Comments on: Dell Gives Up on Manufacturing? http://www.leanblog.org/2008/09/dell-gives-up-on-manufacturing/ Mark Graban's leanblog.org - Lean Healthcare, Lean Thinking, Lean Manufacturing, Toyota Production System Thu, 09 Feb 2012 22:59:58 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Karthik Chandramouli http://www.leanblog.org/2008/09/dell-gives-up-on-manufacturing/#comment-3968 Karthik Chandramouli Tue, 09 Sep 2008 20:10:00 +0000 http://leanblog.bigbigdesign.net/2008/09/dell-gives-up-on-manufacturing/#comment-3968 Here's a quote from another related article that I find ridiculous:<br/><br/>"Contract manufacturers can generally produce PCs for less money because their entire operations are focused on finding production efficiencies, as opposed to large firms like Dell, which must balance marketing and other considerations."<br/><br/>The absurd fallacy of outsourcing is that your "partner" has more motivation, focus, and capability to reduce cost and improve quality than you do.<br/><br/>The conventional Wall Street perspective is that the only good companies are ones that have a singular focus -- and that companies can't be great at more than one thing.<br/><br/>It's pathetic when suppliers must be responsible for uncovering production efficiencies, and Dell senior management can't devote the energy and resources to see this through.<br/><br/>Dell will continue on a downward trajectory because supply chain execution is viewed as a zero-sum game with design innovation, customer intimacy, etc..<br/><br/>Contrast this view:<br/>http://www.reuters.com/article/marketsNews/idINBNG8439520080905?rpc=44&pageNumber=3&virtualBrandChannel=0&sp=true<br/><br/>with another view from McKinsey ("Time to Rethink Offshoring"):<br/><br/>http://www.mckinseyquarterly.com/Time_to_rethink_offshoring_2190_abstract Here's a quote from another related article that I find ridiculous:

"Contract manufacturers can generally produce PCs for less money because their entire operations are focused on finding production efficiencies, as opposed to large firms like Dell, which must balance marketing and other considerations."

The absurd fallacy of outsourcing is that your "partner" has more motivation, focus, and capability to reduce cost and improve quality than you do.

The conventional Wall Street perspective is that the only good companies are ones that have a singular focus — and that companies can't be great at more than one thing.

It's pathetic when suppliers must be responsible for uncovering production efficiencies, and Dell senior management can't devote the energy and resources to see this through.

Dell will continue on a downward trajectory because supply chain execution is viewed as a zero-sum game with design innovation, customer intimacy, etc..

Contrast this view:
http://www.reuters.com/article/marketsNews/idINBNG8439520080905?rpc=44&pageNumber=3&virtualBrandChannel=0&sp=true

with another view from McKinsey ("Time to Rethink Offshoring"):

http://www.mckinseyquarterly.com/Time_to_rethink_offshoring_2190_abstract

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]]> By: Anonymous http://www.leanblog.org/2008/09/dell-gives-up-on-manufacturing/#comment-3961 Anonymous Mon, 08 Sep 2008 22:02:00 +0000 http://leanblog.bigbigdesign.net/2008/09/dell-gives-up-on-manufacturing/#comment-3961 IBM still builds most of their higher-end servers and mainframes in the US. PC's are long gone with the sale to Lenovo.<br/><br/>Oh and by the way, they never had all those layoff's predicted last year. That would be a good point to reflect on...as I recall a highly critical blog post about them here on the Leanblog ;-). In the end, from my point of view, Lean at IBM has probably saved jobs, not slashed them. IBM still builds most of their higher-end servers and mainframes in the US. PC’s are long gone with the sale to Lenovo.

Oh and by the way, they never had all those layoff’s predicted last year. That would be a good point to reflect on…as I recall a highly critical blog post about them here on the Leanblog ;-). In the end, from my point of view, Lean at IBM has probably saved jobs, not slashed them.

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]]> By: Andy Wagner http://www.leanblog.org/2008/09/dell-gives-up-on-manufacturing/#comment-3957 Andy Wagner Sun, 07 Sep 2008 20:12:00 +0000 http://leanblog.bigbigdesign.net/2008/09/dell-gives-up-on-manufacturing/#comment-3957 Mark,<br/>I think you're right on in suspecting Dell will be a flash in the pan company. Their unique competitive advantage was their customization and quick delivery of what was otherwise a commodity product. They do not design a unique product, ala Apple and will not be successful pretending to be like Apple. PCs are commodities. Without the advantages of good customer service and rapid custom delivery, why by from Dell? Mark,
I think you’re right on in suspecting Dell will be a flash in the pan company. Their unique competitive advantage was their customization and quick delivery of what was otherwise a commodity product. They do not design a unique product, ala Apple and will not be successful pretending to be like Apple. PCs are commodities. Without the advantages of good customer service and rapid custom delivery, why by from Dell?

