Dell to shift manufacturing out of Ireland
PC giant will divide production up between Poland plant and third-party manufacturers.
By Dave Hannon -- Purchasing, 1/8/2009 10:59:00 AM
In the latest step in its ongoing supply chain overhaul, PC manufacturing giant Dell will close a manufacturing plant in Limerick, Ireland and divide its production over the next year between a plant in Lodz, Poland and third-party manufacturers.
The Limerick plant (left) manufactures products for Europe, Middle East and Africa. According to RTE radio in Ireland, Dell’s products make up at least 5.5% of Irish exports and 2% of gross domestic product. At this time, no decision has been made on what Dell will do with the Limerick plant once production has ended there.
The $292 million Lodz plant was announced in 2006 as a second European manufacturing site and officially opened less than a year ago.
Dell officials would not say how much of the Limerick production was going to Lodz and how much would be given the third-party manufacturers, but a Dell spokesperson told Purchasing.com that “it is fair to say that third party manufacturing partners and Lodz are more cost-effective options” than Limerick. When it was opened, Dell officials said the Lodz plant’s location “means that Central and Eastern European and Nordic customers can expect a reduction of at least two days over current delivery times.”
The spokesperson tells Purchasing.com that to accommodate the additional production volume at Lodz, “we expect to hire some additional employees there over time on a business needs’ basis. However, there isn’t an immediate requirement. Since the transition is occurring in phases over the course of this year, we will continue to review and evaluate as we progress.”
The move is part of Dell’s $3 billion global cost reduction plan to reduce its manufacturing footprint. Last May, Purchasing.com reported that Dell was closing its one of its two Austin, Texas manufacturing plants and planning to outsource more manufacturing to contract manufacturers in low-cost regions as part of a broader $3 billion cost-reduction plan.
On Dec. 31, Dell announced it was reorganizing its business globally around three major customer segments. It also said that Mike Cannon, president of Dell’s Global Operations, will retire from Dell effective Jan. 31 and will be succeeded by Jeff Clarke who, in addition to his responsibilities as head of Dell’s Business Client Product Group, will become vice chairman of Global Operations.
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