Dell better late than never with AMD
Published: 19 May 2006 16:35 BST
Dell's finessing of the just-in-time production process is as legendary as the control it exerts over suppliers.
The process is poetry in motion. Computer parts are only shipped when they are needed, ensuring that suppliers are forced to shoulder the burden of stock holding. It takes workers a matter of minutes to turn parts on delivery trucks into a PC — one person does the job in four minutes for a workstation, and two people take 20 minutes for a server or notebook. Burn 'em in, strap on peripherals and ship 'em out.
Of course, all this time, payment for the machine has been sitting in Dell's bank account, where it may stay for up to 45 days before the company has to pay suppliers. Margins are so slim these days that Dell probably makes more money on interest on these payments than actual profits for an individual PC. One result of all this has been an obsessive focus on reducing costs.
Why, then, has Dell consistently refused to use AMD processors, which are proven to have higher performance and lower power consumption than their Intel competition? If you ask AMD, they will lay the blame squarely at Intel's door, quoting subsidies to keep its most valued customers on-side. If you ask Dell, as AMD says it has almost on a weekly basis for years now ("I've replaced a third set of tires on my car going back and forth," noted AMD senior vice president Marty Seyer this week), Dell will trot out explanations about the complexity of adding different components into the production line. That is an argument that doesn't wash well given the custom-build model of which Dell is so proud.
Whether AMD processors truly are faster or cooler than comparable Intel chips, a lot of buyers would simply like the choice. In servers, cool runnings often count for more than gigahertz, as power consumption and heat become the biggest bottlenecks in data centres.
Whatever the reason, this is a step in the right direction for Dell. It's just a shame it didn't come sooner or go further.
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