Friday, November 9, 2007

Direct from Dell.... (Austin, TX)

Dell has a very fascinating history, business model, and supply chain strategy and the company is well known in the computer arena. Dell has had suffered from some issues over the last few years, but overall the company's operations are solid. This Dell Plant Tour Video is a little dated, but it is still very interesting to see the general framework at the Dell factory.

I happen to have studied Dell very closely since about 2001, and I was lucky enough to attend many presentations by Dell employees (and even know several). A few things to note are that as of 2004-2006 Dell operated under the following structure:
  • Laptops are made overseas (generally in Taiwain) by ODMs and air freighted to the US. This likely is due to labor savings and the density to price ratio.
  • Dell's Topfer Manufacturing Center in Austin, TX (TMC is building PN2) assembles Desktop PCs while the building next door (PN1) builds servers.

Additionally, since this video was made many changes have been implemented at TMC:

  • Barcode scanning has been changed to RFID on the totes that move around the factory.
  • Inventory is kept low because Dell does not keep a component inventory warehouse themselves. Their components are kept at consignment warehouses next door where the suppliers own the inventory until it is pulled for a customer order.
  • The Boxing line is still performed manually in some instances, but for certain platforms the High Velocity Kitting line completes the process via automation.

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