At a company like Dell, it's a strategic variable. Their strategy is to have the best product at the best price. But in order to have this, the supply chain must be competitive. Everybody [at Dell] is trying to reduce costs, increase flexibility, reduce inventory and get their cash more quickly. All of these drive financial performance. |
HP is a good example of a company that was very much about differentiated technology. With Dell competing with a very innovative supply chain, HP has had to remake its supply chain. |
It all depends on whether [companies] view supply chain as a strategic variable or an execution variable. |
Supply chain has to be important all the way up to the chief operating officer and chief financial officer level, because the way a company brings a product to market is on average as important as the product that they bring. |
When buying a VCR, DVD player or a PC, for example, people want the features they want, and they want them right away at a very low cost and [to] have it work well. In a more commoditized area like this, the supply chain is more critical than technology. In a highly technical area like medical equipment, the technology is more important. |