chosen video rentals right to your door)

2. Enhancing customer value: Forgoing the retail route allowed Dell to simultaneously improve margins while offering consumers a better price on their PCs. This move also gave customers a chance to configure PCs according to their specific computing needs. The dramatic improvement in customer value that resulted from Dell’s unique distribution strategy propelled the company to a leading market position.

3. Process and operations innovation: Michael Dell recognized that “the way things had always been done” wasn’t the best or most efficient way to run things at his company. There are countless examples where someone took a new look at a company process and realized that there was a much better way to get things done. It is always worth re-examining process-based work to see if a change could improve efficiency. This is equally true whether you’re a company of five or 500.

4. Let data do the driving: Harnessing the easily accessible sales and customer feedback data that resulted from online sales allowed Dell to stay ahead of the demand curve in the rapidly evolving PC market. Similarly, sales and feedback data were helpful in discovering new ways to enhance customer value in each of Dell’s key customer segments. Whether your company is large or small, it is essential to keep tabs on metrics that could reveal emerging trends, changing attitudes, and other important opportunities for your company.

See additional learning materials for distribution .

Summary: Dell combined operational and process innovation with a revolutionary distribution model to generate tremendous cost-savings and unprecedented customer value in the PC market.

Read next: customer discovery: identifying effective distribution channels for your startup.

Strickland, T. (1999). Strategic Management, Concepts and Cases . McGraw Hill College Division: New York.

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How to achieve organizational excellence with ISO 9001: A case study

Business leaders are on a continual quest to maximize profits and customer satisfaction. Unfortunately, many see quality management as an overhead expense. If quality professionals are to be more proactive in organizational success, as suggested in ISO 9001:2015 , we need to address Quality Management System (QMS) implementation using a more business-oriented approach. To find out how, read the following ISO 9001 implementation case study.

The paradigm shift – Learn from the industry leaders

The following is a case study of how Dell Computer implemented their ISO 9001:2000 transition. It was first implemented in their Asset Recovery Business (ARB), which had major challenges in meeting its strategic business goals.

The directive was not merely to implement the 2000 revision for compliance, but to examine each element for creating a return on investment. We created a web-based tool called The Business Management Interactive System (BMIS), which was an enterprise-wide operational control system that embedded the requirements of ISO 9001:2000 into the workflow.

The directive from senior management

“ARB will be successful only by focusing on the management system as a whole.

• ISO 9000-1994 focuses on operations related to production and delivery of goods and service
• ISO 9000-2000 scope will require an enterprise-wide focus

The ARB Business Management System will be designed to address current and future management system requirements by incorporating a continuous process improvement methodology across the enterprise.”

Instead of the quality group conducting training for management, management opened the transition kick-off meeting with the following mandate:

• Ever-improving Value to Customers
• Marketplace Success and Enhanced Competitiveness
• Applicable to Entire Organization
• Process-Focused
• Assessments and Measures of Progress Toward World-Class

Implementation

The implementation team consisted of cross-functional individuals who each focused on their own areas of responsibility. A web programmer incorporated not only the QMS requirements, but all business functions into BMIS on the corporate web.

Every piece of data that anyone in ARB needs to do their jobs would be no more than three clicks away.

The screen saver is a scrolling real-time set of operational performance metrics that alerts the process owners to variations in effectiveness and timeliness.

The outcome

And here are the outcomes:

• Within a year of implementation, the division reported that they had turned around a significant operating loss to profitability.
• They were able to create a 40% business growth.
• They increased unit sales by 145%.
• They consolidated five manufacturing facilities into two.
• They reduced manufacturing costs by 15%.
• They reduced out-of-box audit defect rates from 28% to 7.3%.
• Their transition certification auditors praised BMIS as “best in class.”

These are the metrics that matter to business leaders. In this case, they are particularly significant because Dell amortized the cost of our consulting fees and the cost of the employees who worked on the transition in less than a year.

Making the transition

The table below is an overview of the transition from quality management to a business excellence model based on ISO 9001:2015.

This table is intended to guide the reader into potential enhancements to your QMS if you are striving for a higher level of excellence and greater return on investment.

