Dell Abandons Its Customization Roots 372
LiveFreeOrDieInTheGo writes "Dell intends to scale back its build-to-order service model, while increasing sales of prepackaged systems. The goal: $3B USD savings by 2011. The downside: customers expect Dell to build-to-order. The deeper downside: Dell will outsource more production and assembly."
In other news... (Score:5, Funny)
Re: (Score:2, Interesting)
Re: (Score:3, Interesting)
HP is back to producing again instead of in-fighting.
.
Re:In other news... (Score:5, Insightful)
stonemasons, i swear it has to be something of that kind that allows completely useless people to run these companys.
Re:In other news... (Score:5, Funny)
Re:In other news... (Score:5, Funny)
Re:In other news... (Score:5, Funny)
"Who holds back the electric car?
Who makes Carly Fiorina a CEO?
We do! We do!"
Re:In other news... (Score:5, Insightful)
It's a kind of narcissism to believe that it takes these special people to run your company, you have to get just the right person, someone who's done it before, even if they were a spectacular failure. Besides, look at the severance packages.. the companies must have believed in them to offer them that much...
But it's not all that different from the idea of the box-office superstar. As if only a few people making $20million a picture are capable of making good films. Precisely when it's just the opposite: a movie star will get people in the seats opening night, and maybe save a poor film, but a good movie will get people in the seats five weeks later and establish the body puppets associated with it as "movie stars."
Anyway, my point is that there are talented, capable people waiting in the wings in every field, and you might just be able to get great performance *and* save on salaries by expanding the scope of your talent search. I hope you're listening, shareholders meetings and Hollywood producers.
Re:In other news... (Score:4, Insightful)
Sounds good in theory but I don't think that's quite how it works. Even CEOs who would be considered to have failed end up being hired pretty easily somewhere else. The way CEO performance is measured goes like this. When the company the CEO is heading does well, the CEO gets the credit. When the company the CEO is heading goes down the tubes, there's an excuse like "bad economic climate", "piracy" or something else.
After quitting or being fired from their previous position they are hired with little regard to what their previous performance was because there's always an excuse. Ok, if a CEO does something mind boggingly stupid that will probably have some impact. But run-of-the-mill poor performance won't be enough to make them unemployable.
I agree with most of your point except that I don't think the rationale used by the board in case of failure would be "the CEO was successful at company X so we had a good reason to hire him." I think the rationale is more like "the CEO was labeled with the sacred seal of corporate infallibility, the three-letter acronym "CEO", so we had a good reason to hire him."
Heh... I guess I'm more cynical or something.
Re: (Score:3, Interesting)
You couldn't have hit it more on the head if you had a laser guiding you. That's precisely the BS a former employer of mine fed the staff. Then, when the company nearly went bankrupt, she sold it off. And of course, she had the hot ticket in her purse - an MBA. Two months later she was back at work for an
Re:In other news... (Score:5, Insightful)
The way CEO performance is measured goes like this. When the company the CEO is heading does well, the CEO gets the credit. When the company the CEO is heading goes down the tubes, there's an excuse like "bad economic climate", "piracy" or something else.
Exactly. It's the same as religion:
Things go well - Praise the Lord ! Without him we'd all be fucked.
Things go badly - it's part of his "greater plan" or "we weren't worthy" or some other such bullshit.
Re: (Score:3, Interesting)
If enough of the right people make money during a CEOs tenure, there is no reason not to use him or her elsewhere.
Companies can be used as throwaways in a larger war (SCO) or be sucked dry and discarded. Those with enough money can always whip up a new company if needed.
Of course, since companies and workers don't matter, that eliminates any reason for worker loyalty. Scam what you can and fuck them bef
Re: (Score:3, Funny)
Did you mean Ross Perot? He ran in 1992, and was best known for being fucking batshit crazy, besides rich.
Re: (Score:3, Insightful)
While many were, there are a significant number that weren't. Apple for example - Woz certainly is a tech guy but not an engineer and Jobs certainly isn't one.
Many great companies have been driven to destruction by control freak managers with zero ability to know technology.
Understanding technology (in an engineering sense) is not necessarily a requirement to do well at running a tech company; I think understanding technology's
Re:In other news... (Score:4, Informative)
I think the reason these numbskulls get the big packages is because they are slick enough to be able to legally prove they did their jobs carrying out the will of the majority of the board of directors. Pass the blame, collect the buck. In the few instances where I had inside information on the departure of upper management, the concensus was that it was cheaper to pay them to leave than to force them out. A protracted legal battle airing the dirty laundry is bad for stock value.
