Supply Chain Frontiers issue #2. Read all articles in this issue.
Much has been written about the importance of Dell's supply chain but there is another enabler of the company's success that tends to be overlooked: its corporate culture. A study of Dell's day-to-day operations revealed how cultural characteristics such as strong social networks play an important role in driving success at the computer maker.
The study was carried out by MIT Leaders for Manufacturing Masters student Blaine Paxton, as part of the requirements for attaining Business Administration and Science in Civil and Environmental Masters degrees.
Paxton interviewed 66 Dell employees worldwide including supervisors, managers and vice presidents. The aim was to find out how Dell operates at a fundamental level, he told attendees at the Creating and Leveraging Supply Chain Flexibility Symposium, May 24-25 2004, organized by the MIT Center for Transportation & Logistics.
Agility is at the heart of Dell's operational model. To underline the point, Paxton noted that in the last eight years the company's desktop production facility in Austin TX has been in three different buildings and the production design has changed with each move.
In 2001 the enterprise started building laptops in Nashville TN only to move production to Malaysia less than a year later. The organizational structure in Nashville has reportedly been overhauled seven times in four years.
Many companies would be traumatized by this level of change but Dell thrives on it. The organization's "never satisfied/always evolving" ethos rests on four shared beliefs explained Paxton.
The first involves an unwavering focus on immediate goals and personal accountability. "The organization almost disdained long range planning," he said. Employees keep a check on hourly production reports and attend "alignment meetings" once or twice a day. The second belief is tied to the need for flexibility and a "lending a hand" mentality, Paxton said.
The other two beliefs are still evolving, he believes. One is that leadership should be present at all levels, requiring individuals to be engaged, knowledgeable and committed. Finally, Dell workers believe in the value of personal relationships, "which is probably the most interesting (shared belief)," he said. The emphasis is on direct internal communications and relationships that enable rapid team formation and information sharing. When analyzing Dell's operations it became apparent that "the social networks are the foundation of its agility," said Paxton.
These beliefs have helped Dell avoid some of the behavioral pitfalls that more traditional companies often stumble over. "Organizations usually fight over who has the next big idea," Paxton said, but this is less likely in an environment where long range planning is relatively unimportant. Constant change deters territorialism since operational teams do not exist long enough to claim a piece of corporate turf. Clear and direct communication channels are not conducive to backstabbing.
Can other companies learn from the Dell experience? Paxton believes they can, although the lessons "are probably better for rapidly-changing industries," he said. Companies with a high tolerance to risk also can benefit, he suggested, since they can afford to experiment without incurring huge cost.
For the computer maker a notable lesson is that the culture which has grown organically within the organization is as distinctive as the Dell brand. The company's employees "told us they had a set of assumptions about how people should act, and we needed to articulate that," Paxton said.
For further information on "Creating and Leveraging Supply Chain Flexibility Symposium" presentations contact Jim Rice, Director - Integrated Supply Chain Management Program, MIT Center for Transportation & Logistics, tel: 617 258-8584, email: jrice@mit.edu.