Conference 7.286::digital

	re .0


	I heard a similar roumor. Makes me sad and confused, too.

		
	If  this  roumor  is  true,  Colorado  disk  drive  manufacturing
        facility is facing capacity problems.

	If this roumor is  true,  DEC  is  going  to  extend the Colorado
        manufacuting floor by 19500 sq feet.

	If this  roumor  is  true, DEC is going to invest around $12M for
        hundrets of new hires and manufacturing equipment.

	If this roumor  is  true,  DEC  has  BIG  postings  in California
        newspapers and is using headhunters for hiring DLs and ILs. 



	On the other  hand DEC is spending lot of $$$$$s to shut down the
        German disk drive manufacturing plant (KBO) by end of June '94.

	This  plant  has already sent a transfer team  to  Colorado  last
        summer.  Last Spring the official plan was to  transfer  parts of
        Colroado's  disk  drive  production to KBO.  But the program  had
        been  halted  during  the  transfer  and KBO is now shutting down
        because...


> ................................., Digital has been left with an excess 
> capacity in high cost/high capability storage manufacturing."
>....
	(From the official announcement [19-Aug-1993])



	This MUST be a new way to save costs. 

     

	
        I should be happy, that DEC could sale more drives than ever -

        but I'm very sad because DEC will do (or try) it without me.



	Thomas_was_member_of_the_KBO_transfer_team_in_CXO 
	
		


19-Aug-1993 Announcement:
		
> Posted-date: 19-Aug-1993
> 
>                   DIGITAL EQUIPMENT CORPORATION ANNOUNCES
>      ITS INTENTION TO CLOSE ITS GERMAN STORAGE MANUFACTURING PLANT
> 
> 
> MAYNARD, Mass. -- August 19, 1993 -- Digital Equipment Corporation informed its 
> employees today that it intends to close its manufacturing facility in 
> Kaufbeuren, Germany. The plant, which employs approximately 600 people, 
> manufactures magnetic disk drives for information storage for computer systems.
> 
> The process for the plant closing will be a gradual phase-out of operations over 
> the course of the next ten months. The process is expected to be completed by 
> June of 1994.
> 
> The details of the plan to close the plant were outlined today to employees
> in group meetings at the Kaufbeuren site. Digital will offer regular employees
> whose jobs are eliminated a number of benefits including a financial support 
> package based on years of service to the company and professional outplacement 
> assistance.
> 
> Charles F. Christ, Digital's vice president, Storage Business Unit, said,
> "Storage technology, like all technology in the computer industry, has 
> experienced rapid advances in the last few years. Disk drives have become 
> low-margin commodity products designed for less complex manufacturing processes. 
> As a result of this industry trend, Digital has been left with an excess 
> capacity in high cost/high capability storage manufacturing."

>
> Christ continued, "Digital's strategy is to position our manufacturing capacity 
> where we can make optimal use of our assets. It is on the basis of this 
> strategic intent that we have made this difficult decision to close the 
> Kaufbeuren plant. Historically, the Kaufbeuren employees have run an efficient 
> operation delivering high-quality work. The plant and its employees have made a 
> valued contribution to Digital's success."
> 
> The German manufacturing operation began in Asch as a final assembly and test
> facility. It was moved to Kaufbeuren in 1981 and was chartered to specialize in 
> the manufacture of complex storage products in 1983. 
> 
> The disposition of the 277,000-square-foot (26,000-square-meter) building, 
> located on 57 acres (23 hectares) of land, has not yet been determined. Digital 
> owns the site and will work with public and private sector organizations to find 
> a productive external use for
> it. 

> Digital Equipment Corporation, headquartered in Maynard, Massachusetts, is the 
> leading worldwide supplier of networked computer systems, software and services.
> Digital pioneered and leads the industry in interactive, distributed and 
> multivendor computing. Digital and its partners deliver the power to use the 
> best integrated solutions - from desktop to data center - in open information 
> environments.
> 
 >                                     ####
> 
> CORP/94/254  
> 

    re .0
    High German labor rates have forced Mercedes (building a large plant
    in northwest Alabama) and BMW (likewise in Spartanburg) to move
    significant manufacturing capacity to the U.S.; Digital is only
    responding to the same economic forces.   

CXO (Colorado Springs) has floor space sitting empty (presumably
for tax purposes).  And is starting to rent office floor space to MCI.

If the rumor mill is to be believed, disk drive manufacturing will be
expanding (back) into the empty floor space.  I have seen bulk interviews
for manufacturing people - I have no idea how many people they are looking
for, but they had a bullpen of people waiting around all day for their
turn at an interview...

But let us not forget that as we speak, Digital is building a disk
manufacturing plant in Malasia, and that facility is supposed to do all the
volume disk drive manufacturing (at 1/10 the labor cost...).  Adding
permanent employees to CXO does not seem intelligent, if volume disk
drive manufacturing isn't going to stay in CXO.  Of course, the rumor
of jobs in CXO *may* be for temp people...

	Joe

    CXO will be hiring a ton of people (I'm not at liberty to give exact
    figures) and as many as 50% will be permanent DL.
    
