October 03, 2008

Tim OReilly on Dell's move away from customization and flexible supply-chain.

There are two possibilities: first, that Dell is wrong, and their new supply chain approach will not save them, just make them more like everyone else. It could be that their "live suppy chain" approach just got too crufty, too complex - the article linked above suggests more than 5000 possible configurations. Maybe what they needed to do was to make the system smarter again by streamlining and simplifying.

But it's possible too that the competitive advantage to be wrung from a live enterprise only takes you so far, and that in certain circumstances other advantages are more important. It may well be that the PC market has reduced itself to such commodity status that standardization trumps customization. It may well be that the costs of physical goods mean that the laws of virtual networks are only partly true in that realm.

Worth thinking about, especially as I thought Dell should go in the opposite direction.

Update : Interesting that Dell's suggestion box Ideastorm is full of people demanding better Linux support and pricing. Guess this is a self-selecting audience, of course, but what does Dell do? Create a way of listening to customers and then not follow it for fear of M$, or follow it, and risk the wrath of M$?

PC manufacturers creating sites like this are bad news for M$ either way.

Update 2 : Why are Dell abandoning make-to-order? At one point I wondered if they're actually worrying about long distance just-in-time supply chains as the world energy prices keep going up. But it doesn't look as if that's what's going on. Or is it just a bet on cheap and standard over expensive and flexible (particularly as we go into a recession.)?

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