Re: (Score:3, Funny)
Re: (Score:3, Insightful)
The Dell brand is primarily going to be 'standard' home user and the corporate market. There's not a huge amount of customization needed there.
For the gamer who wants to customize a system, but not build it from scratch, there's the Dell subsidiary Alienware.
Re: (Score:3, Insightful)
Actually a premium case and some glowy bits don't add that much to the bill at all.
Typical kneejerk business move... (Score:4, Insightful)
The 'fix' doesn't seem to be the solution to the highlighted problem... sure it'll save you money in the short term, but no gains in share there at all. Less customization is never going to make a punter go "oh, I'll buy that because it's not as customizable".
Add to that the outsourcing of manufacture and it all looks like a world of hurt waiting to happen.
*baffled*
Re: (Score:2)
Re: (Score:2)
Hardly. (Score:5, Insightful)
Their reputation.
Most likely, they will move their call centers out of India and into a lower paying 3rd world country. The lower techs will be given even less latitude to help fix problems. Along with that, they will reduce access (and numbers) of higher up support, along with "new policies" of the 'not our fault' game.
They will obviously cut their unprofitable programs, such as their IdeaStorms website, all Linux support for low and middle tiers, along with the cheaper customizable options. They will leave customizing available for the higher packages, as all businesses cater to the big spenders.
Yes, our system is based upon a race to the bottom, but depending how you get there means if you survive or not. That really depends on how their deals with Microsoft go, as they are parasites upon MS.
Outsourcing Gets a Bad Rap, Race to the Top (Score:4, Insightful)
Outsourcing is a good thing for the economy, not a bad thing. If Ford did not outsource, for example, it would have to make everything from the drills for the oil, the refineries for the gasoline, the machines to make the steel and the chips and the plastic, really, recreate the entire economy and in doing so lose the efficiencies that come with shared costs. We can lament outsourcing of some function at a company, to make ourselves feel good, but, if there were no outsourcing, there would be no cars, no tvs, computers, or any of the millions of products, in all their choice and complexity, because those products would not exist without outsourcing.
We ourselves, each and everyone one of us, outsource all of the time. Go ahead can say Dell is terrible because they outsourced a call center to India or the Philippines, but we outsource every time we use a stapler or a printer, or for that matter, even a computer. How many developers recommend using MySql or Postgres or even Linux over some solution developed in-house. That is outsourcing too, and without that outsourcing, it is very likely that there would be less jobs and more economic stagnation. Few products have the margin or merit to justify the creation of a custom database server or operating system solely for them.
In that vein, outsourcing a call center might actually result in -better- customer service. If a place in India has 200,000 people answering the phones, they are going to get the economies of scale that even Dell could not possibly get.
Outsourcing actually -creates- opportunity. Any time you see more than one company engaged in a similar practice, that is an opportunity for a product or a service than can be outsourced to someone else, and that person might as well be you. If outsourcing did not exist, then, there would be no opportunity, the companies that could have benefited from outsourcing would stagnate, and products would remain more expensive, rather than less.
Bottom line is, outsourcing is a good deal, rather than a bad once, and the dramatic increase in the standard of living in much of the world - from the skyscrapers in China, the surge of wealth in India, to the internet of south korea and the massive works in Dubai, the world is getting richer and better off for it. Even in the USA, where outsourcing has been the subject of much debate, everyone has benefited from outsourcing.
Re:Outsourcing Gets a Bad Rap, Race to the Top (Score:4, Insightful)
Along with China, India was also brought forth as a manufacturing country. Now, it appears they are too expensive, and our companies are off for cheaper places. Now, it is not arguable that China and India benefit from our presence. They do, however, is it advantageous that we put ourselves at a distance in terms to create?
I know where the USA wants to go towards: the brain of the world. Intellectual Property Capitol. Except they do this by selling off what got us here: our very industry to create. How would we do a Manhattan Project without every country knowing now? Buy this kit from this country, that kit from that country...
Re: (Score:3, Insightful)
We outsource car production, computer production, etc. Heck, we don't even make our own offshore drilling rigs to drill for oil so we can get petroleum that we can use to make plastic to make little spoons.
It wasn't always like this. A couple of hundred years ago, we manufactured almost everything we needed right here. Everyone was employed.
