Dell to sell?
September 7, 2008
Dell Inc. has decided to go for outsourcing in computer manufacturing quite comprehensively. If you wonder why more outsourced factories are coming up in different Asian companies, this could be the answer for you—Dell is trying to reduce its manufacturing costs. The company is trying to sell its North American factories to reduce manufacturing costs and use the services of contract manufacturers. Dell Inc. happens to be the second largest computer maker and according to the Wall Street Journal’s report on Friday, Dell is trying to sell most of its factories within the time period of one and half year.
At the outset, it sounds as a difficult plan and analysts do not see the deals closing quickly. There are many issues that would in way to reap some benefits that could be termed as reduce manufacturing costs.
The business model of Dell was quite different a few years back to what it is now—at that time, Dell concentrated on large volume corporate ordering; however, in the past few years, it has shifted its focus on retail ordering marching ahead in laptop sales. In Asian countries, Dell is making fast progress to come out as the best choice for laptops among the consumers. This is where outsourcing computer manufacturing helps Dell—it can reduce its price costs to the consumers in Asian countries.
I have been a regular user of Dell laptops and I have seen how their manufacturing standards and practices have changed within few years—they are trying to concentrate more on product development by saving manufacturing costs. Lots of people have reported that there are some issues that Dell in India is not taking care about. However, it remains to be seen how their sale deal fares in the international market.
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