Meaning of terms

Within the constraints of the blog post, the following are high-level summaries of the meaning of each term used in the crosswalk. Please use the comments section below if you desire more detailed explanations.

• 3.0 – Your organization will need to create definitions of “organizational excellence” processes and tools unique to your environment.
• 4.0 – Beyond the traditional QMS approach to organizational context, identify the contents of the mission and vision you will employ for achieving organizational excellence.
• 4.1 – 4.4 – Consider renaming your management system to Business Management System. It sends a message that the QMS is part of an enterprise-wide model for excellence.
• 5.0 – One of the foundational tenets of highly effective organizations is learning how to lead people and manage processes. Leading creates ownership. Managing people is often punitive.
• 5.1 – 5.3 – In the Dell example, the organization underwent a fundamental cultural renaissance from the top down. This is often not practical in existing organizations, but the traditional quality policy can often be enhanced to create an enterprise-wide mission plan.
• 6.0 – Planning a Business Management System is more holistic than simply implementing ISO 9001:2015.
• 6.1 – 6.3 – Consider a risk-avoidance approach to error-proofing your organization. Focus on identifying opportunities to identify foreseeable risk and include them in your planning.
• 7.0 – Another ambitious undertaking is to consider implementing outcome-based risk and reward metrics for all processes. Encouraging accountability is the basis for defect avoidance.
• 7.1 – 7.5 – If you do not have one, consider empaneling a standing, cross-functional committee to oversee the entire BMS. Conduct regular meetings with specific agendas of maintenance and improvement.
• 8.0 – The ISO 9001-based QMS has always been process-driven. Consider creating similar processes and metrics that do not currently exist in the rest of the organization.
• 8.1 – 8.7 – Within each element of 8, ensure that all process metrics are tied to business key performance indicators.
• 9.0 – Make the focus of improvement more about business excellence than corrective action or traditional process improvement.
• 9.1 – 9.3 – Include risk avoidance and business excellence in the activities of 9.
• 10.0 – Focus on enterprise-level improvement, not just on process improvement.
• 10.1 – 10.3 – There are new paradigms in implementing defect avoidance as a culture, not just nonconformance controls.

For more about ISO 9001 benefits, read this article: Six Key Benefits of ISO 9001 Implementation .

Consider alternative approaches to maximize your business objectives

This blog post is a very high-level introduction to The Evolution of Quality Management to Organizational Excellence. To implement it to the level that Dell ARB did requires fundamental cultural changes, bold risk-taking, and extreme commitment to the mission.

Many of you will find the concept overwhelming. You can, however, implement some of the tenets, like linking quality metrics to business key performance indicators, as a test case. You can become educated on the concepts of leading people and managing processes and gradually facilitate the transition.

For more benefits from ISO 9001 implementation, download this free white paper: How can ISO 9001 help your business grow?

To learn what ISO 9001 certification is, and why it is important, see this article: ISO 9001 Certification .

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Dell Case Study – Analysis – Internal Challenges

This post analyzes a Dell case study. The analysis explores several challenges that Dell is facing introduces a number of solutions.

Introduction

Dell is a multinational company based in Texas. Dell offers computers and related products together with repairs and support.

Dell’s products adapt to many market sectors including students, gamers, programmers, businesses, etc. Dell positions itself firmly in both hardware and software industries by using its core competencies. Dell offers reliable, cost-effective and customizable computer products to all its customers worldwide.

Dell transformed consumers’ shopping experience with its mass customization strategy. Dell has continued the same strategy for years and left a door of opportunity open for HP. In 2006 Dell faced many unfortunate incidents: some rechargeable battery packs had the potential to self-ignite, very low earning reports and analysts gave Dell a very negative outlook for coming years. Recently Hewlett Packard (HP) has taken a big market share from Dell. HP as well as Sony, Lenexa, Apple, and other competitors are continuously evolving and becoming a bigger threat to Dell. Competitors can take more market share over time. They can also try to beat Dell’s core competencies and take it out of the market.

Internally Dell is also facing some challenges. The employees at Dell are not completely satisfied, turnover seems to be a growing problem. Other companies are recruiting talented employees from Dell. If all these employees are quitting, then Dell will have to look for new talents. Recruiting new employees is not only time consuming, but also very costly. The fact that employees are not satisfied with the company is a result of other internal problems: company culture issues. There is no deep connection between Dell and its employees.

