Conference 7.286::digital

    .0
    
    I'd like to know also...it's make our job as CSC's in the LSSN
    extremely difficult on the best of days.  Apparently we can sell it,
    but we can't build it or delivery it on time.

    .0
    
    Seems to be a world wide "phenomen"!!!
    
    Our sales people here in CEGY complain about having open orders for the
    amount of several MILLIONS DeutschMarks, due to insufficient production
    or delivery capacity. The training center had to cancel OSF/1 and OSF/1
    related classes, because the AXP's to be delivered on 17-FEB were
    postponed to "probably some time in September...".
    
    My 2 Pfennigs
    
    Felix
    

    Let's see now. A company cuts manufacturing staffing and space for
    something like 4 years. Then they improve their marketing, products,
    and threaten sales with losing lots of income if they don't sell more.
    Then they find themselves in a situation where they can't build 
    product as fast as they are selling it. Who would have thought such
    a thing would happen?

    			Alfred

    Those of us who talk with customers know that the supply chain has
    been broken for a while now, and as we work our butts off getting
    customers to buy from us, we're stretching out lead times.  Look at
    the product lead time chart in the recent Digital Today.  The answer
    is YES to all your points for consideration as problem areas.  I'm
    not in sales, but certainly understand what the customer's are now
    saying.
    
    Mark
    

    I've been told the hold up is due to a disk drive shortage.

    The Stage 1 manufacturing for workstation products started transfering
    to Chihuahua more than a year ago. The last of the products were
    transfered in Q1 of '94. It has been an uphill battle getting the
    all of the equipment setup and installed in Chihuahua. The plant was
    also expanded in order to meet the capacity needed to manufacture the
    volumes that are presently needed in the field. Volumes at present are
    ramping up and I suspect lead times will diminish somewhat as the
    process is tuned. The plant is state-of-the-art as far as equipment is
    concerned. There are some people issues that are being resolved and
    soon all should be well. 
    
    I quite sure that it is frustrating being asked to sell but having to
    wait to recieve your order. Hopefully things will improve and the lead
    times that are presently being seen will become shorter.
    
    JM

    Add to the frustration of the customers is the frustration felt by the
    sales reps who don't get paid until an order ships and you know how not
    only customers calling us CSC's in the LSSN for ship status but sales
    wanting the exact info so they can make their next mortgage payment.

    The problem is that our efforts around the "Supply Chain" or "Customer
    Value Chain" have been failures. Adriana Stadecker brought many new
    ideas and concepts to the battle, but those concepts have not worked.
    We will have to regroup and take a new direction.
    
    	The administrative systems and procedures must be rethought and
    redone!

    
    
    Digital is buying a new package R3/SAP to replace the current order 
    management system. It's client server and presents a standardized
    platform so unlike our current systems. But!!!! You can have the newest 
    whizbang package but with no product to ship and constant recommits 
    you have not gained anything. Well let me say you gain somethings 
    but the basic problem is still there. 

    
    I wondered how long it would take before somebody finally entered a
    note on the mfg and delivery issues.
    
    We just now shipped my customer his nine Decstations, they were a month
    late due to module shortages. Since I am at the customer's site,
    everyday they asked, "when will they ship?". I can't believe the
    patience they have shown. When I order things and they are that late
    ie: car parts, I usually cancel and go somewhere else. And I know
    there are alternate vendors lined up for the business.
    
    Yes, but this is just one of quite a few orders behind schedule and
    causing my acct major frustrations. Most of my slips are due to
    the vendors we deal with not providing Digital with parts. But
    I suppose it's a combination of many things.
    
    If we can't ship, I don't see how we will ever make the numbers
    required to make a profit for a change. It's that simple.
    
    

    
    Well, I hope that 'not meeting demand' is good news opposed to the
    alternative!

     Being the skeptic, I just wonder if the deliveries are being "managed"
    from one quarter to another to make our balance sheets appear more
    favorable to Wall street.

    I happened to follow up on a particular order on behalf of one of the 
    sales account manager. After talking to several people ( like Solutions
    desk etc etc ), I was finally able to talk to the person in MRO3 who is
    supposed to be doing the allocations etc. He indicated to me that they
    are having problems with power supply, memory boards etc etc. Some how
    no one seems to understand that our customers are not listening to the
    excuses or our problems. When the order the equipment, they want it now 
    or they will go to the competition !!   
    
    
    

    Probably not all that applicable here but....
    
    
    My customer was waiting for months for 18 disk drives (1 GByte RZ26s). 
    When they arrived, all 18 boxes indicated rz26s, packing order was for 18
    rz26s, and bill was for 18 rz26s.  However, 6 ( a full 33%) were actually 
    2 GByte rz28s.  The kicker is that the customer is staying with ULTRIX 4.3 
    where rz28s are not useable!!!!
    
    Just figured I'd let you know 8^)......
    
    
    Jack               

    We're hiring 800 people in the Colorado Springs & opening new
    plant in Malaysia for disks.
    
