Dell Thursday announced that Michael Cannon, the current president and CEO of electronics maker Solectron, will head a newly formed group that will oversee much of the company's operations, including manufacturing, procurement and suppliers.

Cannon's appointment is the latest sign of a management shakeup underway at Dell, and underscores the seriousness of the challenges facing the company.

Paul Tufano succeeds Cannon and will serve as interim CEO while the company searches for a permanent replacement.

Once the PC industry's superstar, Dell has struggled in recent quarters. The company lost its title of world's largest PC vendor to a resurgent HP. The company also faces scrutiny from the U.S. Securities and Exchange Commission into its accounting practices, which forced the company to delay filing its financial results for the second and third quarters of 2006.

In addition, Dell last year recalled millions of defective laptop batteries, after they were determined to pose a potential fire risk to customers.

In a bid to turn things around, Dell CEO Kevin Rollins was replaced last month by Michael Dell, the company's chairman. Dell's return was accompanied by warnings that the company's financial results for the fourth quarter, to be announced March 1, will fall below analyst expectations.

Cannon, who was president and CEO of hard-disk maker Maxtor -- now part of Seagate -- before joining Solectron, will be responsible for improving Dell's manufacturing operations after he starts work on Feb, 26. His job includes the responsibility for opening factories that are closer to customers and improving the company's supply chain, Dell said, noting that plans are underway to add new factories in India, Poland and Brazil.

The ultimate goal, according to Dell, is to improve product quality while shortening manufacturing times and reducing costs.

The IDG News Service is a Network World affiliate.