Shouldn't they have planned for this?
Am I the only one who thinks it is basic business practice to have alternative suppliers and plans for such disasters? These are big companies: to be so reliant on one plant seems insane.
Some of the world’s leading computer vendors have admitted that a worldwide shortage of laptop batteries will impact prices, shipments and sales. Dell, Hewlett-Packard and Asustek have all grumbled about the dent in the supply chain caused, in part, by a fire at a Korean factory earlier this month where some laptop batteries …
I take it you know little about big business.
This factory proberbly cost several million pounds to set up, they supply millions of batteries each year. Therefore, if they loose this plant, there is a shortfall of several million batters / year.
Now to simply say "Don't they have other suppliers", yes they proberbly do. But to suddenly ask these suppliers to find capacity (i.e staff, machinery, storage, componets) to make these at such short notice, is near impossible. After all I doubt any business has millions of pounds worth of hardware sitting around waiting, just in case!
or else they wouldn't be able to sell the 60-70% of normal that they will in the next quarter.
But what should they do? Have six months worth of batteries in storage? Hard to do in a business where the products are old after that time, and also Li-Ion batteries don't take very well to storage. Have contracts for 30% more batteries than they sell? Say bye-bye to even remotely competitive pricing.
They probably do have alternative sources of supply and I'll bet that other manufacturers will quickly ramp up production to fill demand. That won't stop them all using this as an excuse to jack up prices though.
This is exactly what happened many years ago when a Taiwanese DRAM plant went on fire. You could still get the stuff with no trouble, but 1 and 4 meg SIMMS (as made by world + dog at the time) became eye-wateringly expensive overnight due to the "shortage". I'm sure that, back then, nobody involved even considered for a moment that the opportunity to flog off a load of low-margin parts at a healthy markup might make it worth talking up the impact a bit.
You'd almost think that margins were down on laptops and that HP, Dell and Asus had clubbed together and burned the place down themselves.
My friends in tech all shuddered in horror to look upon a li-ion battery flaming and spitting its ENERGY away after having been abused.
CONCENTRATED ENERGY SOURCES ARE DANGEROUS
Those same guys forgot about the latest car full of crispy people how found out the very hard way how dangerous gasoline is in a car crash.
As the energy density goes up, so does the danger in most cases.
I drive a diesel so that instead of dying in a fiery wreck I can dazedly step out of my mashed VW, slip on my oily (non-burning) fuel and break my neck ;-)
Ok, so, your "source" cites one PHD and another news article, but doesn't say what their reasoning is on why they're dangerous, nor how to re-engineer them.
Here's a tip: You place a lot of potential energy in a small package, and then you do something to disturb said potential energy, you should expect that energy to be released. For example, take a nuclear reactor. If used properly, it can produce oodles of energy. However, if you were to abuse the nuclear pile, drop it, kick it around like so many people do to cell phones, exactly how long do you think it would take before that reactive mass manages to go critical?
It's owning a car: The worse care you take of it, the more likely it's going to fail, either spontaneously or when placed into some high-stress situation.
A Revisit to Lithium-ion Safety, Sam Stimson (expert witness) “the “battery guy” at Dell for 11 years”” states in part “… but the number of defective parts per million (dppm) - cell faults in the field have also escalated.” “Sam explained, is that you have a one in a million chance of something happening to the cell that could create a dramatic happening. Such a happening could be a cell fully venting. Referring to Mr. Takashita’s (PSDS author, expert witness) data in an earlier conference session, Sam mentioned that with 740 million cells produced last year, there could be the probability of having 740 “happenings” that are ”not very nice.”” A motion to compel interrogatory responses had been filed. docket 95 exhibit 27, exhibit 59
The book Direct from Dell Strategies That Revolutionized an Industry, by Michael Dell Chairman and CEO, Dell Computer Corporation with Catherine Fredman, Copyright 1999; page xiii, pages 50-56. Addendum 5“No part of this book may be used or reproduced in any manner whatsoever without written permission except in the case of brief quotations embodied in critical articles and reviews.” copyright page preface Ibid. Page xiii “1993 Suffering from the pains of extremely rapid growth, Dell cancels a secondary offering and posts its only quarterly loss resulting from a temporary withdrawal from the notebook market, its exit from retail stores, and a restructuring of European operations.” Page xiii Ibid.
