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to accommodate a rising Japan and Germany had after World War I。 
If current trends hold; China will go from importing 7 million barrels of oil today 
to 14 million a day by 2012。 For the world to accommodate that increase it would have 
to find another SaudiArabia。 That is notlikely; which doesn't leave many good options。 
〃For geopolitical reasons; we cannot tell them no; we cannot tell China and India; 
it is not your turn;〃 said Philip K。 Verleger Jr。; a leading oil economist。 〃And for 
moral reasons; we have lost the ability to lecture anyone。〃 But if we do nothing; 
several things will likely result。 First; gasoline prices will continue to trend 


higher and higher。 Second; we will be strengthening the very worst political systems 
in the world…like Sudan; Iran; and Saudi Arabia。 And third; the environment will be 
damaged more and more。 Already; the newspaper headlines in China every day are about 
energy shortages; blackouts; and brownouts。 U。S。 officials estimate that twenty…four 
out of China's thirty…one provinces are now experiencing power shortages。 
We are all stewards of the planet; and the test for our generation is whether we will 
pass on a planet in as good or better shape than we found 
412 
it。 The flattening process is going to challenge that responsibility。 〃Aldo Leopold; 
the father of wildlife ecology; once said: 'The first rule of intelligent tinkering 
is save all the pieces;'〃 remarked Glenn Prickett; senior vice president of 
Conservation International。 〃What if we don't? What if the 3 billion new entrants 
start gobbling up all the resources? Species and ecosystems can't adapt that fast; 
and we will lose a major portion of the earth's remaining biological diversity。〃 
Already; noted Prickett; if you look at what is happening in the Congo Basin; the 
Amazon; the rain forest of Indonesia…the last great wilderness areas…you find that 
they are being devoured by China's rising appetite。 More and more palm oil is being 
extracted from Indonesia and Malaysia; soybeans out of Brazil; timber out of central 
Africa; and natural gas out of all of the above to serve China…and; as a result; 
threatening all sorts of natural habitats。 If these trends go on unchecked; with all 
the natural habitats being converted to farmland and urban areas; and the globe 
getting warmer; many of the currently threatened species will be condemned to 
extinction。 
The move to sharply reduce energy consumption has to come from within China; as the 
Chinese confront what the need for fuel is doing to their own environment and growth 
aspirations。 The only thing…and the best thing…we in the United States and Western 
Europe can do to nudge China toward that understanding is set an example by changing 
our own consumption patterns。 That would give us some credibility to lecture others。 
〃Restoring our moral standing on energy is now a vital national security and 
environmental issue;〃 said Verleger。 That requires doing everything more 
seriously…more serious government funding for alternatives; a real push by the 
federal government to promote conservation; a gasoline tax that will drive more 
consumers to buy hybrid vehicles and smaller cars; legislation to force Detroit to 
make more fuel…efficient vehicles; and yes; more domestic exploration。 Together; 
added Verleger; that could help stabilize the price at around 25 a barrel; 〃which 
seems to be the ideal range for sustainable global growth。〃 
In sum; we in the West have a fundamental interest in keeping the American dream alive 
in Beijing and Boise and Bangalore。 But we have to stop fooling ourselves that it 
can be done in a flat world with 3 billion potential new consumers…if we don't find 
a radical new approach to en413 
ergy usage and conservation。 If we fail to do so; we will be courting both an 
environmental and geopolitical whirlwind。 If there was ever a time for some big 
collaboration; it is now; and the subject is energy。 I would love to see a grand 


China…United States Manhattan Project; a crash program to jointly develop clean 
alternative energies; bringing together China's best scientists and its political 
ability to implement pilot projects; with America's best brains; technology; and 
money。 It would be the ideal model and the ideal project for creating value 
horizontally; with each side contributing its strength。 Said Scott Roberts; the 
Cambridge Energy Research Associates analyst in China; 〃When it comes to renewable 
technology and sustainable energy; China could be the laboratory of the world…not 
just the workshop of the world。〃 Why not? 

