Skip to main content

Dell to Rid Itself of Factories by 2010

As Dell continues to shift business practices to embrace a changing PC market, it looks to sell its computer factories world wide.

It would appear Dell Inc. is looking to sell its computer factories in preference of outsourcing in an attempt to cut expenses. With many of Dell’s competitors, such as HP and Apple, already outsourcing production of many of their own computers, Dell seems to be simply following in suit. According to sources, Dell could be selling most or all of their computer factories within the next 18 months.

Dell currently does outsource part of its manufacturing process for many of its laptops, with just the final assembly taking place at their own factories, such as those in the United States. Although current means of production for Dell’s desktop PCs is considered efficient, falling yearly profits for Dell has forced it to reevaluate its business model to further cut costs. With manufacturing contractors being able to have greater focus on the production process, having greater specialization, and possibly having the use of an offshore labor force, the use of contractors could result in a cost savings. With rising oil prices, transportation costs are increasing as well, making manufacturing a product at fewer locations potentially cheaper. Some believe though that Dell may sell its factories to the same contractors who will continue to produce PCs for Dell.

Dell’s production strategy has also been affected by the increase in laptop sales over those of desktops in recent years. The past business of building desktop PCs for orders on-demand is being replaced by that of consumers buying a pre-configured laptop from a retail store. A switch in Dell’s business practice may result in increased profits, but Dell’s ability to continue offering customization on the level they are known for may possibly be threatened. Last December, Dell signed up Best Buy as a retail partner for the sale of Dell’s Inspiron and XPS PCs, a historical shift for the company’s business model. Many consumer purchases now are often driven by looks, rather than system specifications, giving the ability to purchase a computer in person an advantage.

  • mikeynavy1976
    Doesn't look I'll be buying a Dell ever again. The only Americans making any money on this are the very few that don't need it.
    Reply
  • Mr_Man
    mikeynavy1976Doesn't look I'll be buying a Dell ever again. The only Americans making any money on this are the very few that don't need it.Hear hear.
    Reply
  • Totally agree with you Navy man I remember here in Austin with lots of Dell layoffs and the tech bubble burst along with peoples 401k that dumped it all into Dell stock.
    Reply
  • jivdis1x
    The last time I recommend a Dell when they were Made-to-Order. After they made the move to sell them at Bestbuy ie mass production; material quality and design went down the tube. I stopped recommending them but didn't discourage someone from buying but with this news, I would.
    Reply
  • ravenware
    It would appear Dell Inc. is looking to sell its computer factories in preference of outsourcing in an attempt to cut expenses

    F@#$ Dell. More made in China/Mexico garbage.

    Who the hell are we supposed to buy office machines from now?
    This is beyond BS! HP machines are of poor quality and often have proprietary hardware making fru's hard to find or expensive. IBM sold there share over to lenovo, a company I had never even heard of before hand. I have had a handful of lenovo machines that have go down due to hardware failure too. Now Dell is in the same mix.

    You know, maybe it isn't the workers who are over paid and lazy, maybe its the CEO's and industry leaders who are too fat from stuffing cash down their fat-asses and too lazy/stupid to invent more sophisticated methods of producing and shipping products.

    So instead they opt for the old method; finding some poor shmo to do it for less and step over their own workers in the process for another buck to stuff their faces with.

    The rich get richer and the poor get poorer.

    F@#$ Dell, F@#$ them up their stupid asses.
    Reply
  • ravenware
    It would appear Dell Inc. is looking to sell its computer factories in preference of outsourcing in an attempt to cut expenses

    F@#$ Dell. More made in China/Mexico garbage.

    Who the hell are we supposed to buy office machines from now?
    This is beyond BS! HP machines are of poor quality and often have proprietary hardware making fru's hard to find or expensive. IBM sold there share over to lenovo, a company I had never even heard of before hand. I have had a handful of lenovo machines that have go down due to hardware failure too. Now Dell is in the same mix.

    You know, maybe it isn't the workers who are over paid and lazy, maybe its the CEO's and industry leaders who are too fat from stuffing cash down their fat-arses and too lazy/stupid to invent more sophisticated methods of producing and shipping products.

    So instead they opt for the old method; finding some poor shmo to do it for less and step over their own workers in the process for another buck to stuff their faces with.

    The rich get richer and the poor get poorer.

    F@#$ Dell, F@#$ them up their stupid arses.
    Reply
  • V3NOM
    i have never bought a dell and I'm never going to. i could build (and i have researched this thoroughly) a high end - crysis killing - gaming system for around $1300 not including postage thats faster than a $2000 Dell. I mean seriously, is it that hard to build your own computer? Why do people consistently buy these highly overpriced "custom built - yea right complete BS...) desktops? I rest my case.
    Reply
  • EYE
    Sadly not anybody can build their computers or are interested in, how would you build a laptop V3NOM???
    Reply
  • Many consumer purchases now are often driven by looks, rather than system specifications

    spot on.
    Reply
  • guys...stop complaining....its a global thing....buy what you like from now on and enjoy before you die....the world is changing....face it
    Reply