Burnt Orange Report

December 23, 2004

Dell Rocks- A Merry Christmas Type of Story

By Andrew Dobbs

I categorized this as "Austin City Limits" as Dell is one of the largest employers in the Austin area, bringing in thousands of jobs and lots of revenue for our fair city (and Dell's actual home- Round Rock). I just saw this story and it brightened my day a little bit. It's good news two days before the best day of the year (IMHO).

Dell bucks the outsourcing trend

Dell's dazzlingly efficient assembly plant here may be the best hope for keeping blue-collar jobs in the United States rather than exporting them.

Inside Dell, the world's largest computer maker, executives study the assembly process with great intensity. They wheel in video equipment to examine a work team's every movement, looking for any extraneous bends or wasted twists. (...)

"When everybody is outsourcing, Dell continues to manufacture in the United States because over two decades of fine-tuning, they've figured out how to do it cheaper and smarter," said Charles Wolf, an analyst at Needham & Co. who has been following Dell since 1991. (He has also been reaping the financial rewards as a longtime Dell shareholder, seeing a 33-fold return on his investment.) "They're truly in the 21st century when it comes to manufacturing."

No other major computer maker produces computers in the United States. Long ago, Dell's top rival, Hewlett-Packard, outsourced the assembly of its PCs to third parties, primarily based in Asia, as did International Business Machines, the world's third-largest PC maker. And IBM, which created the PC market in 1981, is leaving the business, announcing this month that it is selling its PC unit to Lenovo, the Chinese computer giant.

"It's been a long time since one of our competitors actually made a computer," said Michael Dell, the founder and chairman of Dell.

His company, by contrast, operates three giant assembly plants in the United States - two in Austin and the third near Nashville, Tennessee. Each is large enough to house six contiguous football fields. Last month, the company announced that it would build a fourth plant, twice as big as the others, near Winston-Salem, North Carolina. Inside the company, executives talk about opening a fifth.

Dell's decision to expand its American manufacturing presence, however, has nothing to do with patriotism. Executives here say their decisions are based on the bottom line as well as on geography; it is simply more efficient to stamp out computer equipment closer to the customer.

Dell has run a factory in Xiamen, China, since 1998 - but to produce computer equipment that the company sells to its Asian customers. Similarly, Dell's factory in Limerick, Ireland, makes machines for Europe. This month, Dell announced that his company would probably build a second European plant soon.

Dell is also bucking global trends on another front. In an era when a call center is more likely to be in India than Indiana, the company has announced that it is building a customer assistance facility in Oklahoma City. This year, it opened a call center in Edmonton, Alberta. And while Dell's laptops are produced in Malaysia, they are built by Dell employees working inside a Dell-owned factory.

Ever since 1984, when Michael Dell began selling personal computers from his University of Texas dormitory room, his company has been able to sell cheaper PCs by cutting out the middleman, selling directly via the phone or, nowadays, the Internet. But the reason Dell continues to dominate as a low-cost leader - whether selling a PC, a server or, more recently, plasma televisions and portable music players - is its fanatical determination to save every penny it can. Dell may not quite be the Henry Ford of our time, but his company is certainly the Wal-Mart of the high-technology industry, for better or worse.

I forgot some elipses some places in there and the IHT's website is screwy so copying and pasting was weird, but read the whole thing. They produce every part of every computer sold in the US right here in the US. They have all of the US customer support right here in the US. They are creating jobs, and guess what? They are are raking in the dough. Good old fashioned business sense is trumping the reckless policies of their competitors and Austinites (not to mention Nashvillians and whatever you call people from Oklahoma City) are benefitting.

Pretty good for a guy who dropped out of the college we go (went) to...

Posted by Andrew Dobbs at December 23, 2004 11:29 AM | TrackBack

Comments

I'll be buying a laptop this week, and I'm basically considering anyone but Dell. Here was my absolutely horrific experience with them on a technical support problem in 2001.

As for Dell and outsourcing, I know at least once I was talking to a Dell tech support person in the Philippines, and probably others. At least when I used a Dell, they seemed to outsource their tech support.

Anyway, I'm happy that they support the Austin area economy, but there's no way in hell I'll ever buy another one.

Posted by: Byron_LaMasters at December 23, 2004 01:00 PM

I will never buy a Dell. Ever. I think y'all know why...