    The Malay facility in Panang will manufacture the low-margin drives
    (due to the low labor costs) while CXO will continue to build the high
    margin, high performance (7200 RPM high capacity) drives for the
    forseeable future.
    
    The reason for the hiring is that Sales has been instructed to push
    disk products (along with W/S etc.) and our volume projections for the
    next few quarters have been increased dramatically.
    
    					John G.

    
  re .3

>    re .0
>    High German labor rates have forced Mercedes (building a large plant
>    in northwest Alabama) and BMW (likewise in Spartanburg) to move
>    significant manufacturing capacity to the U.S.; Digital is only
>    responding to the same economic forces.   


  I don't know, where you got these informations from.    They contradict
  totally to  the message which the KBO employees got from vice president
  Charles F.  Christ when he was announcing the plant shutdown in KBO.  

  Last summer special task forces discussed how to reduce the 

> .............................................................. excess 
> capacity in high cost/high capability storage manufacturing."
>....

  These task forces attested that the  labour  cost  of  CXO  and KBO are
  (were) compareable!

  

  re .5
  
  What a surprise:

>    The reason for the hiring is that Sales has been instructed to push
>    disk products (along with W/S etc.) and our volume projections for the
>    next few quarters have been increased dramatically.
>    
>    					John G.
  

  Sounds like  DEC  was not very interested in selling disk drives during
  the last years.  Need Sales to be instructed to sell something?

  Were't they pushed to sell the 2.0Gb, 3.0GB,  3.5 GB and 4.0GB 5�" disk
  drives from KBO? Oh my god. Somebody must have forgotten.


  And:  It seems to me that last summer  NOBODY  knew that Sales is going
        to be pushed to sell drives. Very confusing!         

       
        Yes, who is responsible for this?


� Thomas �  

    
    Folks,
    
    Malasia, Germany, Colorado, ...
    
    I don't really care where the disks are manufactured AS LONG AS WE
    MANUFACTURE ENOUGH !!!!
    
    I have a $2.1M order which is pending right now due to an 80 (EIGHTY)
    days lead time for the RZ26 and RZ26L !!!!!!!!!!!!!!!!!!!!!!!!!!!!!
    
    Bob Palmer said last night that Digital has, indeed, reported a loss
    but the company has a backlog of $450M.
    
    Try reporting the backlog to NYSE ...
    
    I'm desperate !!!
    
    Regards,
    Eran
    
                                         

  
  re .7
  
>    I have a $2.1M order which is pending right now due to an 80 (EIGHTY)
>    days lead time for the RZ26 and RZ26L !!!!!!!!!!!!!!!!!!!!!!!!!!!!!
    
       
  DEC could  make  so much money.  Nearly all equipment was ready for the
  product transfer from  CXO to KBO.  Everybody in KBO was focused on the
  transfer and ready for  take-off.  Then during boxing the equipment the
  transfer had been halted.  Weeks of discussing manufacturing strategies
  followed the halt.

  Oh boy, today KBO could be in the high volume phase.  Building, testing
  and shipping thousands of drives....

  Who is........? 


                        � Thomas �
          

    
    	I heard last week from the mouth of a top manager, that the reason
    that we have long lead times isn't because we don't have the capacity
    so much as "the sales force fail to forecast accurately what they are
    going to sell!"  A real Hornets' nest stirring job, I thought!
    
    	This top manager was trying to put the blame squarely on the sales
    force for underestimating what they would sell!
    
    				Malcolm.

re: why does sales have to be told to sell disk drives

Until recent years, Digital drives were sold only to users of Digital
hardware, now we are in the OEM market.  Entering to OEM market provides
higher volumes, higher volumes produce lower unit costs, lower unit
costs sells more OEM drives...

I'd believe that the storage sales predections don't match the sales, 
new controller sales are aroune 350% of plan - and some of the required
parts (now single sourced...) are on a 26 week lead time... 

Drive manufacturing is underproducing relative to the current plan.
But these people have a lot to learn (and they are learning!).
They are now making (or will soon be making) more drives in a
week than they used to make in a year.  I believe planned volume is 
doubling each quarter.  

There is a lot to learn as volumes increase, and some of the competition
out there is drowning in their own surplus (how much would you pay for
last year's top of the line drive 12 months later?  Disk products rot
on the shelf.)  Digital doesn't have any product on the shelf, we'd
sell more if we did.

Why did we close KBO?  I don't know.  Maybe the real estate value in Germany
is better than Colorado.  Maybe they wanted to be in the Pacific Rim rather
than Europe.  The company was pushing to consolidate sites/functions in
order to reduce cost.  But cutting capacity doesn't seem smart when
customers are waiting on parts (or going elsewhere!).

	Joe

    Before anyone believes that sales is to blame for these problems, they
    should examine the forecasting process. Therein lies the problem!

Re:                  <<< Note 2885.11 by DYOSW8::BROWNE >>>

>    Before anyone believes that sales is to blame for these problems, they
>    should examine the forecasting process. Therein lies the problem!

There's a process?  :-)

I've seen product forecasting done many different ways in my 13 years with
Digital.  None of them has ever been accurate.  Why?  It's like forecasting 
anything.  There are factors beyond the control of anyone in the corporation 
which greatly influence the actual demand.  And noone has a crystal ball that 
works...

