A Great Article on DELL from the latest Forbes ASAP.....FYI....
<<WHEN WALL STREET ANALYSTS talk about the success of Dell Computer, they inevitably cite a crucial decision Michael Dell made several years ago. Says Louis Miscioscia of Lehman Brothers, "Michael Dell gets a lot of credit, but I think his best move was bringing in people who were smarter than he was." Kevin Rollins, vice chairman of Dell Computer, is a case in point. Dell hired him in 1993 as a Bain consultant to study whether the direct sales model was the right strategy for the company. Rollins' research showed room for tremendous growth and no doubt played a part in his decision to join Dell full-time in April 1996. Today he shares the office of chief executive with Michael Dell and Morton Topfer.
ASAP: What is it about the direct sales model and mass customization that has been difficult for competitors to replicate?
Rollins: It's not as simple as just having a direct sales force. It's not as simple as just having a mass customization in-plant or manufacturing methodology. It's a whole series of things in the value chain: from the way we procure, the way we develop product, the way we order and have inventory levels, and manufacturer and service support. The entire value chain has to work together to make it efficient and effective.
ASAP: What is the competition looking at?
Rollins: So many of our competitors are really looking at our business and saying "Oh, it's the asset management model-seven days of inventory. That's what we're going to do," rather than looking at every one of 10 things and replicating those.
ASAP: How does Dell stay dynamic?
Rollins: When we see something changing, we say, "What is the data?" Data-driven analysis and order and discipline were what helped Dell figure out where it should be and where we are going. We've got 20% of our business today on the Internet. So how much do we want? We want all of it on the Internet. We want to push that as far as it can go.
ASAP: What mechanisms do you have in place to make sure the next Internet doesn't sneak up on you?
Rollins: We're scouring for anything that could come up and bite us. In fact, we ask ourselves all the time, "What is our greatest fear?" Whenever we find something, we try to figure out how we can embrace it. [An example is] services. And the delivery of a perfect product all the time. In our business, nobody does that very well. We see this huge gap between what we do and what we think the customer wants. Anybody who would come along and do any of those things better, faster, or in a new manner could maybe out-Dell Dell. So we are constantly paranoid. We believe what Andy [Grove] said kind of jokingly-only the paranoid survive.
ASAP: So Dell isn't saying it has all the pieces in a row and the model is working fine? Rollins: We are challenging our people: "What if X went away? What if you had to cut your costs in half?" When we come up with the answers to those questions, we start developing little business models. If some look reasonable, we charter a team. ASAP: What drives the future of Dell?
Rollins: We think we have four engines of growth: geographic expansion, product, the Internet, and services. Those are the core areas we're pushing for the company.
—Interview by Rodes Fishburne >>
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