Can You Really Buy An American PC?
Yes you can, it depends on what you mean by “American.” Dell has always built desktop PC’s and servers here in the U.S. By “built”, I mean “assembled”, as all of the components are made in Asia.
Dell has long resisted the appeal of cheap labor in Mexico (physically not far from Austin) and has kept building PC’s in Austin. In fact, they built newer factories in Nashville and North Carolina. Laptops are primarily built and shipped from Asia, but PC’s and servers are 1) more customizable and 2) more expensive to ship quickly. So, it makes sense to build them here. Unless you’re HP (more on that later).
Even that said, it’s probably considered big news in the industry that Gateway is building a new factory, also in Nashville.
A Gateway person said:
“”When we locate, we want to locate on the most efficient logistics supply chain location possible,” Riggs said. “Logistics is a much bigger deal than even labor costs. So the center for manufacturing really needs to be the closest proximity to the customer base. In that standpoint, Nashville is a better center of gravity.”
Gateway had tried American manufacturing when they started:
“Gateway’s Bruce Riggs, senior vice president of operations, admits that operating costs are higher in the U.S. than they would be if Gateway manufactured in Asia, but the company believes it’s worth another try. Gateway has had manufacturing facilities in South Dakota, Utah and Virginia, all of which are currently closed.”
Sure “operational costs” are higher, most likely defined as labor, which is a small percentage of a PC’s costs. The “touch time” to build a PC is a matter of minutes. There’s not much labor involved, even with PC’s being built by hand on an assembly line.
But, Gateway is correctly seeing that there’s more at stake than operational costs. If you consider “total cost”, including logistics and shipping costs, the U.S. makes more sense. If you consider the value of being close to your customers and being able to ship custom PC’s within 5 days (as Dell does), China is less appealing. You can’t economically get a large desktop PC from China to the U.S. in 5 days. Gateway used to follow the Dell model, then they got reliant on pushing PC’s to retailers, which then led them down the “cheap labor” route.
Another competitor, Hewlett Packard, was amazingly weasel-like in their refusal to comment:
“Representatives from Hewlett-Packard said that they do have factories in the U.S., but declined to say where and whether those factories make actual computers or other electronics.”
So maybe by “factory”, they mean a place where returns are processed? I’ve read other places that 100% of HP’s desktops are built in Asia. They’re built using a non-lean “push” model, where machines are built based off of long-term forecasts and are pushed to retailers like Best Buy. This practice might look cheaper (on labor), but there’s inevitable waste when HP builds (I mean, pays others to build) products that customers don’t want. We call that the “Waste of Overproduction” in the lean terminology.
Is your company doing like Gateway or HP? I think the Dell and Gateway approach is clearly the more “lean” way to go.
Here’s an interesting American-based competitor: “Union Built PC” company. If you are working on lean in a union shop, maybe you can build some goodwill by buying PC’s from them? Don’t consider this an endorsement, but I find it interesting that they wrap themselves around a union-driven marketing strategy.