So it's an inaccurate science at best.  When people finally realize that, do 
their best to be flexible to accommodate the unexpected, and stop pointing 
fingers, then we'll be a lot better off.

-  David

    Folks I published what I'm going to say again today five years ago
    in this same notesfile.
    
    DEC decided to TFSO so much of manufacturing that our basic flexibility
    is NONE !    Not only we are suffering in disk drives, but PC's, Alphas
    and other product leadtimes have been increased as our products are
    starting to take off.    Sad situation to be in.   When originally
    published, I stated that GM was in a similar situation with the Saturn.
    It seemed as if we copied the 'Saturn Experience', the sales are there
    as we are expanding into OEM and industry standard markets, however
    capacity in manufacturing can not keep up with current demand.   BTW
    almost all manufacturing plants are working 7 days a week, 24 hours a
    day, so you know what type of flexibility you have, NONE !.
    
    The worst is yet to come, because we are going to put the capacity by
    hiring employees and puchasing the equipment, but sadly the customers
    will have depart leaving DEC sitting in $$$$$$$$$$$$$$$$$$$$$$$$$$$
    of inventories.    What a disaster............as the saying goes.
    
    'In a declared war, people will not die'.   - When the decision is
    so obvious, why you keep marching towards doomsday ??????

RE: .13

	Not to totally refute anything you said, but just for an
	example, I ordered a DECpc XL and got a 2 week leadtime. 
	Personally, I don't think that's bad, especially when I
	hear the horror stories of Gateways shipping. (Not knocking
	the product, just the shipping)

	Looking forward to my new toy,

						mike

The forcasting process has almost always left manufacturing holding the bag.
we get measured on our inventory, we buy to support the build forecast only
to have the forcast downsized just a couple of weeks before the scheduled
build. we eat the inventory...and it costs us big $ to let those parts sit 
on the shelf. The  opposite happens too, forecast is too low, parts aren't
available and many are single sourced with long lead times. It feels like a 
no-win situation at times.

manufacturing capacity isn't what it used to be, in ASO they're working 3
shifts and in some areas 7 days a week. people don't get weekends or holidays
off, almost half of the workforce are temps, (train and re-train the "flexable"
workforce) etc. and as can be expected morale drops as the load increases.

dave

    to all the idiots that blame forecasting "process"  for problems....
    
    wake up....
    
    
    What do you think?  A sales rep only needs to look out the window and
    count the people in line waiting to come in and buy?
    
    so a stupid picture....
    
    We don't work in a vacuum you know.  It like some big world war two
    furball out there.  Here you are lining up on Sun and NCR fries you
    dead.  
    
    Everybody lies about their product.   There is no such thing as next
    week.  You flame the competition or he flames you right now, this
    flight, today.
    
    Get real.....
    
    Is your paycheck cut by 20%.  I'll bet not.
    
    whiners...............  
    

� Before anyone believes that sales is to blame for these problems, they should
� examine the forecasting process. Therein lies the problem!

I always wondered why we spend so much of our time forecasting when we should be
out selling.  Forecasts I've seen are pretty much a joke, which makes setting
someone's salary to an arbitrary forecast a cruel joke.

Paul

    
    
    
    "Yes, we have no bananas, we have no bananas today"
    
    just about sums up the situation with shipments.
    

    I don't doubt that Sales isn't forecasting well.  In the past, your
    business operations person would come by and say, "What are you going
    to sell in the next six months?".  And we would look at him like he was
    crazy, and mumble something like, "Well, I'm working on a proposal to
    upgrade two 8550's, but their Finance guy wants them to guy 28
    MicorVAXes instead; but if they buy the 28 MicroVAXes, they'll probably
    buy third-party disks.  Another deal I'm working on is for an 8800 with
    a math processor, but that might go through one of our VARs, so should
    I forecast that?  If they buy package A, I get to sell it direct, but
    if they buy package B, they'll probably buy H-P unless I can convince
    the package B VAR to pass through a big allowance."
    
    "Yeah, but what should I put you down for?"
    
    "Put me down for one 8700, 14 MicroVAXes, and an 8800 through
    channels."
    
    After talking to all the reps, the business ops person would massage
    the numbers into something that looked reasonable.  To do that, he
    would use his gut feel and his judgment, balancing a lot of "might
    happens" and "probably won'ts".  The sum total of all these human
    judgments would roll up, and due to the mathematical phenomenon known
    as the "law of large numbers", the variations would tend to cancel each
    other out.
    
    Nowadays, they have a hard-to-use, incomprehensible system that's slow
    as heck across the network.  You can spend an hour to input or update
    three opportunities, fighting the system all the way.  There's nobody
    probing you, getting a feel for how likely the tradeoffs are.  There's
    no way to explain to the stupid system that there are three or four
    ways the deal might go down, each with a wildly different cost and
    configuration.  And every rep judges the probabililty of winning
    differently.  A conservative rep doesn't forecast anything above 50%
    till the deal is almost won.  A wild rep forecasts most everything at
    80%.
    
    Then the stupid system blindly rolls all this out in a spreadsheet, and
    "cockpit jockeys" believe the numbers.  They have no gut feel.  They
    are like fighter pilots trying to fly combat by watching the instrument
    panel.
    
