Running head: DELL. INC CASE STUDY 1
Dell. Inc Case Study
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DELL. INC CASE STUDY 2
Dell. Inc Case Study
Why does L5 incur higher manufacturing and logistics costs than L6? What are some of
the costs that are incurred in L5, but not in L6? Are there any costs that apply to only L6
but not L5?
The logistical and manufacturing costs of L5 and L6 are dictated by various factors. First,
it is essential to explore the reasons for Dell’s use of the L5 level. An important reason is the
company’s inability to supply manufacturers with Mother Boards on time (Simchi-Levi,
Kaminsky, Simchi-Levi, and Shankar, 2008). The delay could be attributed to new practices
related to the introduction of products, forecasting, and engineering. The stakeholders involved
in the whole process are many, which render Dell prone to waste arising from too much
inventory movement (Ganguly, Chatterjee, and Rao, 2017). The resulting high costs are the
consequence of the impediment Dell faces. The comparison of costs between the L5 and L6
levels shows that L6 is more effective in eliminating the 3PI costs. It attains this by delving into
offshore integration in countries such as China, which is cheaper compared to local integration.<
Which of the six proposed manufacturing solutions should Dell implement, based on the
survey result (Table 6-1)?
The suggested solutions display an array of opportunities meant to resolve the setback.
First, identifying the task force is intended to maintain manufacturing operations such that no
changes are implemented. Other suggestions are the consent for Dell factories to execute L5 up
to L10 manufacturing activity offline, including direct management of 3PI by Dell. Also,
