Dell looks outside for fulfillment help
Dell Inc., the world's second-largest PC manufacturer, is seeking proposals from third-party logistics service providers (3PLs) to manage its fulfillment centers in the Americas, according to a company source.
The move represents a significant shift in Dell's supply chain strategy and reflects a need to reposition operations to support the company's return to the retail store market. Dell abandoned that model in the mid-1990s in favor of selling directly to customers via the Internet. However, it recently returned to the retail channel in an effort to build volumes and regain market share lost to Hewlett-Packard Co., among others. Dell's three largest retail partners are Wal-Mart Stores, Best Buy, and Staples.
Dell hopes to find a 3PL specialist with a deep understanding of inventory management strategies for the retailing channel. The PC maker's direct-to-customer model eschewed finished-goods inventory in favor of pulling parts from suppliers within hours of assembly, building the finished products at its DCs, and shipping from there. Selling to retailers will require experience in managing instock inventory flow—expertise Dell believes it currently lacks.
In a statement, Dell said it has partnered with "industry leading" 3PLs in the United States to operate selected locations within its fulfillment network. If all goes well, Dell may expand its use of third parties. "We've been pleased with the capabilities offered by these providers, and we will continue to evaluate enhancing our distribution and transportation offerings through such collaborations," the statement said.
