Dell's Debacle -- Laptop Shipping Delays Could Cost Dell Big Time

Thousands of Dell customers won't be seeing this any time soon.

Photo by Vox Efx. (License: Creative Commons Attribution)

Dell is on the ropes. The customizable PC giant's assembly lines have been brought to a veritable stand-still by massive delays relating to the manufacture of their popular XPS M1330 series laptops. Now, with shipping delays piling up, Dell's customers are seeing weeks stretch into months with little more than an apology to show for it.

The problems with the M1330 stem from manufacturing difficulties with its case. Dell, with pressure mounting from Apple Computer, responded with a new and dynamic case redesign for the M1330 featuring a new painting process and enhanced hardware specs, but inadequate process testing and supply shortages turned an ambitious product launch into an unmitigated failure. Dell explained the issue on August 3, 2007 in an entry on the "Direct2Dell" blog.

The finish on the XPS M1330 is similar to a custom paint job on a car, but with one additional complexity—on a car, typical viewing occurs from several feet away. With a notebook, the typical viewing range is much closer... sometimes a foot or less. This requires a different level of attention to detail.... There was no problem painting hundreds at a time. But as we increased the volume, otherwise manageable factors like dust contamination caused our successful yields to decrease. Adding to the complexity, the Crimson Red and the Pearl White colors require more coats of paint and more touches to create the finished product—that means there is more opportunity for dust contamination.

But as orders for the M1330 rolled in Dell's wait times shot up, and though the company responded openly about the issues with the XPS M1330, the scope of the problem proved much larger. Delays in the manufacture of the M1330 spilled over into Dell's Inspiron line and some customers report shipping issues with the entire series ofVostro notebooks in Dell's small business division. While Dell battled the issue throughout the month of August, including imposing a hefty surcharge on new M1330 orders with the more difficult colors, the shipping delays have gone rapidly from bad to worse.

In early August the administrators at Notebook Review witnessed a 200% spike in traffic to their Dell Forum, an increase they attributed to people visiting the forums to discussing their problems receiving Dell notebooks [they'd] ordered. In response to the Dell Debacle, the site and community posted the expected wait times for the various Inspiron models (1340, 1540, 1720) experiencing delays. For the mid-range 1520/21, shipments took between zero (for black or white cases) to eleven (for red, green, and pink cases) additional days to ship as of August 8, 2007.

As of this writing, however, the Inspiron 1521 orders that Dell received on July 30, 2007 have an expected shipment date of September 27, 2007 -- a nearly eight week wait time. Worse, the timing of the crunch aligns (and has aligned) with the height of the back-to-school rush. Dell supplies laptops to students and university faculty across the country and the delays put the deferred shipping dates past the mid-term mark for some students.

Despite all of this, Dell's response to the meltdown has been tepid at best and outright hostile at worst. The company has been extremely reluctant to offer anything more substantive than a complimentary upgrade to next-day shipping to irate customers - hardly an olive branch with up to four additional weeks to go until a twice deferred ship-date. Moreover, Dell offers no recourse for its inconvenienced customers short of cancellation of the order. Though the individual components responsible for the delay are easy to pin-point, Dell informs customers that substitutions will result in the order re-cycling through Dell's ever-growing order queue, placing it behind thousands of more recent orders and incurring additional delays.

Though Dell's assembly lines are struggling to churn sluggishly along, the same can not be said of the rest of the industry. Apple Inc's now legendary comeback from dismal lows in the 1990s has brought it back into the laptop market in spades. The Cupertino trendsetter's notebook market share rose to 17.6% in June and - with 1.76 Million Macs shipped in last quarter - accounts for as many as one in six laptop sales in the United States today.

With each passing day the computers languishing on Dell's slowed lines drop in value. The incredible speed and rate of development which has come to define the field of Computer Engineering is now set against Dell's halted assembly process. As the weeks turn to months what laptops Dell manages to ship will, by the time of their delivery, be less sophisticated and more expensive than what Dell's customers could - and very likely will - simply buy off of a store shelf at any one of thousands of consumer electronics shops around the country.

Dell's inability to meet its shipping goals puts it behind its competitors in terms of timeliness and behind the industry in terms of price and performance. With other companies investing heavily into the service and warranty aspects of the built-to-order PC business, there is simply no good reason to say "Dude, you're getting a Dell."

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