    And then somebody blames Sales for poor forecasting.  Get real.  Find a
    job where you have some kind of idea of what reality is.

    I have to wait months for DEC 3000-300 or -600.  I have to wait 6 weeks
    for networks hubs, repeaters, etc.
    
    I can get SW and PC's very quickly.
    
    So what could be broken that allows PC's and SW to have great delivery
    and Alphas and Network prods. poor delivery?  It isn;t forecasting
    because I don;t believe we can forecast PC's or SW very well.  It
    shouldn;t be order processing, because that is the same.  It isn;t
    building the stuff because my customer can order the network stuff from
    a distributor inthe US and get 2 week delivery to Hong Kong (at much
    less money by the way).
    
    When I used to be involved in forecasting the problem was that the
    total number of the forecast had to add up to the units goals.  And you
    couldn;t suggest notions like 'we really want RZ28's, but if you cannot
    build them, give us RZ26L's instead'  So we had to add up to a
    pre-determined number with a mix based on manufacturings forecast of
    first revenue ship dates.  I believe, and correct me if I am wrong,
    that the FRS dates are no more accurate than the field forecast.
    
    And then the bean counter spin doctors get into the act.  In my
    simpleminded way I divide our Bean COunters into three types.
    	1.  Control Freaks who love the power of saying 'I will not sign
    	this form until you kiss my butt.'
    
    	2.  Success freaks who make sure they never have any risk on their
   	 own backs.  They make sure the individual goals add up to 150% of
    	their own goal so that even if many of the sales reps blow their
    	numbers, the beanies can still be successful.
    
    	3.  Business people who really understand what business we are in
    	and are hampered as much by types 1 and 2 as are the rest of us.
    
    I bet, and I know I am probably offending a bunch of people who spent a
    long time studying financial management and believe they are saving the
    company, that behind the products in good supply you will find someone
    who is from the 'If we build it they will buy' school and is taking big
    personal risk.  Behind the short supply products you will find some
    control freak who is afraid to spend money until they are guaranteed
    success.
    /joel

    
    It really doesn't surprise me that Storage, an organization where:
    (as per what the troops in the trenches are told from On High)
    ...There is no right or wrong.
    ...There is no 'correct' solution to a problem.
    ...There are only shades of grey.
    ...There is no Reality, only Perception.
    
    .....cannot produce an accurate forecast.
    This is the result of the values and philosophies in operation.
    
    What's really funny about this situation is that they just got done
    tearing out perfectly good cleanrooms in order to 'empty' the space 
    for tax purposes. Now they must rebuild/retool.
    
    I'm sure however, that under the perverse metrics we operate on
    SOMEONE SOMEWHERE was promoted for showing a paper profit for the 
    empty space, even if it only lasted a week.
    
    Who is John Galt ? 
    
    
    

    Boss (whoever's in charge in the field this week): WHat's the forecast?
    Branch Manager: $X million
    Bosses boss: We've set a target this quarter for $yM, please pass on
    Branch Manager: Hey rep, your forecast of $X is not realistic because
    our BUDGET has just increased by 10% so you have to take on an
    additional budget of Z% If you don't make budget, your compensation
    will be decrease.
    Rep: But boss, I already told you that we should only expext $XM from
    the customer.
    
    So: Who above told manufacturing what the anticipated business was and
    whoever that was, should they be blamed?

    You know what's really sad about all of this?  It's that all the gurus
    of Digital marketing are out selling "time-to-market"/integrated
    product development solutions and consulting, and inside our very own
    company we aren't able to resolve a critical disjointed process issue
    between manufacturing and sales.  And it has very real impacts on
    people's jobs and morale, and sales reps' paychecks.
    
    Integrate thyself first, then we'll have something to talk about and
    sell. 

re forecasting:

Back in 1986, I was a contract programmer for a storage MIS dept, and
I was asked to take a look at a forecasting application that was being
run on a TOPS-10 system at the Mill that had a performance problem.
Part of my work involved running the program with old data as a
benchmark, and while I was doing this I noticed that the numbers from
month to month were always pretty close to each other; as I looked
into this a little further, it became apparent that the program was
generating numbers based on the _number of input records_, not the
actual input data. No one had ever caught this, and when I pointed this
out (and the error was verified by other programmers), lots of
meetings happened, but as far as I know, no one was ever held
responsible for not trying to match the actual sales against the bad
forecasts (and I don't know if the numbers were ever checked after the
application was fixed).

/harley

re .4,.5:
�But let us not forget that as we speak, Digital is building a disk
�manufacturing plant in Malasia, and that facility is supposed to do all the
    
The country is Malaysia, and I believe you're referring to Penang when you
said Panang (.5). I just like to pick nits, even though I'm not from
Malaysia.

Actually I have not heard about any Penang plants, but there is definitely
one coming up in Batam, Indonesia. It's an island about 20 minutes
hydrofoil ride from Singapore (incidentally also an island). I hear they're
supposed to start with building headstacks.

  .re 'forecast'

  Just a story:

  
  A person  bought a new car, and after driving a while in his new car he
  saw that it's goning to run out of gas.  The gas  indicator  just  went
  into the red field.