In fact, there
Re: (Score:3, Insightful)
I'm tired of all those a-holes from Bolingbrook, Il stealing jobs from Woodridge, Il. Why it is a race to the bottom.
And my employer is in Lemont, Il and is playing a simple wage arbitrage game.
I demand that Woodridge, Il shut its borders and stop exporting jobs to Bolingbrook and Lemont.
We should have an Ikea here in Woodridge. And an Amoco station so we don't spend Woodridge wealth in Darien,Il.
We should also
Re: (Score:2)
Next thing you know, you'll suggest that people trade only when it benefits them and hence the local economy.
We don't take kindly to economic truths and common sense around here.
Re: (Score:2)
That would make Ford a vertical monopoly. That is not allowed in the US. To take your example to its furthest conclusion - Ford would require only Ford brand tires on each Ford car wheel, Ford brand motor oil in
Re:Outsourcing Gets a Bad Rap, Race to the Top (Score:5, Insightful)
Poppycock. It's one thing to outsource things that aren't your core business, I mean, those not in the stapler business shouldn't be making staplers. But if you're in the stapler business and you outsource the manufacturing, assembly, and support of staplers, then exactly what IS your business? What opportunity does that get you? You've mostly switched the business from being a manufacturer to a distributor. Assuming the distribution hasn't been outsourced. Maybe Dell is becoming just a retailer. All this sounds like is getting rid of your business and painting yourself into a corner.
Re: (Score:2, Insightful)
Re: (Score:3, Insightful)
Use "offshoring" to refer to "foreign trade, especially between vastly unequal economies". That's not what "outsourcing" means, and it's silly to accuse people of redefining a word they're using correctly.
Re: (Score:3, Interesting)
Re:Outsourcing Gets a Bad Rap, Race to the Top (Score:4, Insightful)
I'm sorry, but I respectfully disagree with you. Outsourcing is a very bad deal. While it has the allure of temporarily deflating the cost of goods and services, it is, in the end, a direct assault on the lower and middle class. Because companies can now outsource to other nations without such pesky problems as labor laws or a living wage, we are quickly seeing the working class gains of the last few decades evaporate.
Re: (Score:3, Insightful)
As a data center operator that buys dell.... (Score:2)
Re: (Score:2)
Ahem... IBM doesn't make PCs anymore.
Re:As a data center operator that buys dell.... (Score:4, Insightful)
Anyone can build and sell a server - supporting it is where the company wins or loses.
I call IBM at 3am when a server up and dies. Tech is onsite in two hours, new parts arrive 45 mins later... a bad power regulator fried all 16 sticks of ram. They didn't have enough on hand, so three other couriers were dispatch from two other states with more than enough ram to get the server up and running.
Three hours later the box was back up.
Dell - will argue to the enth degree about predicted drive failures alarms from their raid controllers... we just call them dead now so they'll send replacements. The drives take about two days to show up which is about enough time for the drive to finally fail.
software is easier to "customize" than hardware (Score:2, Insightful)
Re: (Score:2)
Outsource more manufacturing? (Score:5, Informative)
Dell already outsources just about all their manufacturing. All that will happen here is that now they can streamline the supply pipeline because they only ship x different configs instead of 100x. Less work at the (already) outsourced supplier/contract manufacturer, less work on the order fulfillment side.
How it's going to save 3 billion, I don't know. I think they're aiming a little high. Expect support to be outsourced to even crappier Indian call centers....
Re: (Score:2)
Could have been worse (Score:3, Funny)
A current "Dell House" (Score:5, Insightful)
Re: (Score:2)
Re: (Score:2)
Re: (Score:2)
Re: (Score:2)
Alienware != Dell (Score:4, Informative)
My wife recently bought a nice (though low-end, by Alienware standards) desktop computer from them. Though the ordering screens are similar (as well they should be - Dell's web-based ordering is rather slick), and credit for both companies is through Dell Financial Services, the similarities ends there.
The Alienware case is a regular ATX case, with a regular ATX backplate and regular ATX mounting holes, and is large enough to accept bloody any motherboard, whereas Dell uses a strange-ish quasi-Micro ATX design without a removable backplate. The motherboard itself is an off-the-shelf model (Foxconn, in this case), not some weird Dell special. The front panel connectors (including those for the large number of fancy LEDs) are compatible with regular ATX boards, instead of Dell's non-standard monolithic connector. There's a plethora of drive bays, with all of the hardware needed to use them included, whereas Dell seems to take great joy in including only as much hardware as is needed to assemble that particular system (on the low end of things, at least - Dimension 2350 and 2400 machines have provision to hold a number of 3.5" hard drives, but there's only enough hardware included to mount exactly one. The other bays are physically absent.). The price was very reasonable - about $100 more than equivalent parts from Newegg.
