Dell Inventory Essay

The just-in-time (JIT) armoury method is a method of inventory management. The purpose of these concepts, contrary to popular belief, is not to reduce inventory, although thats an appealing array benefit. Instead, JIT (like its imitators) is a continual process aimed at eliminating waste and solving problems throughout the supply chain (Minahan, 1997, p. 45). Since its inception in 1984, dingle Corporation, Inc. has set itself unconnected from competitors through innovation and creativity.The attach to routines the JIT method of inventory management. Many businesses use Dells success as a business model. Dells sales concept focuses on meeting the needs of its customers and twist computers to order, selling them directly to the customer. This direct business model eliminates retailers that add unnecessary time and cost, or can diminish Dells understanding of customer expectations.The direct model allows the company to build every schema to order and offer customers powerful , richly-configured systems at competitive prices (Dell, 2007, 1). In executing this great deal Dell has leveraged effectively its human capital to drive growth and instigant loyalty. Dell has been very successful with this model as a result, the company carries low overhead cost by keeping inventory add up low. Prior to adopting the JIT method, Dell struggled with managing finances. After implementing JIT, the company saw a Brobdingnagian progression in inventory turnover and a reduction in the number of days worth of inventory on hand.The company achieved improvement by only placing orders with suppliers when needed. Placing orders JIT eliminates carrying costs associated with managing inventory. Table one reflects the continued reduction, demonstrate 5.7 days of inventory on hand in 2001 and 3.4 days of inventory on hand in 2004 (Morningstar, 2010). Annual inventory turnover increase from 64.3 in 2001 to 107.1 in 2004 (Morningstar, 2010).