::::: TWELVE 
The Dell Theory of Conflict Prevention 
Old…Time Versus Just…in…Time 
Free Trade is God's diplomacy。 There is no other certain way of uniting people in 
the bonds of peace。 …British politician Richard Cobden; 1857 
Before I share with you the subject of this chapter; I have to tell you a little bit 
about the computer that I wrote this book on。 It's related to the theme I am about 
to discuss。 This book was largely written on a Dell Inspiron 600m notebook; service 
tag number 9ZRJP41。 As part of the research for this book71 visited withthe management 
team at Dell near Austin; Texas。 I shared with them the ideas in this book and in 
return I asked for one favor: I asked them to trace for me the entire global supply 
chain that produced my Dell notebook。 Here is their report: My computer was conceived 
when I phoned Dell's 800 number on April 2; 2004; and was connected to sales 
representative Mujteba Naqvi; who immediately entered my order into Dell's order 
management system。 He typed in both the type of notebook I ordered as well as the 
special features I wanted; along with my personal information; shipping address; 
billing address; and credit card information。 My credit card was verified by Dell 
through its work flow connection with Visa; and my order was then released to Dell's 
production system。 Dell has six factories around the world…in Limerick; Ireland; 
Xiamen; China; Eldorado do Sul; Brazil; Nashville; Tennesee; Austin; Texas; and 
Penang; Malaysia。 My order went out by e…mail to the Dell notebook factory inMalaysia; 

where the parts for the computer were immediately ordered from the supplier logistics 
centers (SLCs) next to the Penang factory。 Surrounding every Dell factory in the world 
are these supplier logistics centers; owned by the different suppliers of Dell parts。 
These SLCs are like staging areas。 If you are a Dell supplier anywhere in the world; 
your job is to keep your SLC full of your specific parts so they can constantly be 
trucked over to the Dell factory for just…in…time manufacturing。 
〃In an average day; we sell 140;000 to 150;000 computers;〃 explained Dick Hunter; 
one of Dell's three global production managers。 〃Those orders come in over Dell。com 
or over the telephone。 As soon these orders come in; our suppliers know about it。 
They get a signal based on every component in the machine you ordered; so the supplier 
knows just what he has to deliver。 If you are supplying power cords for desktops; 
you can see minute by minute how many power cords you are going to have to deliver。〃 
Every two hours; the Dell factory in Penang sends an e…mail to the various SLCs nearby; 


telling each one what parts and what quantities of those parts it wants delivered 
within the next ninety minutes…and not one minute later。 Within ninety minutes; trucks 
from the various SLCs around Penang pull up to the Dell manufacturing plant and unload 
the parts needed for all those notebooks ordered in the last two hours。 This goes 
on all day; every two hours。 As soon as those parts arrive at the factory; it takes 
thirty minutes for Dell employees to unload the parts; register their bar codes; and 
put them into the bins for assembly。 〃We know where every part in every SLC is in 
the Dell system at all times;〃 said Hunter。 
So where did the parts for my notebook come from? I asked Hunter。 To begin with; he 
said; the notebook was codesigned in Austin; Texas; and in Taiwan by a team of Dell 
engineers and a team of Taiwanese notebook designers。 〃The customer's needs; required 
technologies; and Dell's design innovations were all determined by Dell through our 
direct relationship with customers;〃 he explained。 〃The basic design of the 
motherboard and case…the basic functionality of your machine…was designed to those 
specifications by an ODM 'original design manufacturer' in Taiwan。 We put our 
engineers in their facilities and they come to Austin and we actually codesign these 
systems。 This global teamwork 

brings an added benefit…a globally distributed virtually twenty…four…hour…per…day 
development cycle。 Our partners do the basic electronics and we help them design 
customer and reliability features that we know our customers want。 We know the 
customers better than our suppliers and our competition; because we are dealing 
directly with them every day。〃 Dell notebooks are completely redesigned roughly every 
twelve months; but new features are constantly added during the year…through the 
supply chain…as the hardware and software components advance。 
It happened

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