[criddell]

I remember a few years ago reading how Dell had lost the ability to make their own computers gradually over time. On the face of it, every bit of manufacturing and design they moved out of the US made sense, but all of it added up over time meant that they had effectively lost control of the computers they were selling.

It was an interesting story that but my google-fu isn't strong enough to find it.

[notfromhere]

At some point, your manufacturing partners in China are going to realize they control the means of production and can capture the added value by developing their own front office to market and sell the goods they already manufacture.

At what point do places like Dell become just licensing operations?

[Xixi]

IIRC that's the story of Asus: they started out by making parts, and at some point (a decade ago?) started to sell their own desktop/laptop computers.

[crispyambulance]

    > At what point do places like Dell become just licensing operations?

I don’t know, but I expect that there’s a roomful of well-paid asshole MBA’s at Dell working on that “problem” right now.

Everything outsourced and a few product mangers picking stuff out of a catalog— That’s ultimately what the supply chain leads to as corporations grow.

[cptskippy]

I thought Dell has always been reliant on ODMs. Were they at any point manufacturing components themselves?

Dell was still building PCs from off-the-shelf parts in the 90s so much of what they have was developed in the last 20 years. I've got to imagine they still have people in house who know how to setup manufacturing.

[notfromhere]

Even most of the assembly is overseas now. Eventually Asian companies are going to just market their own brands instead of letting Dell be a supply chain manager and marketer.

[cptskippy]

I wouldn't underestimate the value of supply chain management.

[criddell]

Dell did.

[wysifnwyg]

That's happening already as manufacturing countries ignore copyrights from the source country.

[TAForObvReasons]

It's from "How Will You Measure Your Life?" https://www.amazon.com/How-Will-Measure-Your-Life/dp/0062102... discussing how Dell started outsourcing bits and then expanded until Asus decided to make their own computers.

Google search revealed http://sajithpai.com/wp-content/uploads/2016/06/How-will-you... (summary page 13)

[ehnto]

You might say the same thing is happening in software. As everything is outsourced to specialty services, eventually you aren't building or running anything but the glue. If a service goes down, and there is no replacement, you can find yourself in a position where you don't know how to rebuild your own product.

[hobo_mark]

Was it a lecture by Clayton Christensen by any chance?

(can't find the lecture I had in mind but this one mentions the same part in passing) https://youtu.be/rpkoCZ4vBSI?t=2915

[criddell]

Yes it was. I've gone searching for it with the information that you and others have left here and that's definitely where it came from.

[Spooky23]

I recall that article and also can’t find it. The punchline for me was the chairman of their Taiwanese partner, who said something like “Americans are happy with their ratios. (ie reduced inventory) I am happy with cash.”

[llampx]

Wall Street rewards ratios not cash.

[ValisTuring]

Are you referencing this article:How Hewlett-Packard And Dell Destroyed Their PC Advantage ... Piece-By-Piece https://www.forbes.com/sites/panosmourdoukoutas/2013/04/14/h...

[xchaotic]

In retrospect they were right as PC became commodity anyway