“We also had introduced one of the thinnest and lightest sub/ notebook computers available. But as our products got increasingly more ambitious in their technical complexity , it became apparent to me that we didn’t have the capability inside the company to get the products to market on time, much less designed correctly.” (emphasis added) page 50 Ibid. docket 80 Addendum 5
“The first difficulty we encountered was with the design of a new product. Basically, our approach to designing notebooks was almost exactly the same as our approach to designing desktops, which makes about as much sense as treating children like mini-adults. Strange as it sounds, this happened in large part simply because some engineers from our desktop division transferred into notebooks.” page 50 Ibid. docket 80 Addendum 5
“Clearly, this wasn’t the right way to approach the design. Designing a desktop is not the same as designing a portable computer. In a desktop there are between thirty and thirty-five parts; in an average notebook, there are twice as many. And the parts don’t all work together in a portable the way they do in a desktop PC.” page 51 Ibid. Addendum 5
“* The delay was due to feature creep, which occurs when too many features are added to a product until, ultimately, it becomes over designed.” footnote page 51 Ibid. Addendum 5
“We also knew , though, that correcting the products by redesigning them, validating the new design, manufacturing them, and delivering them would have taken so long that by the time we got them out the door, we’d be at the tail end of the product life cycle.” page 51 Ibid. docket 80 Addendum 5
“And while other areas within the company were doing well, morale in the notebook group was, as you’d expect, pretty poor. The engineers had spent a lot of time developing the products we’d just canceled, and they felt frustrated and demoralized when their hard work wasn’t brought to fruition.” page 52 Ibid. docket 80 Addendum 5 “Communicating is one of the most important tools in recovering from mistakes. When you tell someone, be it a designer, a customer, or the CEO of the company, “Look, we’ve got a problem. Here’s what it is, here’s why it happened, and here’s how we’re going to fix it, …” page 52 Ibid. docket 80 Addendum 5
“We went to each customer affected by the notebook situation and made it right.” page 53 Ibid docket 80 Addendum 5 “Here’s why you shouldn’t be nervous about doing business with us.” page 53 Ibid. docket 80 Addendum 5 “You’re not a customer for just one transaction. You’re a customer for life.” page 53 Ibid. docket 80 Addendum 5 “There’s no question about who’s accountable if there’s a product problem, and no question about who’s responsible for fixing it. Because of a direct model, we were able to contact our customers quickly and directly, and as a result, recover from the problem fast.” page 53 Ibid. docket 80 Addendum 5
“The notebook problem also illustrated how we utilize the direct model within the company.” page 53 Ibid. docket 80 Addendum 5 “One of the keys to dazzling and delivering on the Latitude was the lithium ion battery.” page 53 Ibid. docket 80 Addendum 5 “In January 1993, soon after we launched Dell in Japan, I met with the folks at Sony.” Page 53 Ibid. docket 80 Addendum 5
“… toward the end of the meeting, a young Japanese man ran up to me and said, “Mr. Dell, please wait one minute. I’m from the energy power systems group and I need to talk to you.” “Energy power systems?” I thought. “Is this guy going to try to sell me a power plant?” page 54 Ibid. docket 80 Addendum 5
“Still, I was intrigued, so I stayed and listened to what he had to say. He started showing me chart after chart describing the performance of a new battery technology called lithium ion. Suddenly I realized his goal: to sell lithium ion batteries to Dell for our notebooks.” page 54 Ibid. docket 80 Addendum 5 “If this was true, I wanted to put lithium ion batteries in every notebook computer we made.’ page 54 Ibid. docket 80 Addendum 5 “They had never built a battery with the cell size we wanted and the number of cells in a battery pack that we needed, and they saw notebooks as a tremendous opportunity to move into a new market.” page 54 Ibid. docket 80 Addendum 5 “Lithium ion became a breakthrough technology.” page 54, Ibid. docket 80 Addendum 5
“As easy a decision as this might seem, in retrospect, lithium ion was a brand new technology, and therefore a risk.” pages 54-55 Ibid (emphasis added) docket 80 Addendum 5
“And even though the people at Sony kept coming back with the right answers to our questions, no one really knew how lithium would hold up.“ page 55 Ibid. (emphasis added) docket 80 Addendum 5 “The Latitude with the lithium ion battery was introduced in August 1994.” page 55 Ibid. docket 80 Addendum 5
The book Direct from Dell Strategies That Revolutionized an Industry was provided to Defendants. Michael Dell was a listed expert The book Direct from Dell Strategies That Revolutionized an Industry docket 80 Addendum 5 , by Michael Dell Chairman and CEO, Dell Computer Corporation with Catherine Fredman, Copyright 1999 was provided to Defendants. Satisfying plaintiffs requirements regarding Michael Dell’s expert opinions as quoted above per Fed. R. Civ. P. 26(a)(2)(B). The book reviewed his qualifications and the gist of his opinion.