Main Challenge

Dell is losing market share in its industry. Strong competitors are becoming bigger threats. Competitors are an external challenge that could be overcome by enforcing Dell’s core competencies. Dell has many competitors and some of them have very attractive value propositions. Dell has lost its attractiveness toward clients and may continue to do so due to the decay in the company’s values and objectives. The core problem is that Dell has failed to demonstrate stakeholders its desire for innovation and continuous improvement. The employees are working toward making processes cheaper and not towards new technologies. In general, the culture in the workplace is in decline. Employees do not find the workplace suited for a technology company.

Other stakeholders have also seen a similar picture in these past years. Dell has continued with the same strategy, without getting major advancements in the market. Dell has released products that fail the minimum requirements and that are also a potential hazard to the users. It has also reduced revenue significantly, reducing shareholder’s interest. Dell has not been keeping up with competition and has not been improving over time. All the issues in the problem are completely or in part due to the core problem inside the company.

Several solution paths can be taken to solve the core problem, some of these are the following:

1-Dell could come up with another marketing strategy only focusing on a specific aspect of their company. They could focus more on software or customer service for example.

2-Dell could continue with their high customization strategy, but increase the desire for innovation. They can continue evolving their core competencies and add new ones along the way, focusing on continuous improvements. They need to focus on the stakeholders working in the company too, spread the company’s culture and objective.

3-They could also adopt their competitor’s new strengths and try to implement them. They would have to figure out how to adapt them in their own way and be creative.

Solution Analysis

If Dell decides to go for solution 1, it will have to become more competent in the specific competency. Even though Dell is part of the hardware and software industry, if it inclines more, either way, it will need to develop new skills. These skills will be gain over time but could cost time and money. If Dell focuses on a specific part of its business, it will be so much easier to manage and promote. The biggest problem in this solution is the timeline. Competitors will continue taking away market share if Dell does not act quickly.

Solution 3 is also a fair solution. Competitors are definitely doing something right, and possibly better than Dell. Dell could focus on researching those aspects and learning from competitors. Some of their strategies may be public information, but most of them will be confidential. This could be an issue because Dell won’t be able to get the whole picture without all the information.

Expanding on Solution 2

Solution 2 can solve the core problem more efficiently. The company should continue developing its core competency since for years its competency has to lead them to success. The difficulty is that Dell has to accelerate the creative process and focus more on developing its core competency. 

Dell has to start from the core of the company: the employees. Talented workers are hard to find. Dell needs committed employees that will discover new technologies and processes. Having a high commitment to the company is usually a product of great company culture and outstanding work environment.

Following this solution, Dell won’t have to reduce the services and products they provide. Earnings are distributed among all the offered services and products. Dell’s customers are interested in specific ones that adapt to their needs, taking products or services out can be a big risk.

Following solution number 2 customers and communities will definitely get benefits; they will be able to have access to more reliable services and products. Technology is evolving, businesses need to be on top of the game with their tools, computer equipment is nowadays a must-have and Dell can offer them high-quality products. Environmentally, this strategy won’t produce many changes, but definitely Dell cannot increase environmental impact or pollutants trying to develop better products, because the communities will get affected.

The competition was tough in the past and will continue to be. It will be expected that competitors will bring new strategies and new products to the market. Dell has been at the top of the market share for years and hopefully enforcing its competencies and following solution 2 will help it defend its position.

Implementation

To execute the solution Dell should have the core problem clear and start by making a program with employees. Dell has to be aware of the challenges it is facing and why does it need to focus on improving the competencies and innovations. The best start will be a program for employees to clarify the company’s culture, objectives and also threats. At the same time, Dell will offer employees a more dynamic and open work environment to incentivize creativity and growth. Once the company is working towards the improvement of services/ products they can start advertising to the public and showing their improvements. Using its core competency (custom-built computer services) will help attack customers since many of the customers have been loyal to the company for years. Also, among its competitors, Dell is experienced and still owns a big percent of the market share.

The part involving employees and inside the company training has to be implemented now. Employees may take some time to be able to assimilate the changes and start working towards the new objectives. On the other hand innovation and custom build, computer improvement can take some more time.

