Abstract
This interview offers a deeper look inside Dell''s highly publicized success and offers managers a model of how traditional relationships in a value chain can be reconceived in the Information Age. The individual pieces of Dell Computer''s strategy--customer focus, supplier partnerships, mass customization, just-in-time manufacturing--may all be familiar. But Michael Dell''s business insight about how to combine them is highly innovative: Technology is enabling coordination across company boundaries to achieve new levels of efficiency and productivity, as well as extraordinary returns to investors. In this HBR interview, Michael Dell describes to HBR editor-at-large, Joan Magretta, how his company is achieving "virtual integration" with its customers and suppliers. Direct relationships with customers create valuable information, which in turn allows the company to coordinate its entire value chain back through manufacturing to product design. Dell describes how his company has come to achieve this tight coordination without the "drag effect" of ownership.
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Abstract
This interview offers a deeper look inside Dell''s highly publicized success and offers managers a model of how traditional relationships in a value chain can be reconceived in the Information Age. The individual pieces of Dell Computer''s strategy--customer focus, supplier partnerships, mass customization, just-in-time manufacturing--may all be familiar. But Michael Dell''s business insight about how to combine them is highly innovative: Technology is enabling coordination across company boundaries to achieve new levels of efficiency and productivity, as well as extraordinary returns to investors. In this HBR interview, Michael Dell describes to HBR editor-at-large, Joan Magretta, how his company is achieving "virtual integration" with its customers and suppliers. Direct relationships with customers create valuable information, which in turn allows the company to coordinate its entire value chain back through manufacturing to product design. Dell describes how his company has come to achieve this tight coordination without the "drag effect" of ownership.