We had weird issues with the Alienware's extra LEDs on day 1. Called tech support, and without waiting in queue got a real human (in America!), who spoke real American English, had a real name, and who actually had at least half a clue. They sent a new part, which didn't fix the problem. Called back, again immediately got a real human, who dispatched both more parts and a warm body to install them. Problem solved.
And, sure, it'd have been better if the system didn't need any service, but I did feel pretty good about the whole process. It seemed that Alienware wanted to solve my problem, instead of just force me to jump through hoops.
Meanwhile, I loathe to call Dell support. One of the hinges on my laptop broke (which was reasonable enough after 2 years of hard use), and I had to wait for 20 minutes before some girl in Bangalore came on the line who only wanted to talk to me about reinstalling Windows XP. I had to fight with her for about 15 more minutes in order to get transferred to someone with enough clue to understand the simple problem and dispatch parts. And this with their premium support package!
So, yeah: They're the same company in that they're owned by the same people. But that heterogeneous ownership doesn't mean that they're at all similar in operation or quality.
What does "cut back customizing" mean? (Score:3, Insightful)
1. We will cease customizations through our "Dell Home" program but will continue with it in our "Dell Large Business" program.
2. We will cease customizations for our "Dimension" line but continue customizations for our "Optiplex" and "PowerEdge" lines.
2. We will continue supporting some customizations (e.g. RAM and HD) but cease support for other customizations (e.g. anti-virus software).
3. We will increase the price on customized models and decrease the price on prepackaged models in order to reshape demand.
It's roots (Score:5, Funny)
There goes their one selling point... (Score:2, Insightful)
Anti-Foreign Bias (Score:3, Insightful)
Which will result in lower prices which is good for consumers. How is this the deeper downside? Why are Americans, which have one of the highest standards of living in the world, more deserving of these jobs than people in other countries?
Re: (Score:2)
Which will result in lower prices which is good for consumers. How is this the deeper downside? Why are Americans, which have one of the highest standards of living in the world, more deserving of these jobs than people in other countries?
I think he was talking about the downside as it applies to the build quality, not the economy. But I agree with you in general - when people talk about slashing gov. sponsored R&D funding, I ask a very complex simple question: why are janitors in America paid many, m
Re: (Score:2)
Even if such employment makes everything more expensive and results in Americans working longer hours.
Remember, only evil economists say that productivity gains make everyone richer. The truth is, slogging away for 20 hours a day is what people really want.
Re: (Score:2)
If the Chinese are giving you free stuff (if you are giving them less than what they give you, you are getting something for free), why is that bad?
Are the Chinese and every other country that dumb that they want to give away their wealth and work to you for free?
Re: (Score:2)
The 'free stuff' ain't free ... it's debt.
It depends on the terms of the sale, doesn't it?
And even if that were true, if I want to take on a mountain of debt to enjoy something in the short term, why should anyone have the right to stop me?
If I own my life and property, I should be able to spend it in whatever way I want. If I want to sell all of my stuff to a Chinese man for some lead-tainted toys, why shouldn't I be able to do that?
Unless of course, I don't really own my life and property.
something Dell neecs to consider (Score:2)
Expensive options (Score:5, Informative)
My experience is that customizing a Dell always costs an arm and three legs. Upgrading RAM costs twice what it would to buy retail, and please don't tell me that a 320 GB hard drive costs $100 more than a lowly $160 GB model. They make money hand over fist when small/medium business purchase customized machines (I've seen co-workers add on $1000 in not-so-necessary option), but the company has a much harder time with price-sensitive customers. I've purchased three Dells for home use over the past six years, and in each case I waited until they offered an extremely good deal and bought a minimally configured system and added my own memory, second hard drive and video card.
Dell has been losing ground against other manufacturers, and one often sees off-the-shelf machines at Best Buy that offer better value and immediate availability. Part of the reason is that more and more buyers are opting for notebook PCs that are made in China alongside machines from HP, Acer and countless other competitors. In essence, Dell adds an extra layer of complexity to their manufacturing process by allowing customization of these laptops to occur once they arrive in North America. In the meantime, Acer is able to ship preconfigured systems directly to retail outlets without additional expense. The days of the big beige box are coming to an end, and much of Dell's business advantage centered on getting people to buy overpriced (and often unnecessary) upgrades that simply aren't feasible in a notebook form factor.