The optimal outcome is that Dell will win back the market share it lost and continue growing. Dell will then become more profitable and also be able to keep stakeholders satisfied with the company. Turnover among employees should be reduced and motivation increased.

To measure the success of the solution, some factors can be measured directly:  net income, market share, and sales. These parameters should increase; it won’t be difficult to measure since it is quantitative information. Employee satisfaction is measurable in opinion surveys and turnover rates.

Contingency Plan

In the case there is no difference after the solution has been executed, Dell could implement solution 3 as a contingency plan. The other companies will be more experienced in the matter, but Dell could possibly still get some benefit from inspiring some of their work in other competitors. Competition is very hard, and sometimes it can lead to ethically questionable practices. Companies can go into battles to prove their products are superior. Even Dell could follow one of these practices because they are very strong in the market and the may get external support. On the other hand, following any unethical practice could lead to long-lasting mistrust.

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Why Dell’s ThinOS runs on FreeBSD

Dell Technologies is a global leader in information technology, offering a wide range of products and services, including personal computers, servers, networking, and storage solutions. Known for its innovative approach to technology, Dell’s mission is:

 “to be the most successful computer company in the world at delivering the best customer experience in markets we serve.”

The company’s ThinOS 9, inherited by its acquisition of WYSE Technology, is an embedded operating system for thin client devices in virtual workspace solutions.

Several Dell products use ThinOS 9, such as the OptiPlex 3000 Thin Client, the OptiPlex All-In-One, and the Latitude series laptops, such as the Latitude 3440 and 5440. ThinOS is a ready-to-deploy solution that aims to improve virtual desktops while offering a secure platform for applications and services. It provides users with a seamless and integrated experience, whether remotely or from the office. It’s a software environment that optimizes virtual workspaces.

The latest version, ThinOS 9, is built on FreeBSD 12 with other 3rd-party open source components and is well-known for its robust security and stability. This aligns with the requirements of modern enterprises that demand high performance and protection in their computing solutions.

The significance of security and stability in the design of ThinOS

ThinOS’s architecture follows a “secure by design” philosophy. This approach minimizes potential attack surfaces by providing a locked-down desktop experience that ensures sensitive data and personal information remain inaccessible on local devices. 

This security-first approach aligns with the core principles of FreeBSD, which provides a reliable and controlled kernel environment, further enhancing ThinOS’s secure nature.

The stability of FreeBSD is another critical factor in its selection as the backbone of ThinOS. Unlike other operating systems, frequent updates do not introduce instability, as FreeBSD’s kernel offers reliability and predictability critical for enterprise environments. This stability reduces administrative overhead and ensures consistent performance, making it an ideal choice for ThinOS.

Why FreeBSD?

Choosing FreeBSD as the base of ThinOS was a strategic decision driven by several key factors:

• License Advantages: FreeBSD’s BSD license offers customization flexibility without the obligation to disclose proprietary enhancements. This aspect is crucial for Dell, allowing the company to tailor the OS to its specific security and performance needs while maintaining proprietary control over its software.
• Engineering Efficiency: Dell’s engineering team benefits from FreeBSD’s stable kernel source code. It simplifies integrating and maintaining customized code, reducing the effort and resources required to keep ThinOS up to date.
• Security Enhancements: The stability of the FreeBSD kernel, coupled with the permissive BSD license, which allows vendors to keep proprietary modifications under wraps, significantly bolsters ThinOS’s security posture and creates a robust platform less susceptible to attacks than a CopyLeft-based system with GPL components.

Future plans and expectations

Dell’s commitment to FreeBSD is about leveraging its capabilities and collaborating to shape the future. The roadmap for ThinOS includes:

• Upgrade base OS to FreeBSD 14: The next version of ThinOS, version 10, will use the current release version of FreeBSD, version 14.
• Enhanced Hardware Support: Upgrading the FreeBSD kernel to support an ever-widening array of hardware platforms, ensuring ThinOS remains compatible with the latest technological advancements.
• Linux Application Compatibility: Improving FreeBSD’s Linux application binary interface (ABI) will allow a broader base of Linux applications to run seamlessly on ThinOS, enhancing its versatility and appeal.
• Driver Portability: Making it easier to port Linux device drivers to FreeBSD, which will streamline the integration process and the adoption of new hardware technologies.
• Advanced Security Features: This feature builds upon the MAC (Mandatory Access Control) framework to introduce more sophisticated security capabilities, fortifying ThinOS against emerging threats.