  From  this  point  the  person usually had to drive 55 miles 'til home.
  And there he had gasoline in his garage. 

  

  The  person  remembered  the  forecast of his dealer who told him  that
  he'll  have  a reserve for 60 miles when the indicator arrives the  red
  field.  The person also remembered  that  there  are  some roumors that
  this forecast may be not very relieable  and could vary �10 miles.  The
  person also remembered that some road constructions are  announced  for
  this week which could lead to bypasses.


  Oh look, there is a gas station!....  Open! 
  
  Oooops - $2.00 per gallon.....


  The  person thought about the cheaper gasoline in his  garage  and  his
  intention to save money and decided
  

        ...NOT TO buy gas and to continue driving.

  (60 miles reserve  minus 55 miles to drive = 5 miles will be left for a
  bypass ....... )  

  

  After 20  miles  he  arrived  at a real big road constuction and had to
  drive  a  bypass  which  was  10  miles  longer  than  the  usual  way.
  Additionally the dealer's  forecast was  really  bad:    The  car stuck
  after 50 miles.

  So, the person was 15 miles away from home and it was really HOT around
  him. He started walking - was fighting hard........


        ... a roumor says that a thirsty person bought gas from a 
            passing truck for $10 per gallon.


                                � 

----- 03-Aug-1993:

From:	NAME: Charles Christ @MLO           
	FUNC: Mass Storage Systems 
           
>    ....................... We believe that Digital's mass storage 
>    operations have significant growth potential.  Given the 
>    company's technological leadership, the strength and customer 
>    orientation of our people and the marketplace momentum we have 
>    generated in recent years, we will continue to develop the 
>    business.
    


----- 19-Aug-1993:    


>                    DIGITAL EQUIPMENT CORPORATION ANNOUNCES
>         ITS INTENTION TO CLOSE ITS GERMAN STORAGE MANUFACTURING PLANT
> 
> Charles F. Christ, Digital's vice president, Storage Business Unit, said,
> "Storage technology, like all technology in the computer industry, has 
> experienced rapid advances in the last few years. Disk drives have become 
> low-margin commodity products designed for less complex manufacturing processes. 
> As a result of this industry trend, Digital has been left with an excess 
> capacity in high cost/high capability storage manufacturing."
> 
> Christ continued, "Digital's strategy is to position our manufacturing capacity 
> where we can make optimal use of our assets. It is on the basis of this 
> strategic intent that we have made this difficult decision to close the 
> Kaufbeuren plant. Historically, the Kaufbeuren employees have run an efficient 
> operation delivering high-quality work. The plant and its employees have made a 
> valued contribution to Digital's success."
>
> 
>    The commercial reality for Digital is that it cannot maintain two 
>    storage manufacturing plants at Colorado Springs and Kaufbeuren, 
>    with the attendant cost structures. 



----- 01-Mar-1994:

> Digital - To build plant in Malaysia
>	{The Boston Globe, 1-Mar-94, p. 40}
>    Spurred by a five-fold increase in storage product revenue in the last
>  fiscal year, Digital said that it would build a new manufacturing plant in
>  Malaysia and would boost staffing at its plant in Colorado Springs.  The
>  112,000-square-foot plant in Penang, Malaysia, will make disk drives, with
>  production slated to start in June.  Expansion at the Colorado disk drive and
>  storage plant will boost employment by 700 to 3,500 Digital said.  The company
>  aims to triple its disk drive production at the Colorado plant by the end of
>  the year.  All disk drives made in Malaysia and most of those made in Colorado
>  will be sold to manufacturers other than Digital.


flip-flop-flip-flop-flip-flop-flip-flop-flip-floooooooooooooooooo...�BANG�

    I'm sure the employees in Kaufbeuren are dancing in joy about the
    booming mass storage industry in Colorado Springs an Malaysia.
    

    
    Another flip - flop...
    
    Yesterday afternoon Management announced that the Westfield, MA. site 
    is no longer for sale, it was put up for sale 13+ months ago. The past 
    year+ has not been "fun" around here... but most folks feel that remaining 
    as DEC employees is a good thing. Maybe there has been a reversal in the 
    case of the Mill as well?
    
    Carl

Just got a memo (here in CXO) saying that two press releases were made
yestarday (saw one on the news) and that both should be in VTX today,
saying that CXO manufacturing would be adding 700 jobs for increased
disk, tape and subsystems production.

    Extract from Colorado Springs GAZETTE TELEGRAPH (02-Mar-1994):

    Title: Digital/Springs storage division booms while rest of comany
           still struggles

    Author: Tom Kimmell
    
�   "Charlie Christ  (Digital  vice president of storage) is arguably the
�   best  managar  in    the    company"    said    Richard  Buchanan,  a
�   Massachusetts-based computer industry analyst  who  once  worked as a
�   Digital  strategic  planning  consultant.    "He's  taken  a  storage
�   business  that  was  morbiund  and  turned  it  into  a  competitive,
�   marked-focused  business  -   something  other Digital managers  have
�   failed to do."
   