Well, that sucks (Score:2)
My latest purchase is about a year-old Inspiron E1705 with a GeForce 7900GS, C2D, 2GB RAM.
Every Single pre-selected system I've ever seen of theirs doesn't work for me. I have strange needs - I don't need a 600GB hard-drive, that's what my GigE is for. I don't need a whopping-huge screen because I need a faster processor. I don't need 3GB ram installed because I need a faster processor.
Basically, I order a system
Sumbission is flamebait? (Score:2)
Dell To Save 100% Of Annual Costs (Score:4, Insightful)
Profit, remaining the difference between income and costs however, isn't as simple as "reduce costs, increase profit"... you stop selling things, you stop getting the income too.
Speaking as a manager who purchases regularly... Dell's god awful love of non standard components to try and drive customers back to them for upgrades is next to inexcusable. I tolerate it because office machines can be bought to the spec I need without cracking the case. To now be told, "Oh? You need a high end processor and ram but don't care about the rest of the system? Sorry, that only comes in our high end system and you now have to pay for media burners, graphics cards, hard drives and Vista Ultimate that you don't want."... Especially when I can't buy a lower end system and swap out the processor because the old motherboard won't support it and can't swap out the motherboard because the case uses non standard connectors and fan mounts... I'm going to be going straight to the competition.
So, yes, Dell will cut $3B in costs. Part of that will be the costs of all the systems they used to sell to me. Along with the profits on those systems too. Assuming the same holds true for others, they successfully cut off their $4-5B nose to spite their $3B face.
Now is the time to create a computer line (Score:3, Interesting)
I suspect that said company could even take over companies like HP and Dell by focusing on Customer Service, in addition, to having lower costs and a SECURED system.
Re:Deeper Downside? (Score:4, Insightful)
Now, tell me how people can afford to buy stuff if they have no job, or one that pays 1/2 as much?
Re:Deeper Downside? (Score:5, Insightful)
Re: (Score:2, Insightful)
Well, if you want to talk about 15 years down the road you might as well mention that in 15 years all the demand from our outsourcing will make the Chinese as well off as us, forcing them to charge as much, cancelling out any benefit of outsourcing there.
You're a little capitalist, and you don't even realize it. Want all the jobs to stay in our country? That's greed; the same thing driving those shareholders to make more money. Unfortunately, whining doesn't get much done, so we'll all have to work r
Re:Deeper Downside? (Score:5, Interesting)
Well, if you want to talk about 15 years down the road you might as well mention that in 15 years all the demand from our outsourcing will make the Chinese as well off as us, forcing them to charge as much, canceling out any benefit of outsourcing there.
You're a little capitalist, and you don't even realize it. Want all the jobs to stay in our country? That's greed; the same thing driving those shareholders to make more money. Unfortunately, whining doesn't get much done, so we'll all have to work really hard and offer some kind of advantage to keep the jobs. It's called "competing".
About the only thing we do have here in the U.S., at least at the moment, is a hell of a consumer market. Until we figure out exactly how we're going to keep ourselves going, I don't think it's necessarily illogical to want to carefully manage access to the one thing of value we have left. I'm not proposing or advocating for complete isolationism, just a careful analysis of exactly who we're allowing access, and to which markets, and what the effects are.
More bluntly, I don't see any reason why the U.S. ought to open any market to foreign competition unless there's a clear indication that opening it results in a net benefit to the United States. Now, it may be that fully-open markets are the best (or least-worst) policy for Americans in general, but I haven't seen any of the politicians pushing for open markets really going out of their way to demonstrate this. And from where I'm sitting, it looks a lot like we're just letting ourselves go bankrupt on imports without much of a thought towards the long-term sustainability of this situation.
Even if by restricting imports it increased the cost of non-essential goods to consumers, but in doing so bought us a few more years or decades of solvency in which to work on our comparative advantage (or for the Chinese and other developing markets to bring their labor force's standards of living, and thus costs, closer to par), I can't see why that would necessarily be bad.
National governments have a mandate to serve the best interests of the people they represent. If free trade and open borders are demonstrably the best path, I'd be more supportive, but right now they look suspiciously like a path that leads off a cliff.
Re: (Score:2)
the USA has consistently signed trade agreements then procceded to break them and refuse to stick to what it's signed.