Dell’s commitment to open source and innovation with FreeBSD

Dell’s acquisition of WYSE and its decision to continue using FreeBSD as the basis for ThinOS demonstrates its ongoing dedication to open source principles and combines the robustness of enterprise solutions with the adaptability and innovation inherent in open source projects. The partnership between Dell and FreeBSD is not merely a technical choice but a reflection of a broader strategy that values security, stability, and collaborative development.

Through ThinOS, Dell demonstrates how commercial ventures can harness the power of open source software to create technologically advanced, secure, and reliable products. The future of ThinOS, powered by FreeBSD, looks promising, with continuous enhancements and a growing ecosystem that benefits both the open source community and enterprise users.

Contribute to the FreeBSD Project

Whether you’re mentoring, promoting FreeBSD, or participating in forums and mailing lists, your efforts drive innovation and growth of the Project. Support the FreeBSD project today by joining our vibrant community and helping build our long-standing and growing open source ecosystem! Enhance FreeBSD by improving documentation , addressing bug reports , submitting code , and engaging in discussions . Every contribution, big or small, helps evolve FreeBSD into a more stable, secure, and performant open source operating system. 

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Case Study: Management Information System at Dell

Management information system involves the information system and the organization. MIS begins where computer science ends. Computer scientists deserve accolades for developing and delivering even more advanced forms of information technology: hardware technology; software technology; and network technology. Yet because no technology implements itself, there is more to MIS than just information technology. MIS has dimensions. The four interrelated dimensions of MIS are as follows: First, MIS involves not just information technology, but also its instantiation; second, MIS involves, as reactive and inextricable elements, both an information system and its organizational context; third, MIS involves information technology as a form of intellectual technology; and fourth, MIS involves the activities of a profession or corporate function which are integral to the essence of what MIS is (Currie & Galliers, 1999).

Dell Computer Corporation: Company Background

Dell Computer Corporation is a major manufacturer of personal computers, computer peripherals, and software. Among the leading producers of computers in the world, Dell sells its products directly to customers through the Internet and mail-order catalogs rather than through retail outlets. The company is based in Round Rock, Texas. At Dell Computers, customers are brought into the product planning and manufacturing processes, with all employees encouraged having contact with customers. Through effective collaboration across boundaries, ideas can be shared about product designs and value propositions. The result is faster and more customer-focused product and service innovation. To produce the capacity for this, considerable attention must be placed on organizational structures, processes, skills and culture. Such elements may need a radical overhaul in established companies (Dennis & Harris, 2002). Dell was founded in 1984 by Michael Dell. In 1983, during his freshman year at the University of Texas, he bought excess inventory of RAM chips and disk drives for IBM personal computers from local dealers. He resold the components through newspaper advertisements at prices far below retail cost. By 1984, his sales totaled about $80,000 a month. In April 1984, Dell dropped out of school to launch his company (Ford, Honeycutt, & Simintiras, 2003).

The new company soon began manufacturing its own IBM-compatible computers under the name PCs Limited. Because Dell sold computers directly to users through advertisements in magazines and catalogs, the company could price its machines lower than those sold through retail stores. Sales reached nearly $6 million during the company’s first year, climbing to $34 million the following year. By 1987, Dell was the leading mail-order computer company in the United States. In that year, it created a sales force to target large corporations and began adding international offices to capture the direct-mail market outside the United States (Ford, Honeycutt, & Simintiras, 2003). While the company continued to grow rapidly; Dell experienced a series of setbacks that hurt profits. In 1990, the company began selling computers through retail stores, an effort it abandoned in 1994. In 1991, Dell launched a line of notebook computers, but quality problems and inadequate production planning forced the company to stop selling for a year. In 1994, Dell launched a new line of notebook computers and expanded efforts to increase overseas sales. Dell also began focusing on the market for servers, which used the computers to run local area networks. By the late 1990s, Dell was firmly in place as the world’s number one direct seller of computers. More than 50 percent of the company’s computer sales transactions took place via its website, which generated worldwide sales in excess of $40 million a day (Ford, Honeycutt, & Simintiras, 2003).

