We’ve taken other companies to task for claiming they’re lean while laying off people. Not just laying off people in the face of severe business downturns like Ford has done, but laying off people when business is going gangbusters. Companies like Global Engineering and Technology, and Columbia Aircraft. Global even had the gall to do it just days before Christmas… talk about not understanding the fundamental "respect for people" pillar of lean, let alone the value of employee knowledge, creativity, and experience.
Dell has long been one of my our favorite companies. A business model that receives payment before the product is received, extremely low inventories (at least in-house…), and a rather amazing supply chain… even if it sources quite a bit from overseas. I’m typing this on a D620, which replaced my X1, which replaced my D600. It docks to connect to a pair of Dell 24" widescreen LCD’s… if you haven’t experience the amazing productivity boost that two monitors give you, you need to try it. My wife has a D420. All has always worked perfectly, all the time.
But in all fairness to the companies mentioned earlier, we must now take Dell to task based on yesterday’s announcement.
Dell, the No. 2 PC maker, reported sales and profits Thursday that handily beat Wall Street forecasts and announced it would cut its staff by 10 percent over the next 12 months. The cuts would amount to about 8,800 jobs, according to a Dell spokesperson.
I’m guessing they were pressured a bit from the short-term wonks of Wall Street. And the wonks liked what they saw.
Shares jumped more than 7 percent in after-hours trading on the news after finishing about 2 percent higher on the Nasdaq in regular trading.
Let’s go over that again. Sales and profits up, and company news is good.
Dell attributed the better than expected numbers to lower component costs and a better mix of products and services that meant higher average selling prices. "The turnaround here is progressing and somewhat sooner than what some [investors] had hoped," said Brent Bracelin, senior analyst with Pacific Crest Securities.
I guess that makes it time to lay off. What? I wonder who found lower-priced components, who improved services, who design products to be assembled more efficiently, who actually did assemble more efficiently. Perhaps the employees?
So whack them! Throw them to the street!
I wonder who’s going to drive the next round of improvements? Who will be there with knowledge and creativity to build the additional products as growth continues?
Those new Sony Vaio laptops look pretty sweet…
Former Dell Guy says
I don’t think Dell has ever spent much time claiming to be “lean.” They are Dell. Other bestow the “lean” title on Dell because they don’t know any better.
Dell is laying off tons of people because they overhired in recent years. They grew employees faster than revenue because the company has always thrown people at problems instead of fixing or establishing processes. That’s horrible mismanagement. It has nothing to do with lean.
Dell’s layoffs have nothing to do with lean. It’s not because of efficiency or process improvements. It’s a cynical attempt to prop up their stock price, which has been flat for the decade. Dell will get rid of people and then still have their bad processes.
Dell DOES have a fledgling “TPS” group that’s investigating how to apply lean methods, but the management of that company is rotten to the core and won’t buy into true lean. That TPS group is probably going to get very frustrated, if they aren’t already.
This Dell story belongs on the “bad management” blog more so than a lean blog.
Former Dell Guy says
One more thing… the amazing supply chain is really just pushing inventory back on suppliers and bullying them.
Not very lean either. More like Wal-Mart than anything lean.