While i'm all for open trade, because it brings wealth to everyone, I would be super careful of signing anythin
Re:Deeper Downside? (Score:5, Insightful)
The Canadian automotive industry died because it has even more regulations and unions than the US. China kills US manufacturing because it has less regulation than the US plants. Can you believe that a US plant has to not only pay property tax but a tool tax on the machines? Ol' Patrick Henry would roll over in his grave.
There are two solutions to this problem:
1. Protective tariffs: historically a bad idea (recall the Civil War).
2. Deregulate and deunionize: historically a good idea (think the Iron Lady salvaging Britain).
Unfortunately, the US is rapidly adopting Hillary's favorite idea: the government can save you! Guess how?
But then, I don't know of any candidates who don't subscribe to that idea. Republicans just aren't what they used to be. It seems the only differences are on social issues. Economically, all the big candidates look the same. It's so frustrating to talk to people who like what Ron Paul says but dismiss him offhand with a sickly smile and say "But he's not electable."
The only way to save our economy is to somehow break through people's thick heads. Unfortunately, we are living a generation that thinks in a herd mentality, usually delivered by rich morons like Oprah.
I only hope the generation now at college (that like Paul so well) will learn something from the current disaster and do something about it.
(Wow, I this post is all over the map. I feel better after just saying it all though.)
Re:Deeper Downside? (Score:5, Interesting)
It seems you're advocating deunionization without knowing what it actually means.
Deunionization as an economic measure means that you plan to solve fundamental problems in the economy by worsening the bargaining power of the lower and middle class, in effect worsening their conditions. Instead of outsourcing, this is bringing conditions from China to the developed world. Newsflash: if an industry fails because it cannot survive unless it has unacceptable working conditions, then that is a good thing.
Re:Deeper Downside? (Score:5, Interesting)
Oh, and all our companies are close to bankruptcy, and no executives and shareholders ever manage to take out huge bonuses and dividends..
Seriously, unions are why you don't still have 12+ hour working days in the US and most of the rest of the world. It took decades of campaigning, strikes that often were illegal and bloodshed when police struck down on strikers for the US unions to get employers to accept the 8 hour working day.
It's a paradox that the rest of the world can thank US unions for the 8 hour day, when your unions have been reduced to festering corpses, and that May Day was established as an international day for the working class to demonstrate directly in response and support of the US unions, while the US working class was quickly subverted into accepting the watered down Labor day.
A huge part of the improvements in working conditions in the latter half of the 1800's and well into the 1900's were a direct result of strong unions in the US.
Re:Deeper Downside? (Score:5, Insightful)
As long as the quarter looks good, its golden. Another question would be this: Why do the uber rich trading firms want to only see short term gains, and not longer term ones?
What financial disadvantage would there be if companies developed new things and technology, and continued further research going ahead up to 30-100 years? Ma Bell did that and we ended up with the transistor, lasers, Unix, C...
Re: (Score:2)
Huh?
Re: (Score:3, Insightful)
I understand all right. It raises the whole world out of poverty by spreading the money where labor is cheap until they're equal with everybody else. That that means for me, my generation, and my children is that it effectively lowers our wages. I dont like that, and I think its fairly easy to see why.
Selling out our ability to create is just a bad idea altogether. It weakens our military and our ability to protect us.
---Maybe you failed to consi
Re:Deeper Downside? (Score:4, Insightful)
This is the time you're supposed to prove me wrong... not show me maps of "not accounting for inflation" pretty graphs. Didn't you even read the comments below the graph, or did you just go "goo goo gaga pretty"? Erik Koht poignantly said that if we were to apply EU standards of living to the USA, 40% are in poverty level.. But even that tells not the whole story.
What I would venture is happening in our country is a ever-widening gulf between those who get paid to do and those who get paid to think. Our idea is we can just outsource it and sweep it under the rig, so to say. We have jobs that routinely get paid 100k+, and then we have 35k jobs. Those are the 2 working parent family households.. Manufacturing traditionally held that role of between intellectual and manual labor that a family could progress to higher socioeconomic ladders if they so chose.
I also have been told stories by the older generation that college could be paid off each year by working 40 hr/wk on summers. No more. Instead, we have corporations that demand we all have college, even traditionally they did not require it. Now, college has turned into a sorts of a new high school in which we pay to learn what once they would train on the job.
