hen Round Rock, Texas-based Dell Inc. began its search five years ago for a location for a new sales and service center in Central Europe, two criteria stood out above the rest: labor and logistics.
      Today, the continuing importance of those factors is behind a Texas-sized expansion in the eastern German city of Halle (Saale) in Saxony-Anhalt.
      "No sooner had Michael Dell officially opened our new office building, than he was able to announce the expansion of the building," says Barbara Wittmann, managing director of Dell Halle GmbH. "The second construction phase has been completed so that we now have adequate room for 1,200 staff members. In a few years' time, we are hoping to increase our Halle work force to 1,500."
      The Dell computer revolution was built primarily on innovative changes to the way modern PCs are built-to-order and shipped directly to customers. Streamlining every aspect of the supply chain by utilizing new technology and new delivery models, Dell revolutionized the way computer orders are received, processed and fulfilled.
      Michael Dell's idea was to hire knowledgeable, flexible workers who could rapidly fulfill PC orders and get them as quickly as possible into the hands of eager customers.
      In Saxony-Anhalt, those two primary ingredients – labor and logistics – are contributing to even faster sales growth in Europe than Dell had planned.
      "When we began to look for a location for our new Dell sales and service center in the German-speaking region, what played a decisive role – apart from good infrastructure and flexible, modern-thinking administration – was a sufficient supply of qualified employees," Wittmann says. The economic drivers behind our final location decision were the local work force, proximity to our number one shipper FedEx, and proximity to other supply-chain organizations. "The latter was definitely the most crucial aspect, since our employees provide comprehensive advice and technical support to customers wishing to purchase information technology solutions and products."
      The new sales and service center in Halle (Saale) is Dell's second site in Germany. The $61-billion company, No. 34 on the Fortune 500 list, has publicly stated that it sees Germany as one of its strategic markets for expansion. In 2006, Dell posted 24 percent revenue growth in Germany, compared to 6 percent growth in Europe as a whole, according to Invest in Saxony-Anhalt.
      Dell's expansions in eastern Germany proves the location's strength and international competitiveness.
      "Dell is an extremely demanding global player, and the eastern German city of Halle offered the right mix of outstanding quality and highly qualified personnel at very competitive prices for its newest German service and sales center," Invest in Germany noted. "Complemented by local and state support, Invest in Germany and the Investment and Marketing Corp. of Saxony-Anhalt worked closely to secure this world-class investment for Saxony-Anhalt."
      Dell's Wittmann adds that the graduates of Saxony-Anhalt's widely varied higher education landscape "provide the company with an excellent basis." More than 12,000 applications have been submitted to Dell, which currently employs 700 at the site.       Dell is far from alone in choosing Saxony-Anhalt for reasons of labor and logistics. In recent years, the state has emerged as one of the dominant logistics locations in Germany. From 1991 to 2007, more than €356 million were invested into logistics facilities and logistics-related services in Saxony-Anhalt.
      The combination of a Central European location and strong transportation infrastructure forms the foundation of the logistics industry in this east German state. And that foundation is about to get even stronger, as the European Union plans to spend another €256 million over the next six years in upgrading the region's business-related infrastructure.
      The area is served by four major highways (the A2, A9, A14 and A38), the Leipzig-Halle International Airport (with DHL air cargo hub), two navigable waterways covering 600 kilometers, and Magdeburg's new Hanseatic Port.
      Railways like the InterCityExpress, InterCity, EuroCity and InterRegional offer multiple connections, as do the regional air fields at Magdeburg, Halle and Cochstedt.
      The area features five inland ports, major freight village (Hansehafen Magdeburg) and rail freight hub (Magdeburg Sudenburg). Halle (Saale) has the largest railway freight depot in Saxony-Anhalt.
      The international airport continues to grow to keep up with demand. Total air cargo per year now exceeds 101,258 tons, while passenger traffic in 2007 topped 2.7 million.
      The new DHL European Hub, opening this year, will process up to 100,000 parcels and letters per hour at the €70-million plant. By 2012, DHL plans to employ 3,500 workers on site.
      Throughout the Central Germany region of Saxony-Anhalt, Thuringia and Saxony, an estimated 160,000 people work in the shipping and logistics sectors. Experts say that number will rise to 260,000 by 2015.
      The Investment and Marketing Corp. of Saxony-Anhalt says that companies are attracted to the state for a variety of reasons, including the government's flexibility, generous incentive programs, political stability and abundant educational resources.
      The lowest wage unit costs in Germany also make Saxony-Anhalt an attractive location for expanding European employers.
      Saxony-Anhalt's state-of-the-art transportation and logistics infrastructure enables the rapid movement of goods, the agency notes, adding that the Central European location provides optimal access to Eastern European markets.       The Otto-von-Guericke-Universität Magdeburg is one of several universities in Germany to offer a course of study in industrial engineering logistics. Other research and education resources in logistics are provided at Martin-Luther-Universität in Halle/Wittenberg and FH Magdeburg/Stendal, FH Merseburg, FH Harz and Hochschule Anhalt.
      An example of the support available to companies can be found at the Fraunhofer Institute for Factory Operation and Automation IFF in Magdeburg. The IFF LogMotionLab is developing future-oriented solutions for supply chains, foot traffic flow, material flow and product life-cycle management.
      Airbus, Siemens, DHL and other firms use LogMotionLab's facilities to test the latest RFID (radio frequency identification) technologies and to develop customized solutions for industrial applications.
      Significant logistics investments in Saxony-Anhalt include EDEKA Hannover-Minden GmbH, with a distribution center in Osterweddingen near Magdeburg.
      At least 12 international logistics service providers call Saxony-Anhalt home. The state's logistics work force totals 19,000 jobs and represents about 6.7 percent of the total state labor pool.