Supply chain risk management practices are a critical aspect of responsible production and retail. Most companies in the field of technology suffer from risks of cyber-attacks, which can be mitigated through cross-checking the suppliers’ business and testing their products. Dell’s case is of particular interest in this regard, as this company is a leader in the technology market in the US and China. Dell shows a decent example of how SCRM practices should be implemented. This paper aims to consider the SCRM practice in Dell and discuss the wider perspective on the industry and potential supply chain disruptions.
Supply Chain Risk Management: Dell’s Case Analysis
Supply chain risk management is a critical element of a well-functioning business. Producers and retailers in the technology sphere can face multiple challenges when striving to provide their customers with safe and high-quality technological devices. The wider perspective in the industry suggests the risks associated with developing economies that have less mature SCRM strategies. Companies like Dell and other leaders of the market present unique and well-established approaches to controlling and managing potential risks. A responsible attitude helps these companies attract and retain more customers that show ongoing loyalty. Therefore, these strategies should be considered by tech start-ups and businesses to make the technology field more reliable and competitive.
Dell’s Supply Chain Risks
The Dell company is one of the world’s most renowned producers of technology, including computers, servers, and supplements. It has a big share in the US and Chinese markets for a good reason – the company strives to deliver reliable and safe products to its customers. However, Dell works with suppliers of some elements of their computers, such as smart microchips, which puts a considerable risk on the final consumers. To reduce this risk, the company controls the quality of the tech supplements and has developed business continuity plans for working with suppliers.
The company is also subject to the risk of cyber hacking, and to mitigate this risk it created special software to protect users. On its website, Dell describes the two main risks: “You’ve heard about the usual types of attacks – phishing emails, ransomware attacks, etc. Here’s the even scarier part…even if you practice safe email and web surfing, your device can be infected with malware before it’s even downloaded” (Bentz, 2022, para. 2). Dell explains that if the OEM’s supply chain is not secure, malicious activity can occur during the manufacturing of the computer. Noteworthy, as a business that works globally, the company can expect to experience disruptions in the supply of high-quality tech elements if it decides to enter new, less stable markets, like India, and work with local suppliers.
The Role of Business Continuity Planning
The Dell company has a well-thought-out process for managing the supply chain risks, which is presented on its website in detail. The SCRM process is developed following the business continuity planning cycle, involving maintenance, analysis, solution design, implementation, and testing and acceptance procedures. The company ensures the secure creation of products, including hardware, software, and firmware. Managing risks considers the stages of product development and the stage of supply chain control. The latter involves the work with manufacturing plants, Dell plants, component and parts suppliers, and original design manufacturer (ODM) partners. Each of these areas requires separate attention, as the supply chain is a company priority.
The business continuity planning approach helps ensure that at every stage, the risks are properly managed. This also allows for providing services according to the unique needs of customers. Quality management encompasses “assembly, software installation, functional testing, and quality control” (Bentz, 2022, para. 6). Therefore, checking partners is part of maintenance and testing, and acceptance procedures when Dell employees re-check the quality of the supplied products to avoid counterfeit and virus-infected items. To further reduce risks, part identification numbers (PPIDs) and a label with this number were developed during the implementation phase to mark high-risk components. The information in the PPID includes the part number, country of origin, date of manufacture, and supplier name. Equally important, Dell vets partner companies for reliability and accountability, and business practices.
Supply Chain Risks in the Industry
From a wider perspective, the industry players often experience uncertainties because of the entrance of new players from markets in developing countries. Scholars state that the states like China and India still do not have sufficient legislation and regulatory procedures to ensure that only original products are supplied (Sutduean et al., 2019). It is reported that “developing economies are contributing well to the global trade and are responsible for 50% of the generated global output” (Sutduean et al., 2019, p. 503). Given the growing role of emerging economies in a global supply chain, this is a disturbing trend. No less importantly, the prevalence of low-quality products can lead to supply chain disruptions.
Cybersecurity is an equally significant concern for responsible market players. The Dell company states that in 2022, 62% of network breaches occurred due to vulnerable supply chains (Bentz, 2022). In general, the industry needs to promote progress and create a positive impact on the environment, including information security. Therefore, within the framework of the above, the responsibility for the sustainable operation of technologies lies with market leaders and suppliers. A conscious attitude will be the key to global progress and interaction of companies and will lead to further development of the industry. Manufacturing and supply ethics will be critical to success in global markets.
Perspectives on Future Disruptions in Dell’s Supply Chain
As a business that works globally, the Dell company can expect to experience disruptions in the supply of high-quality tech elements if it decides to enter new, less stable markets in developing economies and work with local suppliers. Noteworthy, due to the growing development of software, the danger of cyber-attacks that will be carried out online against users of Dell technologies cannot be excluded. To prevent such attacks, the company can allocate more resources to the development of antivirus programs, focusing on cooperation with its programmers, which will allow for stronger control. Cooperation with the suppliers of antivirus software is also possible for double protection of users. Another problem that was not considered is the vulnerability of technology companies to natural disasters. Production facilities must be located in safe regions to avoid destruction due to natural disasters such as hurricanes, floods, earthquakes, and tsunamis. Global warming is also a potential threat, and most companies today are locating factories inland to avoid the effects of flooding in the decades to come.
Thus, the strategies used by Dell to ensure the safety of its supply chains were discussed. Today, the industry still experiences concerns regarding cyber security, and the potential dangers from online attacks are high. Attackers can also cause disruptions in supply chains by injecting dangerous software elements directly into technology elements purchased from suppliers. Therefore, responsible companies must implement effective supply chain risk management practices to ensure safety and a positive customer experience.
References
Bentz, T. (2022). The monster in the closet: Supply chain risk. Web.
Sutduean, J., Joemsittiprasert, W., & Jermsittiparsert, K. (2019). Uncertainty as an antecedent of the supply chain risk: Does supply chain flexibility matter in risk mitigation? Humanities & Social Sciences Reviews, 7(2), 503-509.