Unless we rebuild our nation, starting with our currency, then to manufacturing, and on, I can see us economically dying to countries like China and India that have almost 2 billion between them. Even during the Cold War, the USSR only had 200m civilians. That's a drop in the bucket compared to what China and India can do.. I wonder how high the Chinese could push oil? 200$ a barrel? 300$ a barrel? Or even our worst nightmare of switching OPEC to the Euro?
Re: (Score:2)
Re:Deeper Downside? (Score:4, Insightful)
Ah yes, but you see, working for your living instead of getting the money by playing the stock market or owning Dell is so Middle-ages, and people who depend on it should really move on or die off. By removing menial jobs from the country the Big Boys are actually helping people to transition to pure royalties-based industry, and get the money the way it's meant to be had - by sitting in leather armchairs and smoking Cuban cigars while reading the stock market reports, not something as vulgar as working in an office.
(If you don't see Alien-grade sarcasm dripping from the above words, get yourself new glasses.)
Re:Deeper Downside? (Score:4, Insightful)
They can't. In the words of Marriner Eccles: Guess where we are right now?
Re: (Score:3, Insightful)
Can you please explain how that is so? Reading countless economics text books about the benefits of division of labor have confused me.
Re: (Score:2)
Re: (Score:2)
When I, as an individual, outsource graphic design to my friend, the both of us benefit and both our 'GDPs' increase. I can focus on programming and she can focus on graphics.
If I stopped 'outsourcing' this to my friend, I'd have to learn both, spend more hours doing both pieces of work. And she'd have nothing.
Why would it be different for countries/cities/states/companies?
Re: (Score:3, Insightful)
People forget that money and wealth are not the same thing. This is one of the things that makes economics harder than it looks. You have to take a holistic approach to understanding, and it's extremely easy to get caught up in one aspect and misunderstand its overall effects on
Re: (Score:2)
GDP = gross domestic product. Less producing = less GDP. It's an interesting conundrum. Companies think they can save money by building stuff in China. That was ALWAYS debatable but the beancounters made it look good. Now, I would wager that the cost of shipping it all back is edging up.
Let's hear it for the beancounters! Making questionable managerial decisi
Re: (Score:2, Insightful)
Hypothetical: If EVERYTHING were designed and built overseas and then brought back here and sold, who here would have enough money to buy it?
And that is why everything will not be designed and built overseas. The Chinese would want to sell you stuff only if they know you can pay.
What *will* be designed and built overseas is whatever that can be done cheaper.
If it costs Americans $1 to make a plastic spoon and if the Chinese can sell it for $0.98, then that will be outsourced.
The Chinese know you can pay for it (since you were spending $1 for it until now) and the Americans are better off by $0.02.
The guy who loses is the guy wh
Re: (Score:2)
never seen it put so well. Oh and i'm in software developement, you know one of those key area's that's supposedly being raped by outsourcing.
Re:Deeper Downside? (Score:4, Insightful)
Can you please explain how that is so? Reading countless economics text books about the benefits of division of labor have confused me.
Imagine a widget factory. The factory takes in raw materials, and produces finished widgets. The widgets are sold on the market for some price that exceeds costs, resulting in profit. The workers are paid a salary, which they can use to buy widgets. With the exception of possibly exhausting whatever raw materials are used to create the widgets, you can repeat this wealth-generating cycle forever. (I.e. it's not some sort of closed system, and it's not zero-sum; you're creating wealth by adding value via the raw-materials-to-finished-products process. There are other processes that create wealth, this is just the most obvious.)
Now, we outsource that factory to Somewhere Else, but continue to import the widgets to satisfy domestic demand, perhaps at a lower price. Now, consumers buy their widgets from Somewhere Else, meaning that wealth flows over there. At the same time, all the people who work at the widget factory are unemployed.
Do you start to see a problem here? If you can't find something else for your former widgetmakers to do, you end up just draining money out of your economy. If you have modern finance at your disposal, you can conveniently spend more wealth than you actually have, issuing debt and importing stuff; at least you can until people stop wanting to buy your debt. This isn't sustainable. Eventually you either literally run out of hard currency (the case if you use gold or something else that can't be created), or people decide to stop buying your debt. And then you have a bunch of angry, unemployed ex-widgetmakers who can't afford to buy widgets anymore. Problem.
Of course, there are cute responses to this. You could argue that this is just the way things are supposed to work -- if the widgetmakers couldn't compete, they deserved to go out of business. Fair enough, and that actually makes a certain amount of sense.