Information Processing Tools

Information processing or Data processing is the analysis and organization of data. It is used extensively in business, engineering, and science and an increasing extent in nearly all areas in which computers are used. Businesses use data processing for such tasks as payroll preparation, accounting, record keeping, inventory control, sales analysis, and the processing of bank and credit card account statements. Engineers and scientists use data processing for a wide variety of applications, including the processing of seismic data for oil and mineral exploration, the analysis of new product designs, the processing of satellite imagery, and the analysis of data from scientific experiments (Thierauf, 1978).

Data processing is used extensively in business, engineering, and science and to an increasing extent in nearly all areas in which computers are used. Data processing is divided into two kinds of processing: database processing and transaction processing. A database is a collection of common records that can be searched, accessed, and modified, such as bank account records, school transcripts, and income tax data. In database processing, a computerized database is used as the central source of reference data for the computations. Transaction processing refers to interaction between two computers in which one computer initiates a transaction and another computer provides the first with the data or computation required for that function. Most modern data processing uses one or more databases at one or more central sites (Thierauf, 1978).

Transaction processing is used to access and update the databases when users need to immediately view or add information; other data processing programs are used at regular intervals to provide summary reports of activity and database status. Examples of systems that involve all of these functions are automated teller machines, credit sales terminals, and airline reservation systems (Thierauf, 1978).

The information processing tools that Dell uses include computers, the internet, maps, spreadsheets, models, and databases. For the operational level of Dell, the most appropriate tool for information processing is maps. Through the said information processing tool, decisions on how to operate the organization can be initialized and made. Maps can be used to determine which country/place information will be acquired from, it can also assist in determining the demographic level of people and information will be gathered . Maps can be in the form of charts that can also provide necessary information. The information gathered in turn can assist in helping to decide how an organization will be operated. For the tactical level of Dell, the most appropriate tool for information processing is databases. Through the said information processing tool, the records that can assist in finding out the strength and weakness of the company can be used to determine the tactic that will be used by the organization. For the strategic level of Dell, the most appropriate information processing tool is the internet or World Wide Web. Through the internet, trends and strategies by other companies can be known. After analyzing the trends and strategies used by other companies, an appropriate strategy can be formulated to use by the organization.

Inventory control systems

Individual businesses need, first and foremost, an efficient inventory control system. This implies the minimum amount of inventory that will provide the consumers with what they need whenever and wherever they need it. Effectiveness of the inventory system means basically having an inventory mix that is most likely successful in satisfying consumer needs (Samli & Sirgy, 1995). The inventory control systems used by Dell is up to date and reliable to prevent problems to arise. The inventory system of Dell makes sure that anything the consumer need will be available to them at any given time. It is also what the company uses to know if certain products are still available or misuse of the inventory system may cost problems to the company.

Management information system involves the information system and the organization. Dell benefits a lot from the management information system. The system helps the company create strategies that will help the company conquer any problems and threats from competitors. The system also assists the company in processing the needed information. Management Information Systems also helps a company to create or update its inventory control system.

Recommendations

Since the MIS of a company is a vital part of its operations and its survival in the modern world, it must be well updated and it must compete well with MIS’s competitors. The MIS of a company should be created from high standards so that it can be of stiff competition against its counterparts. The MIS system should help the company to achieve its goals and assist the company in reaching its potential.

1. Comment on the MIS in Dell and suggest the positives and negatives of MIS in Dell?

2. The dell directly sells its computers to the customer whether it will give them good and reliable information or they are lacking in information system due to this move?

3. Develop the information flow diagram for dell and suggest some improvement in the same.

4. MIS is a combination of Management, Information and System otr of the three parts of the information system in which area does the Dell lacking?

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3 thoughts on “ Case Study: Management Information System at Dell ”

please publish the answers for the questions also… so that we can use for reference

Please post answers to the questions also so that we can also use it for our reference. Thanks.

Is it possible to have the answers to be used for reference please ?

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