    We're adding 200-300 salesfolk in US.
    
    Did anyone have a clue when all these neccessary "downsizing"
    moves were made?
    
    I don't think so.

It's possible we're being a bit hard on ourselves here.
There's a world wide shortage of many components used in PCs
due to the tremendous growth in demand.  The problem isn't just
manufacturing, it's global competition, forecasting and getting parts.
I know for video terminals we're looking at long lead times for dozens of
key components.  As prices and margins continue to fall, the whole
industry has struggled to reduce costs and become more globally competitive,
"excess" capacity has been systematically eliminated resulting in greater
volatility.

Few people really understand where the global economic system we
have created is leading us.  I sure don't.  But I do recognize these
are systemic problems.  We need a revolution in long term whole thinking.

- Peter

    I hear you, try telling that to our customers, by looking at the
    finanical results of the competition, some people are shipping what
    the customers want to buy. We need to stop cutting just to cut.
    
    We need to re-engineer this place for survival reasons. Most of
    these efforts so far are bandaids.

    
    The biggest problem for DEC will be to build a quality supply chain in
    the money our systems bring in.  We're moving to a low margin product
    line across the board, so selling $6B in hardware only brings in a
    fraction of the NOR $$$ as before.  
    
    Tough problem.

				....imagine ...




the thoughts of people, reading all the last replies, sitting around and waiting
for the plant close?


It's unbelievable and frustrating, we (KBO) could have been able to produce 
your urgent needed equipment for the last half year !!!

    Re .14
    
    Jack, what are the implications of this for the short term re your
    client? Perhaps we can take this offline, as I have a vested interest
    in both the ST and the LT.
    
    Steve

Because certain parts of the Coporation are now self managing in terms of 
profit and loss, who ensures that the storage business for instance doesn't 
sell all it's disks externally to make it's figures look better at the 
expense of other business units. I've ordered an Alpha system and the delivery
has been delayed due to a shortage of disks yet every PC magazine I look at has
companies selling Digital disks. Surely somebody up there must realise we'll
make a lot more money selling that disk inside a system than selling the disk
on to some re-seller. 

Callum z

    	Buy your Alpha diskless, and then buy the disks via the PC
    magazine. It is probably less expensive that way. People often find it
    is less expensive to buy a DEC PC through their local shop rather than
    the employee purchase plan, and you get it faster.

    The Firmware in DSP series disks is different to that in our otherwise
    similar RZ series disks.  Worth checking out.
    
    				Malcolm.         

>Note 2945.21                      Manufacturing                         21 of 23
>MASALA::CMACDONALD "Callum MacDonald 789-8149 (SQF)" 12 lines  21-MAR-1994 08:32
>                           -< Who decides this..... >-
--------------------------------------------------------------------------------
>Because certain parts of the Coporation are now self managing in terms of 
>profit and loss, who ensures that the storage business for instance doesn't 
>sell all it's disks externally to make it's figures look better at the 
>expense of other business units. 

    They ship to the people with binding contracts first... That would
    be all the external folks...   Smart from the storage point of view,
    dumb from a digital point of view.
    
    

  
    Re -.1
    >They ship to the people with binding contracts first... That would
    >be all the external folks...   Smart from the storage point of view,
    >dumb from a digital point of view.
    
    i think selling hardware in a future of open computing depends on being 
    successful selling piece parts to an open market. 
    For storage that means their success or failure depends on the external 
    market. Digital system business should treat storage as an external 
    supplier, do'nt like them do'nt buy..fair is fair.
    
    Maged           

    
    RE: .-1
    
    I agree... At the current time we're not set up to use commodity
    drives from the open market.  I'm sure things will go that direction
    in the near future.
    

    re:  last few
    
    To get competitive in storage, we must build volume.  This is what
    always killed us in the past.  We must sell to third-parties, and they
    must see us as a reliable supplier.  So, at the very least, if we must
    allocate product then they get the same share as the internal Digital
    organization.
    
    When Gullotti was here in January, before he was kicked upstairs,
    someone asked him about long lead times.  He quoted the plant
    consolidations, reorganizations, etc., and someone complained about
    poor planning.  He responded that he knew a lot of dumb decisions were
    made, becaue he made them.  He then added that he had no choice.  It
    was so late in our problem cycle that we had no choice.  We had to
    amputate some parts so the rest of the organism could live.
    
    I have heard that we are moving towards the idea that we could buy
    industry-standard disks outside to fill short term demands.

    I understand we're already buying disks from other manufactures to meet
    demand - supposedly one of the RZ26 variants is made by HP - which
    explains why you can have problems trying to shadow or stripe between
    different variants - they have different geometries.....

    If there is a B after the drive number it is a non-DEC drive.  For
    example RZ26B ... an HP drive if I'm not mistaken.  Same size as RZ26,
    but different geometries so shadowing an RZ26 with the RZ26B was
    verboten!

