Doubts over Dell logistics

Following Dell's public decision to work directly with resellers, distributors and some analysts have questioned whether the vendor can hit the ground running by removing an important layer of the supply chain.

Following Dell's public decision to work directly with resellers, distributors and some analysts have questioned whether the vendor can hit the ground running by removing an important layer of the supply chain.

The US giant said its BTO and logistics capabilities could underpin direct engagement with resellers and hinted it would only employ distributors in certain instances.

On the one hand, Graeme Watt, European president at Bell Micro, was not surprised by Dell's decision because distributors already had strong relationships with many of Dell's rivals.

"But resellers are looking for more than just Dell technology and going to resellers in a single tier model could limit their attraction; it will not be able to offer cross vendor technologies and solutions," he said.

The role of distribution had been "underestimated" by Dell, said Jared Cary, product channels director at Northamber: "We provide product for next day delivery, and credit and the role of distributors is taken for granted".

Credit will be provided by Dell said Josh Claman, vice president and general manager for channel EMEA: "Offering credit keeps us close to resellers so we understand their cashflow".

However, Alistair Edwards, senior analyst at Canalys, argued Dell had made a mistake.

"It is true that it has a logistics capability but that misses the real value that distributors add - holding stock for next day delivery and a more efficient logistics model".

He added Dell would also be exposed to fraud attempts or resellers going out of business: "aspects that many vendors like to hand across to distributors."

But Simon Aron, joint managing director at Eurodata Systems - which supplies Dell in response to customer demand - said apart from stock availability, he did not see a problem with Dell's decision.

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