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]]> By: Mark Graban http://www.leanblog.org/2008/09/dell-gives-up-on-manufacturing/#comment-3956 Mark Graban Sun, 07 Sep 2008 11:19:00 +0000 http://leanblog.bigbigdesign.net/2008/09/dell-gives-up-on-manufacturing/#comment-3956 There are always local PC builders. Plus there's a company called Union Built PC's that are built in the US:<br/><br/>http://www.unionbuiltpc.com/home.php<br/><br/>I've never used them, so can't endorse them, but that's one option at least. There are always local PC builders. Plus there’s a company called Union Built PC’s that are built in the US:

http://www.unionbuiltpc.com/home.php

I’ve never used them, so can’t endorse them, but that’s one option at least.

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]]> By: WhyBuyMadeInUSA.com http://www.leanblog.org/2008/09/dell-gives-up-on-manufacturing/#comment-3955 WhyBuyMadeInUSA.com Sun, 07 Sep 2008 04:36:00 +0000 http://leanblog.bigbigdesign.net/2008/09/dell-gives-up-on-manufacturing/#comment-3955 Now that Dell is closing factories in the United States, are there any other major computer manufacturers that assemble computers in the states? Now that Dell is closing factories in the United States, are there any other major computer manufacturers that assemble computers in the states?

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]]> By: Jayadeep(JDP) http://www.leanblog.org/2008/09/dell-gives-up-on-manufacturing/#comment-3953 Jayadeep(JDP) Sun, 07 Sep 2008 02:49:00 +0000 http://leanblog.bigbigdesign.net/2008/09/dell-gives-up-on-manufacturing/#comment-3953 While I was impressed with Michael Dell's Direct from Dell book on their use of Lean methods, as you rightly say, Dell is NOT a lean company. How else can a lean company move their customer support functions blindly to a low cost region to cut costs and get into trouble with customers ? Not just respect for people, they didn't care about customers as well. While I was impressed with Michael Dell’s Direct from Dell book on their use of Lean methods, as you rightly say, Dell is NOT a lean company. How else can a lean company move their customer support functions blindly to a low cost region to cut costs and get into trouble with customers ? Not just respect for people, they didn’t care about customers as well.

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]]> By: Former Dell Employee, Now a Professor http://www.leanblog.org/2008/09/dell-gives-up-on-manufacturing/#comment-3950 Former Dell Employee, Now a Professor Sat, 06 Sep 2008 19:11:00 +0000 http://leanblog.bigbigdesign.net/2008/09/dell-gives-up-on-manufacturing/#comment-3950 I'm not one to pin blame on people, but Dell's problems, I believe, come from poor leadership (I know you know this already). <br/><br/>Here's the root cause: hiring a career consultant like Rollins to be co-ceo of Dell is a problem -- people from Bain who know almost nothing about running a business suddenly find themselves running a business and POOF! The business fails. <br/><br/>Never hire a Bain consultant to a leadership position in a company. White Board consulting is not a good background for effective, visionary, and inspirational market leadership. I’m not one to pin blame on people, but Dell’s problems, I believe, come from poor leadership (I know you know this already).

Here’s the root cause: hiring a career consultant like Rollins to be co-ceo of Dell is a problem — people from Bain who know almost nothing about running a business suddenly find themselves running a business and POOF! The business fails.

Never hire a Bain consultant to a leadership position in a company. White Board consulting is not a good background for effective, visionary, and inspirational market leadership.

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]]> By: Jon Miller http://www.leanblog.org/2008/09/dell-gives-up-on-manufacturing/#comment-3949 Jon Miller Sat, 06 Sep 2008 14:58:00 +0000 http://leanblog.bigbigdesign.net/2008/09/dell-gives-up-on-manufacturing/#comment-3949 Points well made Mark. I echo yours. Farewell, Dell. Points well made Mark. I echo yours. Farewell, Dell.

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]]> By: Mark Graban http://www.leanblog.org/2008/09/dell-gives-up-on-manufacturing/#comment-3948 Mark Graban Sat, 06 Sep 2008 13:40:00 +0000 http://leanblog.bigbigdesign.net/2008/09/dell-gives-up-on-manufacturing/#comment-3948 From the local Austin paper:<br/><br/><a HREF="http://www.statesman.com/business/content/business/stories/technology/09/06/0906dell.html" REL="nofollow">LINK</a> From the local Austin paper:

LINK

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