Dell Plans to Sell Factories

Implications: The move is important as Dell seeks to improve results. Is the location and ownership of factories important (as part of the supply chain management) for the company? Will Dell suffer product quality issues?

Analysis: Dell's plans to seel factories is not unexpected. Given current economics and falling PC and laptop prices Dell had to seek improvement in its supply chain. Consider PC and laptop prices at $350 to $700 respectively, Dell needs to improve or retain margins. Some plants have lower cost of labor and I would expect certain plants may be retained for assembly of more complicated configurations it would be a bit surprising if all plants are sold. Perhaps this is also an indication of how Dell's move into retail is driving assembly of a smaller (and perhaps more standardized) product portfolio for consumers. If HP and others have done it without loss of product quality then Dell certainly can.

It would appear Dell's revised product line and new product pipeline should be a more important consideration.