Penny Wise, Pound Foolish

Dell's woes are in the news, how they had potentially millions of business/education computers with faulty motherboards.

There's quite a story there. Apparently, there was a family of electrolytic aluminum capacitors manufactured in Taiwan that became very popular even though they were only a fraction less expensive than the Japanese parts. Millions were used only to find that they were counterfeit, using an flawed formula that caused failure, often within six months.

Dell, of course, was not the only victim of these counterfeit parts. Many were duped (estimated cost of this specific set of faulty capacitors was estimated at $100 million (though I'm not sure that tally's done). Many no doubt had to replace equipment as a result. Dell's reaction stands out because of the denial of problems and replacing defective parts with more defective parts. You know, sharing the pain.

But the part that gets me is that the thinking that allows a counterfeit part to get into critical equipment, the thinking that saving a penny today without understanding the repercussions is fine. It's behind the BP fiasco. It's behind many so many companies being taken in by counterfeiters, too. They don't take the trouble - after all, many times, the consumer will be the one to suffer if the parts fail earlier than intended with minimal repercussions on their own.

But, as BP and Dell both know now, that thinking can backfire, rather dramatically.

We need to be thinking of this kind of thing as we make decisions today. I understand how tempting it can be to save a penny here and there today and figure that will do. But, in the long run, doing it right the first time always costs less than redoing it, particularly after it's been put into use, put into space, put in a critical component.

Often much much more.