Shayne Myhand, the day-shift manager of Dell's flagship factory here, does a lot of chaperoning. As many as four or five times a day, he finds himself playing host to corporate chieftains and midlevel scouts who come to marvel at the dazzlingly efficient assembly plant that may be the best hope for keeping blue-collar jobs in the US rather than exporting them to the Far East.
A 31-year-old with a crisp, military-like bearing, Myhand begins each tour the same way, moving to a display case and grabbing an unimpressive wooden plaque commemorating Dell's production of 49,269 personal computers in the last three months of 1991.
PHOTO: THE NEW YORK TIMES
"On a good day, during peak demand, we'll exceed that number by lunchtime," he said, with a slight nod and a faint smile gracing his lips.
He told a visitor that even now, during the Christmas season rush, an order that hits the factory floor at 9am is typically stacked in the back of a truck motoring down an interstate highway by 1pm.
Inside Dell, the world's largest computer maker, executives study the assembly process with the intensity of Alfred Kinsey and his researchers. They wheel in video equipment to examine a work team's every movement, looking for any extraneous bends or wasted twists. Designers give one another high-fives for eliminating even a single screw from a product, because that represents a saving of roughly 4 seconds per machine built -- the time they've calculated it takes an employee, on average, to use the pneumatic screwdriver dangling above his or her head.
Computer software clocks the assembly-line performance of workers, whether they're putting together PCs or the servers and storage equipment that Dell sells to large companies. The most able are declared "master builders" and then videotaped so that others may watch and learn. The weak are told that it takes a special set of talents to cut it on the Dell factory floor -- and shown the door.
Steely-eyed cold, to be sure, but at a time when economists and politicians fret over the future of US manufacturing, Dell isn't just defying a global trend, it's helping to set the standard.
"When everybody is outsourcing -- 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," Wolf said.
No other major computer maker produces computers in the US. Long ago, Dell's top rival, Hewlett-Packard, outsourced assembly of its PCs to third parties, primarily based in Asia, as did IBM, 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 was 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 the company that bears his name.
Dell, by contrast, operates three giant assembly plants in the US -- two in Austin and the third outside Nashville. 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. And, inside the company, executives talk about opening a fifth one, probably in Nevada, where it would build computers according to each customer's specifications. At a White House conference on the economy on Wednesday, Kevin Rollins, Dell's chief executive, said that the company makes all of its desktop computers right here in the US.
"None is outsourced; none is made in other countries and shipped in," he said.
Dell's decision to expand its US 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.
"The reason we continue to manufacture in the United States is that it's the optimal place to do so, and we can do it most cost effectively," said John Hamlin, who oversees Dell's entire consumer line.
Few rivals know that better than Lenovo itself. The questions that many analysts have been asking in the wake of the IBM deal is how well Lenovo, based in Beijing, can compete with Dell outside of China, given how cheaply Dell can make its machines.
Dell has run a factory in Xiamen, China, since 1998 -- but that's 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 sometime 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 new customer assistance facility in Oklahoma City. Earlier 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.
"I tell employees all the time that we're in a race on costs," said Dick Hunter, who, as the Dell executive who oversees manufacturing in the US, is Myhand's boss.
"When we lose the race on costs to Asia or wherever, that puts our own security in jeopardy," Hunter said.
Ever since 1984, when Michael Dell began selling personal computers from his University of Texas dorm 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.
‘NO SECURITY RISK’: The Railway Bureau reassured the public that the technicians’ activities were limited to technical guidance and did not involve sensitive systems The Railway Bureau yesterday said it had invited eight Chinese technicians to assist with an airport MRT construction project. The bureau issued the confirmation after an Internet user said Chinese nationals had entered the construction zone of Taiwan Taoyuan International Airport’s Terminal 3 project. They asked why “individuals from an enemy state” were allowed access to such a major national infrastructure project, which raised serious concerns over Taiwan’s industrial safety, sensitive systems and information security. The bureau’s Northern Region Engineering Branch Office said subcontractor Taiwan Handle Industrial Co (台灣手把工業) of the Taoyuan airport MRT’s “Contract No. CU05 Project A14 Station Civil, MEP &
A US uncrewed surface vessel (USV) encountered multiple Chinese warships during an autonomous transit of the Taiwan Strait, US defense company Seasats said in a statement on Wednesday. Seasats announced that a Lightfish USV had completed the first autonomous transit of the Taiwan Strait. Over five days, the USV traversed the entire length of the Strait while constantly monitoring surface vessel traffic, the company said. The Lightfish encountered multiple Chinese warships, one of which was a Chinese People’s Liberation Army Navy (PLAN) Type 056 corvette, it said. The Chinese vessels were operating “well within Taiwan’s exclusive economic zone without transmitting their identity via the
‘BOOMING’: ’ The number of partners we have here is incredible. You can see from their stock prices. They’re doing so well, they’re so happy,’ Jensen Huang said Nvidia Corp’s spending in Taiwan has ballooned to about US$150 billion a year, 10 times the US$10 billion to US$15 billion the company spent five years ago, Nvidia chief executive officer Jensen Huang (黃仁勳) said yesterday, suggesting Taiwan’s strategic importance in the global artificial intelligence (AI) supply chain. “Taiwan is the epicenter of the AI revolution. This is where the chips come, packaging comes. This is where the systems are made. This is where AI supercomputers were created,” Huang said at a meeting for the company’s employees in Beitou-Shilin Technology Park (北投士林科技園區) in Taipei, the planned site of Nvidia’s Taipei headquarters. “Taiwan
GREATER REACH? Auto parts and wood products would face tariffs of up to 15%, matching those targeting the EU, Japan and South Korea, Vice Premier said The US has announced that preferential tariff treatment for Taiwan’s non-semiconductor Section 232 goods would take effect retroactively from May 1, the Executive Yuan said yesterday. The US government yesterday posted a notice on the Federal Register’s public inspection Web site previewing tariff concessions for Taiwan under a memorandum of understanding (MOU) on Taiwan-US investment after two months of negotiations. The MOU signed on Jan. 15 stipulated three major preferential tariff arrangements: a 15 percent “reciprocal” tariff rate for Taiwan without stacking most-favored nation (MFN) rates; preferential Section 232 treatment for semiconductors and related products; and preferential Section 232 treatment for non-semiconductor
RSS