�   Buchanan said that  outside  of  its  storage business, Digital lacks
�   good managers  who can recognize changes in the computer industry and
�   tap Digital's talented work force to  turn  around  the  company. The
�   Colorado Springs plant, regarded within Digital  as a competitive and
�   productive  plant,  should  serve as a model  for  the  rest  of  the
�   company, he said.


------------------------------------------------------------------------------

Okay, it's time to retell a story.

Back in 1982, I appeared at the "National Conference on Local
Networks", one of those commercial seminars held in Washington 
that gets lots of gummint folks spending training budgets.  I was 
there to talk on voice/data PBXs (why they're a bad idea).  Other 
speakers included John Adams, who was talking about OSI (already 
layer 5 was in trouble).

One of the presentations was by Local Digital Distribution Co., a 
M/A-Com subsidiary whose two produts were "RAPAC" (radio packet 
controller) and "CAPAC" (cable packet controller).  These were 
innovative means of bypassing your local Bell company.  By then, 
LDD was almost out of business.  CAPAC was a a flop, and after the 
speaker talked about the technology (not bad), he explained why it 
failed.

The cable TV companies, it seemed, weren't interested in a turnkey 
datacomm system.  They didn't really want to become common 
carriers.  They weren't in the transmission business.  They were in 
the entertainment business.  The cable itself is not their main 
concern; rather, it's "what's on HBO next month?"

I remembered this well when the ETV product line was introduced, 
which is why I never thought it would go anywhere.  When looking at 
my old conference notebook to get out the slide set, I noticed the 
name of the young presenter from LDD.  It was Charles Christ.

That's one savvy manager!

re Note 2885.34 by COMET::ZRENNER:

> �   "Charlie Christ  (Digital  vice president of storage) is arguably the
> �   best  managar  in    the    company"    said    Richard  Buchanan,  a
> �   Massachusetts-based computer industry analyst  who  once  worked as a
> �   Digital  strategic  planning  consultant.    "He's  taken  a  storage
> �   business  that  was  morbiund  and  turned  it  into  a  competitive,
> �   marked-focused  business  -   something  other Digital managers  have
> �   failed to do."
  
        For a while back when I was still in software engineering
        Charlie Christ was nominally head of a part of software
        engineering including "office", which was where I was.  It
        gave me a lot of hope, since I had heard good things about
        Christ (and "moribund" certainly described that part of our
        software business as well).  There was a lot of activity, in
        particular the "domain teams", and then nothing happened
        followed by yet another re-org in which Christ no longer had
        responsibility for software.

        I wish I knew what really happened behind the scenes at the
        higher levels.  Was there a power struggle?  Or did Christ
        just look at the mess software was in and decide he was
        better off sticking with storage?

        Bob

    *** Rumor ***



    Yesterday I've  heard a rumor that 


    - the launch plant in Shrewsbury  (needed  for launching the low-margin
      drives which are going to be  built  in  far-east) is cancelled. 

    - Engineers  which were hired for supporting the lauch  plant  are  now
      ordered to Colorado.

    - a high manager within storage is going to leave digital.


    Any confirmations?


    � Thomas �  

    If Charlie Christ, the brightest spot to come forward in this
    company in a long time, is thinking of leaving, maybe Palmer
    can offer him Win Hindle's $450k/year as an incentive to stay.
    Wouldn't that be the most ethical thing to do?  ;-)
    

    re: 37
    
    I work in the launch site group, and both construction and hiring are
    going full speed ahead.

    
    
    		I understand from a communications meeting with our
    	plant manager P.McCarthy, here in ABO, that most if not all of
    	the positions being filled are to be Temporary Employees along
    	the lines of Manpower,etc. Is the hiring of permanent full-time
    	Digital employees happening, and if so, to what degree ?? Just 
    	curious as I liked most of Colorado last time I was there.
    
    
    
    				Pablo
    

    re. -1 From what I hear at this end, 38% of the hiring at CXO will be
    permanent DL with authorization to go as high as 50%.
    
    					John G.

    
    
    		Thanks John, I sorta figured it'd be like manufacturing
    	here in ABO where we run about 50% Temp DL's on the floor. Helps
    	with the capacity planning when the parts don't show up. Still,
    	whether it's 38 or 50 , it's sad to see Digital let go of folks
    	in on place, just to hire them someplace else. Cei la vie'????
    
    		I wonder how much I don't know about Disk Mfg.}%)
    
    				Pablo
    
    

    Now that mgmt. has tasted blood aren't we all temporary?  Only some
    might get a thank you before we leave.
    
    

    	Temporary versus permanent cuts both ways. The normal permanent
    contract in Europe specifies 3 months notice on either side. I know of
    one case where a salesman handed in his notice, and DEC insisted on him
    spending 9:00 to 17:30 in the office for the next 3 months to ensure
    that his customer contact became out of date and of no value to a
    competitor.
    
    	I also know contractors (ex DEC employees) who are interviewing for
    other jobs. If they get a decent offer then they will leave at the end
    of the week and the DEC project will suffer.
    
    	If you don't offer permanence, you don't get permanence.

    re .45, work out of notice period
    
    So what could be done if he just didn't show up those three months?
    Fire him?  Even if work for hire for someone else during that time 
    were something he could be sued for in that country, I bet work for
    no money would be ok.  Some part of the story is missing, I think.
    
