The build-to-order model that Dell Computer pioneered is no longer as efficient as it was five or 10 years ago, says Roger Kay, principal analyst at Endpoint Technologies Associates. The market has changed, and Dell's early advantage has become a liability. Supply chain changes that the company is announcing now have been needed for some time.
"The number of possibilities and configuration matrix that build-to-order implies creates a kind of cost. If you can build a limited number of configurations in large volumes, you can actually get lower costs than the individually built ones," Kay said. "So part of the judgment is to figure out what those are and doing large manufacturing runs."
Source: NewsFactor, http://www.newsfactor.com