Posted by: Andrea M. at December 23, 2004 03:43 PM

No, why Andrea... I would love to hear another "Dell sucks" story in case people don't take my word for it....

Posted by: Byron_LaMasters at December 24, 2004 01:18 AM

I'll have to chime in that this BOR writer has a Dell laptop and is just fine with it. :)

Posted by: Karl-T at December 24, 2004 01:38 AM

Well good for you Karl-Thomas... I'm tempted to do a "Dell Sucks" post, but I do think that I'll abstain from it for now. It's not really worth it, but if there's another Dell is the next Jesus post from another BOR writer, I'll have to post my thoughts... ;-)

Posted by: Byron_LaMasters at December 24, 2004 02:01 AM

Michael Dell is a big time 'Phant.

What's more, when he took the top off a hill to create a palatial estate, he fought with Austin for something like 4 years to weasel out of taxes.

Screw Dell.

Posted by: Matthew Saroff at December 26, 2004 10:39 PM

Alright, so Dell computers suck- what else would you expect from something made in the U S of A? Its like an American made car- I don't drive them because they suck.

But at least a few more people won't have to worry about losing their jobs. And this has less to do with Michael Dell than with his company.

Posted by: Andrew D at December 27, 2004 10:07 AM

Ok, here's your story....

I just purchased a Dell 4700. It was a mess. Within 24 hours of receiving my brand new machine, the NIC connection died. Of course Dell would not think of having the NIC on a seperate card, but rather onboard. So after being on hold and talking to tech assistance for over 4 hours, they sent out a technician to swap the mother board (8:00am four days later).

The VERY NEXT DAY the video TV tuner card would not recognize under XP media Center (which I paid extra for from Dell) - I wrote Dell 3 e-mails and received no response. I spent another 3 hours on the phone and they didn't have the answer. The manufacturer of the card said whomever told me that that card and said it would work with Media Center, was wrong. (Guess who told me it would work - Dell).

Two days later, the DVD ROM would not refresh - it would not even recognize disks put in it. Another 2 hour phone call had me going into the registry to remove items.

I called Dell again and said I did not want this LEMON!! Give me my money back!! They convinced me to get a new 4700 Dimension and for all my trouble they would upgrade my video card to the best one they have - ATI 850 Platinum 256. Last night I checked it out and they did NOT put that card in!! They put an nvidea Rage in!!! So I spent another hour on the phone today asking "Why?". They had no reason but kept saying the ATI card would not physically fit in the machine!!

- HA! Ha! Lie #1. - all video card are universal size.
- Then they said that card was not available with the 4700. I told them it was on their web site under the 4700. They still claimed it was not avalable; so I had to tell them to go to their site, and where to click to see what cards were available - they had NO CLUE as to their own product. - and yes, there it was, right under video cards for 4700.
- Then they said the card was only available with the 3000 Dimension and it is an error on their part as to why it was on the site. So I asked: "So what you're telling me is that the best video card on the market ONLY works with your LOWEST-end machine?!?!?" and they said "Yes". I responded "Really, then why does my father have a Dell 8400 with the same bloody card in it!!?!?!? - no response.

So now I am returning the second machine and asking for my money back. The guy on the phone says I will have to pay for the return shipping on that second machine. I'll fight that one - but I will NEVER buy a Dell again.

I am also the head of an I.T. department for a school board in Ontario. We just finished fundraising to purchase a new computer lab. Guess which brand will NEVER enter our school....

Posted by: Doug at May 24, 2005 10:28 PM

I've had my Dell for seven years, haven't had any problems with it. I know plenty who purchased Dells and that is happy as I am with Dell.

Posted by: Dusty at May 28, 2005 01:29 PM

Hard to believe that a head of an IT dept has never had a computer problem before. Here's a clue, Doug. It won't be your last.

We have over 50 Dell computers in our business, operated by persons with relatively little computer skill. They seem to do quite well. We have had lemon machines from IBM, HP, Compaq, NEC, Packard Bell (don't get me started on that one...), and Toshiba.

At this point, Dell has had the best reliability, and our IT folks love the ability to download drivers and BIOS updates at will.

Am I biased ? Because two 1st degree relatives are employed by HP ? Dell smokes HP, IMHO.

Posted by: Listo at June 7, 2005 10:55 PM

News, Politics, and Fun From Deep in the Heart of Texas

December 23, 2004

Dell Rocks- A Merry Christmas Type of Story

By Andrew Dobbs