    		-John Bishop

    Re .45 and .46
    
    In the UK you can't work for someone else without the appropriate
    Income Tax and National Insurance (social security) paperwork.  This
    paperwork comes from your previous employer, or the prison you've just
    left, or the NI people if you've been sick or unemployed.
    
    If your previous employer won't give you the paperwork you can't start
    a new job.  Working for no pay is difficult because of the insurance
    liabilities of 'non-employees' on the premises.

RE: <<< Note 2885.47 by ATYISB::HILL "Don't worry, we have a cunning plan!" >>>

>>    If your previous employer won't give you the paperwork you can't start
>>    a new job.  

     THAT sounds truly frightening.

                                      Greg

             <<< Note 2885.48 by IMTDEV::BRUNO "Father Gregory" >>>

RE: <<< Note 2885.47 by ATYISB::HILL "Don't worry, we have a cunning plan!" >>>

>>    If your previous employer won't give you the paperwork you can't start
>>    a new job.  

     THAT sounds truly frightening.

                                      Greg

Well don't lose any sleep over it.  There are invariably ways round this kind
of administrative nonsense, whose accuracy I'd question in any case.  Delays in
obtaining paperwork usually get you put onto some kind of temporary status with
the tax and social security people: it's not a problem.  The IR and DSS would
much prefer you had a job!

Nick, a UK dweller who's had a temporary tax code for about seven of his twelve
working years...

    	Ah, but you *have* a job, and your current employer can prove that
    you are being paid for it, so the social security people are hardly
    going to work miracles to allow you to have a second full time job,
    when it is also in breach of a legal contract, and it is only for three
    months anyway.
    
    	Actually, the real hold is that if you fail to show up in the
    office of your current employer you can be fired for professional
    misconduct, and even if your immediate next employer might show some
    understanding of the situation it is possible that some later employer
    might follow up referrences. A strictly truthful "fired for
    professional misconduct" doesn't look too good.
    
    	In practice, the company pays you for three months to make chains
    of paperclips, and keeps you away from any confidential information,
    and in the meantime sends a new salesman round to all the customers
    with whom you had been dealing.
    
    	I have only ever seen this invoked for sales people, since making
    an engineer keep office hours achieves nothing (everyone knows that a
    good engineer never does anything useful during office hours), and most
    other employees (secretaries, people and project managers, ...) it is
    not worth the three months of salary to keep them inactive at a
    competitive company.
    
    	Why should anyone consider it frightening? You  enter into an
    employment contract which says three months notice on either side, and
    one of the participants to the contract decides to enforce their
    rights. If it was the other way round, and some manager was saying "you
    are out tomorrow" you would probably be glad to claim your 3 months
    salary.

Re: .47

>    In the UK you can't work for someone else without the appropriate
>    Income Tax and National Insurance (social security) paperwork.  This
>    paperwork comes from your previous employer, or the prison you've just
>    left, or the NI people if you've been sick or unemployed.

This is wrong.

If you do not have a P45 (for whatever reason) your new employer fills in a P46
(or somesuch - I can look it up if you really care) and sends it off to the Tax
Office. Until they get around to processing it, you get stuffed on an emergency
tax code so your new employer is obliged to assume that all (or most?) of your
tax allowance has been used up and you get a smaller pay packet than you would
otherwise be entitled to. Once the Tax Office sorts it all out you get any back
tax paid back. The only purpose of the P45 (I think) is to tell your new
employer your current tax status.    

> If your previous employer won't give you the paperwork you can't start
> a new job.

Yes you can. See above

> Working for no pay is difficult because of the insurance
> liabilities of 'non-employees' on the premises.

I cannot see any reason why you would not be an employee just because you do not
get paid. The difficulty with working for no money is that you don't get paid !
What is the point of ditching the DEC contract (where you get paid to file
paperclips for three months) and going to somewhere else where you get no money
and lose the income from DEC (since you broke the contract) and may even get
sued by DEC?

BTW: I seem to recall that if you are paid monthly you cannot be held to a
notice period longer than one month - regardless of what the contract says. But
this is from a "management seminar" from several years ago and I'm not sure I
was awake all the way through :-).


Antonio

    
 > The only purpose of the P45 (I think) is to tell your new
 > employer your current tax status.    
    
    It's other purpose is to prevent employer social security
    fraud.
    

    DIGITAL DRIVES INTO IDE ARENA

    Marketing director Peter Franklin said that Digital's Storage Business
    Unit would enter the IDE(AT) market this year.  He expects to see
    500Mbyte 3.5in drives with only one platter by the end of the year and
    the implication is that the entry level for all but the very cheapest
    PCs will more than double from 170-210Mbyte currently to 500Mbyte by
    early next year.

    Electronics Weekly, London.  23rd March 1994

Don't worry, it's definitive my last reply about KBO ... 



			****  OK. ****

I've got the message - KBO is closing and we are all loosing our jobs!
... and also I wouldn't like to turn the wheel back.



But the only thing I would expect as a human is an explanation WHY!