But suppose you have an entire nation of widgetmakers? An entire nation of people who have built themselves a nice lifestyle (oh, and by the way, a huge fucking quantity of nuclear weapons) for themselves, making widgets, and suddenly end up unemployed? What do you expect them to do, calmly and rationally reduce their standard of living so that they can compete better on price? I don't think so; not when they have the ability to go and take a lot of wealth via brute force.
Re:Deeper Downside? (Score:5, Insightful)
all you have done is grossly over simplified the whole process and picked out the little bits that suit you. the money doesn't just flow in one direction to the widget makers, the widget makers need people from widget land to show them how to build the factories and train them, they need someone to design and market the widgets for them in the first place. In short the clever widget makers who started the whole industry get to specialise at a different part of the supply chain, and don't have to spend all their time subsidising work that can be done better/cheaper else where.
if your idea's really did work, why does communism and protectionism fail?
Re: (Score:3, Informative)
I read an interesting story awhile back about Schwinn bicycles. From what I read, Schwinn had various techniques that they used in assembling their bicycles that made them more reliable. But they were losing sales to cheaper foreign-made bicycles which weren't as reliable but were considerably cheaper.
Well, they moved their assembly to China. They went over and taught Chinese workers their techniqu
Re: (Score:3, Insightful)
man your grasp on economics is staggeringly bad.
Possibly, but yours is quite far on the other side of the spectrum. Would you hire say a system architect that never had touched code? No way. But if all the entry-level programming jobs are in India and pay next to nothing, they'll never get started. Sure you do a transfer when you have the know-how and the skilled workers, but eventually they'll have experienced workers and evolve their own know-how. To think that you can stand on the outside and only snipe the good positions you want is quite unrealisti
Re:Wow (Score:5, Insightful)
Re:Wow (Score:4, Interesting)
Not only that; people want to see, touch, and hold laptops before making a purchase decision.
I'll leave the conclusion up to the reader.
Re:Wow (Score:5, Funny)
I'll leave the conclusion up to the reader.
Re:Wow (Score:5, Interesting)
I think the point is that those were the old Dell commercials. If you look at ones today, they're all about price. Features and price, admittedly, but price is the biggest thing.
This is a reflection of the market for PCs. When they represented a substantial capital investment, you wanted to tailor them to your particular needs, and avoid paying for anything you didn't absolutely need. That made customization and U.S.-based assembly locations worthwhile. Now, people don't want that as much. The PC, as a unit, has become increasingly commoditized. I bet a lot of buyers today don't even look at specs; they just buy "a computer" and make a lot of assumptions about what they'll be able to do with it. (Assumptions that are actually pretty safe if you don't plan on doing much beyond typical consumerish tasks with it.)
As a result, the goal is no longer "build me a PC to my exact specifications," it's "build me as much PC as possible for $500". Or $300, or $250. I suspect before too long it'll be $99.
That doesn't favor having a lot of assembly points close to consumers; it favors doing all your assembly in a quasi-slave-labor camp somewhere, to better keep costs down, and then shipping tons and tons of identical boxes in bulk to wherever the consumers are. 'Who cares if it's not exactly what you want? It's $500 and it's more power/features/speed than you'll probably need, so just buy it,' is the message.
It's easy to blame Dell here, but it's buyers of technology that are driving it. Not enough people want essentially bespoke computers (or the ones that do aren't buying them from Dell), and Dell is going to eliminate the facilities that provide that service.
Re: (Score:3, Interesting)
Re: (Score:3, Insightful)
It is very true that PEOPLE ONLY CARE ABOUT THE PRICE.
Bullhockey. Niche builders like {pre-Dell} Alienware do well. You work in the computer department of a retail store. You're getting the bargain basement shoppers. They're the ones buying up eMachines at a frantic pace and wonder why it doesn't last/work for a darn. To use the vaunted /. car analogy, sure you had a lot of people buying Yugos SOLELY because of the price, because they didn't know any better. Once the maintenance/safety/reliability record became known, however, people were willing to spend a
Re:Wow (Score:5, Insightful)
Re:Wow (Score:4, Insightful)
Re: (Score:2)
Dell sells to a lot of very large companies (including government) that do a whole lot of linux.
Re: (Score:2)
I think it is a stupid move on their part but I'm not running their company. I also don't buy their computers so I really don't care that much about them. Their so called customization was more or less cookie cutter customizing t
Re: (Score:2)
I'll see your megalopolis with one divorce lawyer, and raise you a demand for alimony.
Re:After 12 years, our agency stopped purchasing D (Score:2)