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Supply chain management profits Dell

Better supply chain management has contributed to a huge increase in profit at Dell, as its first-quarter results statement revealed a 177% increase to $945m.

Dell said that strong demand from the corporate sector had outweighed weaknesses in the consumer sector and that profit margins had improved across the board, thanks to better processes and lower input prices. However, the company also pinned a lot of the improvement on improved supply chain management.

The importance of cost control at companies such as Dell cannot be underestimated because of the wafer-like margins they operate to, which on the consumer side had increased to 4.5%. "Keys to the progress included new, simplified brand strategy in improved products, a shift to higher value products, a better mix of profitable retail and structural and component cost improvements in our supply chain," said Dell's chief financial officer Brian Gladden.

Gladden also spoke about the role procurement had in the improvement of the company's client, desktop and mobility business. "That would not have been possible without [the] concerted efforts of our procurement, global operations, product organisations to reduce cost across the value chain and [simplify and] improve our product offerings," said Gladden.