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The company
moves at what it terms "Dell speed" or "Dell-ocity"
and is still in growth mode in middle Tennessee.
The
need for speed
Speed is
the name of the game when it comes to today's expanding and relocating
companies. Cutting red tape. Shovel-ready sites. Ready-to-go shell
buildings. Trained workers on standby.
Meet a company's
demands, double-time, or be left in the dust.
Nowhere
is this need for start-up speed more critical than in the computer
and electronics industry, which is towering tall on a foundation of
phenomenal growth and rapid change.
Currently,
Dell employs about 1,900 Tennesseans between the Lebanon facility,
a temporary call center office in Nashville and sales people throughout
the area.
In addition,
a 300,000 square foot manufacturing facility and a 360,000 square
foot office building are under construction on land near the Nashville
International Airport.
The 450
people working at the temporary call center will eventually move to
the completed office building near the airport, while the Lebanon
facility will remain in operation at its current site. The new manufacturing
facility near the airport will have two lines capable of producing
Dell desktop products as well as Inspiron notebooks.
The company
is hiring for 400 positions it plans to fill at the new office, as
well.
"I'm
very proud of our Tennessee team for ramping up our operations so
quickly and grateful to the state and local officials who have helped
make it happen," said Michael Dell, chairman and chief executive
officer.
Other business
considerations for the company revolved around the availability of
a skilled work force, proximity to the company's American customers
and access to a rapid distribution system.
"We
looked for an expansion site that had the types of transportation
infrastructure that would allow us to reach our customers quickly,"
said Mark Drury, manager of public affairs for Dell. "Middle
Tennessee, with three major interstates connecting in Nashville, put
us within a day's drive of 67 percent of our customer base, which
is important for a company that prides itself on fast delivery."
Suppliers
take their cues
Of course,
one of the greatest benefits to a project like Dell's is the ripple
effect it ultimately creates.
Almost immediately
after Dell's initial announcement, suppliers started showing up in
the Nashville area. As with many industries which thrive on just-in-time
deliveries, a nearby supplier network is essential, and locating near
customers is an industry trend.
In Austin,
Texas, there are 540 suppliers to support Dell's operations. About
200 of them are within a few miles of the Dell facility, but many
are within a few hundred yards.
Now, suppliers
are making the trek to the Nashville area to keep pace with Dell's
growing operations.
Austin Foam
Plastics was the first to arrive to nearby La Vergne, Tenn., and the
company had already undergone expansion by November of 1999.
Other suppliers
like Brandt & Hill Inc., PalEx and Lightning Logistics have moved
into the area to support Dell, and many more are sure to come.
That same
need to be close to a customer was the catalyst for Mark Container
Corp. to open a location in the Richmond, Va., area.
The company,
which manufactures packaging materials and corrugated boxes, opened
a facility in Henrico County in late summer last year and employs
approximately 25 people.
"We
were attracted to Greater Richmond because of its expanding high-tech
industry and because we are a Hewlett-Packard supplier," said
Barry Johnson, marketing vice president for Mark Container.
Hewlett-Packard
has had operations in Henrico County since 1997.
Starting
something big
Now that
Dell has planted a flag in Tennessee, it seems that the state is destined
to become home to the next high-tech hotbed.
On April
4, computer maker Hewlett-Packard revealed that it would move into
Tennessee, virtually making it Dell's neighbor.
The company
plans to relocate several of its manufacturing, distribution and returns
processing activities from its West Coast operations to La Vergne.
The project is expected to eventually bring 1,600 new jobs to the
area.
A number
of activities will take place at the new HP facility in conjunction
with manufacturing and distribution partners Celestica and Irish Express,
which had existing operations in La Vergne.
HP will
take computer orders from customers, Irish Express will hunt down
the necessary parts and deliver them to Celestica, which will then
assemble the product and ship it to the customer.
Installing
a human element in the wired workplace
While logistics
and proximity to suppliers certainly play an impressive role in where
these high-tech companies locate or expand, the work force issue is
perhaps the ultimate top priority.
"These
companies need an adequate number of people with an aptitude for these
kinds of jobs," said Jim Alexander, economic development manager
with Praxair Semiconductor Materials in Richardson, Texas. "Work
force development issues are going to be primary."
For Dell's
Tennessee operations, work force was a critical consideration and
the company has been pleased with its success in the south.
"We
were looking for a location with a productive, motivated work force
and middle Tennessee has filled the bill well," said Dell's Drury.
