Branded or nonbranded PCs: An increasingly tough choice

Branded or nonbranded PCs: An increasingly tough choice

By Zatni Arbi

JAKARTA (JP): Another friend from The Jakarta Post recently
asked for my help in putting together a PC for his family. I
checked the latest prices of components in Glodok, West Jakarta,
and did some arithmetic. Of course, a small fee for the job that
I'd have to do and the support I'd have to provide -- which would
be long-term support -- was also included in my calculations.

When I added the total figure, I came back to him and said,
"Look, I could assemble a very good home PC for you, something
that I would enjoy very much using myself. It would have a 166
MHz Intel Pentium processor, a fast 1.7 GB Fujitsu hard disk, an
original Creative SoundBlaster sound card and a 12-speed CD-ROM
drive, plus 16 MB of RAM. The only thing is its price would be
comparable to a Compaq Presario 4128 with the same features. So,
the choice is yours and you can think it over." Two days later he
called me back and told me that he had decided to go for the
Presario, then we went to Glodok together to get one for him.

Although free trade is not there yet, we already began to feel
the impact. Just imagine, a good brand-name computer can cost as
much as one I could assemble myself using quality components.
That was not the case one or two years ago, when brand-name PCs
carried steep prices. How do global PC vendors manage to cut
their prices? Do they use cheap components to make their PCs
affordable today? Certainly big players such as SNI, HP, IBM and
Compaq, who rely so much on their brand image, will not do that.

One thing they can do is to ensure the highest efficiency in
their supply chains, manufacturing and distribution. And talking
about manufacturing, I was very lucky to have the opportunity to
visit Siemens Nixdorf Informationsysteme (SNI) manufacturing
plant in Augsburg, Germany, in March, to see for myself how a
brand-name computer is made.

Just outside the old, pretty town of Augsburg in southern
Germany, a huge structure encompasses SNI's largest manufacturing
plant where they make their servers, PCs and notebooks. A staff
member took me and some other guests from BCA to where they made
motherboards, keyboards and other parts, also to where they
assembled PCs and packaged them for shipment. PCs for the entire
European market were shipped directly out of this plant.

Just like in the automotive industry, no PC company in the
world today produces all of the component that go into their
machines. Therefore, although SNI manufactures their own
motherboards in the Augsburg plant, the components come from all
over the world. The plastic moldings for the motherboards, for
example, come all the way from Taiwan and Singapore. The various
chips on the motherboards may come from halfway across the globe.

This manufacturer is a good example of how computer makers use
efficiency in making their products competitive in the market.
Among other things is the acquiring of components in bulk right
from the sources so that prices can remain very low. That's also
why I can't beat the price of a brand-name PC -- I buy only one
unit of each component, while brand-name PC manufacturers buy
thousands of pieces in a single order.

For certain types of motherboards, the production line is
fully automated. Everything is done by machine, including the
soldering of chip circuitry. For some other types of
motherboards, the chips are still manually placed on plastic
moldings. The chips themselves are stored in bins arranged in
tall shelves where storage and pickup operations are also fully
automated. Several robots go back and forth along marked lanes on
the floor, carrying fresh supplies of chips and other
microelectronics directly from unloading docks. It was just
amazing to see how the robots knew exactly which bin a particular
chip should fall into. It's not really surprising when you
realize that Siemens is already a strong player in industrial
automation as well.

Keyboard

SNI also makes their keyboards in Augsburg. Their keyboard is
a good example of how products can be made cheaper with simpler
technology. Unlike my own treasured keyboard -- an original IBM
keyboard -- in which I'm sure there are thousands of small
components, there are only seven parts in a typical SNI keyboard.
Even the springs are replaced with a rubber mat. Therefore, the
cost of making one is much lower, but the quality of the keyboard
is not sacrificed.

Furthermore, if you take a close look at a conventional
keyboard, you'll see that the manufacturer has engraved and
painted every single one of the keycaps to ensure that you can
see clearly which key you're hitting. At SNI, all the keys are
marked using a laser inscription method. Not only does it take a
shorter time to produce a keyboard, but it also is very flexible
in that they can modify the layout any time to meet their
customer's need for custom keyboards. Besides, again, it makes
the cost of manufacturing a keyboard cheaper. Monitors are not
made in Augsburg, but they are made in other places including
Fuqing, China.

PCs are a highly volatile commodity. It's hard to predict when
demands will jump or slump. Therefore, at this plant, employees
are hired on a contract basis according to demands. When orders
rise, the manufacturing management, who already has a list of
efficient workers, would contact these people, and when orders
fall, these people will have an unpaid holiday. It's a flexible
working arrangement.

Testing is a very important part in the assembling process.
Thorough testing will result in lower manufacturing defect rates
and will reduce the cost of repair and support at the
distribution level. Therefore, testing is done at almost every
stage at the manufacturing plant, and when an assembled component
doesn't work as expected, it is immediately sent to an expert
technician whose job is to pinpoint the problem. Usually the
nonworking part is replaced, and after it passes the test, the
assembled unit goes on to the next step.

Emission test

A very interesting unit at the Augsburg plant is its emission
testing facility. As you can see in the accompanying picture, it
has an impressive and expensive room with cones protruding from
all four walls. I felt as if I was inside a large torture chamber
when I entered the room. The cones are needed in order to absorb
and dissipate all interference from outside the room.

All products sold in the European Union (EU) must comply with
EU's strict standards of electromagnetic emissions. Not only do
they have to bear a CE label, they also must be accompanied by a
Certificate of Conformity stating that their products comply with
electromagnetic compatibility (EMC) regulations.

In this anechoic chamber, there were antennas and measurement
equipment that measured not only the level of electromagnetic
emissions from the PC to its surroundings, but also the effect of
external interference on the PC (immunity test). With good
shielding, you can be sure that your PC won't suffer from
interference by electromagnetic forces emanating from nearby
electronic equipment. Certainly, more important than that is that
your health won't be affected by the electromagnetic bombardment
from your PC.

In case you ask, they do not test every single unit that comes
out from the production line. They just do a random sampling to
ensure that all products conform as faithfully as possible to the
stringent emission standards that they have to comply with. SNI
also provides its certification service to other PC and
electronic manufacturers. Products to be sold in the United
States can even get their FCC certification at this state-of-the-
art facility as well.

So, back to the "branded vs nonbranded" question. There may
not be much incentive left for us to buy jangkrik (local term for
home-assembled) PCs -- unless, of course, we choose to cut a lot
of corners in order to get a very low price. For example, we can
slash the price of a PC we build drastically by buying a locally
made housing that has no electromagnetic shield whatsoever.
Another point that tilts toward buying brand-name PCs has always
been their better integration, as components are thoroughly
tested in their labs for compatibility before they are put
together. The manufacturer ensures that, for example, the sound
card will work flawlessly with the motherboard. In addition, they
are safer in terms of electromagnetic emissions.

About the only benefit there is for building our own PC is the
inherent flexibility. When one component breaks down -- say the
motherboard burns out, we can readily buy an off-the-shelf
replacement and install it without having to rely on a brand-name
PC service center, where we would typically have to stand in a
long line to get it repaired.