I think there must be some serious reasons to order such an action and 
I haven't got a single one. The company is responsible to the shareholders
and in that case the company is obviously wasting a lot of money, loosing 
customers and strength the competitors in the disk drive business.

Sometimes during the night I'm trying to sum up the costs:
- tidy up the KBO plant (packages, boring people 100% paid)
- hire at least the equivalent numbers of people in CXO and Or
- building up the new Malaysia plant
- Expansion of the building in Or 


Bernhard - still connected

    
    	Far be it from the truth, but I suspect that it isn't very far!
    
    	Could it be that wages/costs are much lower in Malasia?
    
    				Malcolm.  8-(

    	I am sure current costs in Malaysia are lower than in Germany, but
    in the meantime we have the costs of lost revenue and unhappy customers
    because we can't deliver on time. We have the costs of laying off
    German staff and closing down the plant. We have the costs of training
    Malaysian staff before they become fully productive, and the cost of
    construction of the Malaysian plant. All of this has to be recovered in
    cheaper wages before the change becomes profitable. It is comforting
    that the company management is looking at long term profit rather than
    short term costs. That no doubt explains the quarter's results.
    
    	And for how long is Malaysia going to have cheaper wages? With the
    crash of the Deutchmark after the war Germany had some of the cheapest
    skilled labour in the world, and it didn't take 45 years for it to
    become amongst the more expensive ones.

.55>>>          Could it be that wages/costs are much lower in Malasia?


BTW: The DL (direct labour) costs of our storage products here in KBO
     are about 3% !!! of the product costs


hmmm ... saves a lot 

Re:                  <<< Note 2885.57 by KBOMFG::KUISLE >>>

>BTW: The DL (direct labour) costs of our storage products here in KBO
>     are about 3% !!! of the product costs
>
>hmmm ... saves a lot 

The cost of sourcing the parts also neeeds to be taken into account.  Can you
demonstrate that the other 97% isn't also significantly higher in KBO?  And 
what about indirect labor?

-  David

    Singapore is the largest disk mfg site in the world. All the disk
    makers have big plants here. As a result, the component industry also
    sprang up to support the market. Thus there are major cost savings to
    be had for mfg disks in this region (Penang is only 800km from
    Singapore by air). Not to mention the possible tax and other goodies
    that may be granted by the Malaysian government.
    
    BTW, salaries in Penang will be rock-bottom compared to Germany (it's
    rock-bottom even when compared to Singapore, many disk mfg plants are
    in fact being moved from Singapore to Penang and other Malaysian
    cities). Other hidden costs such as medical and other benefits are also
    much much lower.
    
    It makes every sense to move to Penang. It's inevitable as more
    countries industrialises. What must be done is to change and upgrade,
    and do something else that Penang cannot do yet. This is not only
    happening in Germany, it's happening even here in Singapore. I just
    wished DEC could have found some other uses for KBO.
    
    

May be that the decision to close KBO had could be made this or next year, but
not the last! CXO istn't able to fulfill the demand and the site in singapur
is not able to produce disk drives SO FAR.

So to close an importent disk manufauring site in such a tough situation for DEC
was mismanagement�! 
(for non mathematician: mismanagement * mismanagement * mismanagement)


So my very personal wish list today is:

1) get hopefully still my financial package 
   (one year later it wouldn't be so high, so I see the advantage)
2) fire the managers responsible for that decision to that date!
3) a healthy DEC in the near future for the remaining people (excluding some
   mentioned managers) and obviously for my stock shares :^) 


Bernhard

                     <<< Note 2885.60 by KBOMFG::KUISLE >>>

>So to close an importent disk manufauring site in such a tough situation


	Was KBO tooled to produce the 3.5" drives? If not, would it have
	made sense to tool up and then build the Penang facility as well?

Jim

KBO was 100% prepared to start 3�" production in the midle of JULY 1993!
(Engineering, man power, room, vendors, logistics etc.)

Then, the start date was delayed for 4 weeks; then it has been canceled!

Bernhard

                     <<< Note 2885.62 by KBOMFG::KUISLE >>>

>KBO was 100% prepared to start 3�" production in the midle of JULY 1993!
>(Engineering, man power, room, vendors, logistics etc.)

	I was thinking more in terms of capital tooling and the investment
	that would be required to switch from 5 1/4 to 3.5 " drives.

	It seems that it is possible that capacity could have been made 
	available in the short term, but that overall costs would have 
	been higher than building drives in the Far East in the long 
	term. Spending the money to convert and then only utilizing the 
	line for a short time would seem to be a poor investment of
	resources.

Jim

    	I may have misunderstood, but "100% prepared to start 3�" 
    production in the midle of JULY 1993!" means to me that tooling etc.
    *was* complete in July 1993, and all that was required was the order to
    go ahead. He didn't say "prepared to start thinking about production",
    which is the state of the Malaysia plant at the moment, almost a year
    later.

      <<< Note 2885.64 by PASTIS::MONAHAN "humanity is a trojan horse" >>>

>    	I may have misunderstood, but "100% prepared to start 3�" 
>    production in the midle of JULY 1993!" means to me that tooling etc.
>    *was* complete in July 1993

	There was a list of resources that were said to be in place, Capitol
	Tooling wasn't among them. That's why I asked.

Jim