"Many of our manufacturing employees came in without a strong
knowledge of computers or computer assembly, but were able to learn
very quickly.
"From
the third quarter to the fourth quarter, we saw a 47 percent jump
in productivity at our plant in Lebanon, and we were able to ship
1 million systems out of the plant in less than six months.
"At
our call center, many of our new hires had customer service experience,
but not necessarily technical expertise. We discovered they were able
to train very quickly and within the first six months of our call
center operations, we took more than 300,000 calls for service.
"We've
asked our employees in Middle Tennessee to train and to learn continuously,
and they have embraced that idea," said Drury.
Just finding
the number of people necessary is important for all computer and electronics
firms, and in particular semiconductors, which can hire upwards of
1,000 people.
"There
is fierce competition between states and counties to attract chip
manufacturing facilities," said Daven Oswalt, director of communications
for the Semiconductor Industry Association in San Jose, Calif. "In
evaluating sites, these companies look at many factors. Most importantly,
they need a strong educational system to train workers.
"Along
with this, they need an abundant labor supply which a strong educational
system produces," he said.
While the
rapid growth of the Phoenix, Ariz., area has been garnering much attention
from companies on the outside looking in, Intel has put the local
work force to work.
The computer
chip giant, situated on the outskirts of Phoenix in Chandler, announced
in January that it has plans to grow.
Intel revealed
that it would make a $2 billion investment to add buildings and people
- 1,000 more people to be exact - over the next five to eight years.
The expansion will take center stage on Intel's Ocotillo campus in
south Chandler.
Production
at the new "fab" is slated to begin by September of 2001.
The plant will be the world's most advanced chip production facility.
Schools
fuel high-tech growth
"If
you look at silicon hotbeds around the country, you will see that
companies cluster around certain areas because of the ability to hire
workers, share information, supplies and technology, and reap the
benefits of a strong educational system," said SIA's Oswalt.
Universities
and technical schools are the anchors for blossoming high-tech hot
spots.
The Florida
technology corridor, for example, includes 30 communities and boasts
two universities, 19 four-year and community colleges, and 17 vocational/technical
schools and learning centers.
The corridor,
which stretches along the state's west coast through Orlando and Polk
County to Volusia County, is home to 530 of Florida's 730 microelectronics
firms.
Uniroyal
Technologies was one of the most recent additions to the region. The
company located a manufacturing facility in Brandon, near Tampa, where
it produces LEDs, or light-emitting diodes.
The revolutionary
high-brightness LED technology is attractive to industries such as
automotive and computer, and to companies like commercial airplane
manufacturers and producers of traffic lights and signs.
Approximately
130 people will eventually be employed at the new $25 million Uniroyal
facility.
Business
parks allow for rapid start-up
High-tech
business parks with proximity to universities are another draw for
computer and electronics investments.
In March
of 2000, Motorola broke ground on a facility that will anchor a new
high-tech research and technology park being built on the University
of Illinois campus in Champaign-Urbana.
The park
plans to target tenants in the areas of engineering, information technology
and biotechnology.
Motorola's
72,000 square foot research and development center is anticipated
to be the catalyst for 220 new high-tech jobs.
And a national
consortium of advanced technical centers dedicated to preparing students
for high-tech jobs is the driver behind a new technology center under
construction in Virginia Beach, Va.
The new
Advanced Technology Center is a joint venture between Tidewater Community
College and Virginia Beach Public Schools.
Virginia
Beach high schools will implement "feeder programs" designed
to steer students into the Advanced Technology Center curriculum,
which will be available to 11th and 12th graders.
The program
is designed to ensure that a capable work force is in place for future
information technology and high-tech jobs in Virginia.
A
full menu of considerations
Since attracting
the best and the brightest is critical to the high-tech industry's
success, the quality of life issue factors into companies' site decisions.
For Compulutions,
which recently selected Spokane, Wash., for its new manufacturing
and strategic account development center, quality of life was a key
consideration.
"We
believe Spokane is a perfect environment for our employees to live,
work and raise families," said Cris Hollingsworth, president
and CEO of Compulutions.
The high-tech
manufacturer of specialty hardware systems is expected to generate
up to 200 new jobs for the region.
According
to Hollingsworth, the company also considered Spokane's skilled labor
force and cost of doing business in its decision.
"I
think that quality of life is now, and increasingly going to be, a
very important site selection factor," said Praxair's Alexander.
"It is the one site selection factor that has a daily impact,
whether you are at the office or at home."