Not a good year for the past 12 months so far , with the great SONY recall of all it's defective incendiary batteries in various laptops and notebooks , a factory fire virtually destroying Liteon's LCD displays for portable computers , and now a factory fire at a lithium ion battery factory !
As Murphy would say what can go wrong is always inverse to the ratio of it's importance, so what is next , could it be a factory fire at the plant supplying all Blueray players ?
Ouch , annus horribilis !
lets face it, li-ion batteries are like rats - theres pretty much one in existance for every man woman and child on the planet- they've been in virtually every rechargable portable electronic gadget for the better part of the last 10 years, and onl a handful have ever gone wrong
ive witnesed a lot of Ni-Cad and NiMH batery packs spontaneousl igniting in my readio controled car days to know li-ion arent alone in the burning up stakes
properly designed and calibrated li-ion battery packs have more safety features in them than your average nuclear power plant, if you look at just about every exploding battery story youl see they all have one thing in common- the use of non original generic chinese knnock off batteries that dispense with most of the expensive monitoring circuitly and careful calibration in the genuine battery packs
ive only ever had 1 li-ion pack fail on me and that was a £3.99 chinese copy dell axim x50 battery (thankfully while it was in the dell desktop charger) since then ive stuck with genuine batteries and have had no problems
what scares me the most thogh is people wth those cheap chinese mega capacity camcorder batteries pressed against their face while there taping something or another, a singed lap is one thing but having one of those vent with flame into your face would be horiffic...
I remember my days associated with the battery industry.
You can build as many safety devices into the cell as you like, but the components are still very dangerous.
Lithium ignites on contact with water.
My guess is that this fire involved the component materials rather than finnished stock.
It is not the first Lithium cell plant to have a fire.
It is extremely difficult to stop a Lithium based fire, once it starts.
Setting up a battery plant using this technology is not a five minute job and is extremely costly.
What I saw was that whilst you could buy many brands of cell, manufacture of the more specialist types was concentrated at one or two plants.
One plant I visited had 10 major brands as customers, each selling under their own label.
The battery world will get more dangerous as designers look for more enegry from a smaller space. To get the higher energy density requires the use of more volatile chemicals.
Posted Wednesday 26th March 2008 13:32 GMT
"They probably do have alternative sources of supply and I'll bet that other manufacturers will quickly ramp up production to fill demand.
That won't stop them all using this as an excuse to jack up prices though."
Yes, this is true, but it's not quite that simple. Typically when a business has to ramp up production, in the short run their per unit costs will increase significantly (think about what happens when you bring in loads of new, inexperienced workers to provide the humanpower necessary to ramp up production -- efficiency goes through the floor and costs go through the roof). The remaining suppliers might turn an extra profit still (otherwise, what would be the point of ramping up production?), but not nearly as much as you'd think.
"This is exactly what happened many years ago when a Taiwanese DRAM plant went on fire. You could still get the stuff with no trouble, but 1 and 4 meg SIMMS (as made by world + dog at the time) became eye-wateringly expensive overnight due to the "shortage"."
Had they not increased prices, there probably would have been a shortage. Basic economic theory dictates that when supply decreases and demand stays the same, the price must be increased to prevent shortages. If you think about it, this makes sense -- fewer people will be willing to buy the product at the higher price, so the quantity of the product demanded will fall (hopefully) to roughly the same quantity of product that the remaining manufacturers are able to produce. It's not an exact science, though, and merchants get it wrong all the time. More than likely, they overshot on the dram pricing a bit, but this type of mistake is usually quickly caught and corrected for. As product sits on the shelf (or in warehouses) for too long, the merchant or supplier begins to drop prices to get it moving again. After all, warehousing surplus product is an additional expense that no one wants to pay.
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