>
>    but different geometries so shadowing an RZ26 with the RZ26B was
>    verboten!

	This really does not belong in this conference, but incabability
	to shadow RZ26 and RZ26B/L/Whatever is a VMS deficiency.

	UNIX and NT don't have this problem.

    
    	I've just been told that the "B" stands for "Bought-in"  which is
    not necessarily from HP.
    
    				Malcolm.

    JIT is NOT JIT...that one reason for the f&d problems and long lead
    times.

              <<< Note 2945.24 by DIODE::CROWELL "Jon Crowell" >>>
                                -< No one.... >-

>    They ship to the people with binding contracts first... That would
>    be all the external folks...   Smart from the storage point of view,
>    dumb from a digital point of view.
    

    The above statement is not correct - as far as the Subsystem OEM
    Group is concerned. EVERYONE is feeling the pain. 
    
    One problem we (Storage) have in trying to sell storage products
    externally is that customers have believed we give preference
    to our internal needs firstl. 
    
	Gim Hom
    	Storage Subsystems OEM     
    

    This is my very personal view of the problem and I may not understand
    the 'total problem'.
    
    We decided in the late 80's that we had too many mfg. facilities,
    therefore we decided to cut.   However in my personal opinion when we
    cut the last three (Puerto Rico, Ireland and Hong Kong) we blew it !.
    
    In the meantime, DEC was changing from a high revenue, low volume, high
    mix manufacturer to a low revenue, high volume, medium mix
    manufacturer.    The main revenue was changing from VAX to Alpha,
    however this change was not occuring at the rate it was forecasted (to
    make things worst).   The company started depending more and more on
    PC's and Hard Drives.   With the closing of the Kaufbeuren
    Manufacturing site we severly impacted the availability of our
    hard-drive capacity (now we are opening another plant in Malasia).
    
    Now you may ask if our volumes are going up (we are close to shipping
    1 million PC's) how come we are STILL in the red.   Simple, the revenue
    in PC's and Disk Drives is less than 1% in some extreme cases,
    therefore to make a profit you need to sell multimillon amount of
    units.    It is simple then to comprehend that you need the capacity
    (specially in the sub-assembly or Stage I)to manufacture the volumes.
    
    So here we are, we do not have the capacity (BTW: we are subcontracting
    work outside because we can not handle the load, all Stage I facilities
    are working 7 days, 24 hours you can not do more than that !!!!).
    
    I don't like to sound like "I told you so" but I did publish an article
    in this same notesfile about 5 years ago that discusses exactly what
    is going on.   I remember that the example I used at the time was that
    of GM's Saturn car where they had the customers but they did not had
    the capacity to manufacture the required volumes therefore loosing
    customers...........'History repeats itself' Niccolo Machiavelly.

    
    Do not worry, the entire backlog of orders is going to ship on 
    April First. There will be no more backlog. At least that's what
    my recommit dates are showing.
    
    Now about that date...what is it about that date.
    
     Dave
    

>       <<< Note 2945.32 by GUCCI::RWARRENFELTZ "Shine like a Beacon!" >>>

>    JIT is NOT JIT...that one reason for the f&d problems and long lead
>    times.
  Please explain this further. I was working in a mfg group when JIT went into
effect in Digital and the whole idea scared me, one reason being the situation
discussed in this topic: that if there was a sudden surge in demand for one or
more of our products, we would not have any inventory of parts to draw on and
would be entirely dependent on our suppliers' inventory to keep going. Would
the current shortage of Alpha systems etc. be less severe if we had not imple-
mented JIT?

JIT stands for Jammed In Trucks.
So where are the trucks?

Re:                 <<< Note 2945.34 by ELMAGO::JMORALES >>>

>						Simple, the revenue
>    in PC's and Disk Drives is less than 1% in some extreme cases,
>    therefore to make a profit you need to sell multimillon amount of
>    units.    

I think there's some confusion in terminology here.  Are you trying to say that
the *profit margin* is less than 1% ?  If revenue was less than 1% then we'd be
in *much* worse shape...  :-) 

-  David

    Re: 2945.38
    
    		Not on all the systems.   This is mainly on 'entry level'
    systems such as the entry level PC's and some smaller hard drives
    where our main competition is the mail order companies.

    Working in a manufacturing plant myself maybe I can give you a clearer
    picture of what happens on our end because we always wonder why the
    orders always come in during the last two weeks of the quarter?????
    If you were to look at a quarter it would look something like this:
    Week 1; system is down for the first couple days due to closing out
    previous quarter. Work is slow due to all the pull in activity. Weeks
    2-8 remain slow to moderate due to the pull in activity plus shortages.
    Weeks 9-11 work is picking up but shortages continue. Weeks 12 and 13
    are b@lls to the walls, overtime galore and expected to satisfy our
    customers. Pull in activity starts again, 60-80 hrs weeks are common
    but shortages remain the problem. As a matter of fact here we are in
    Week 13 of Q3 and I have a dozen work orders of my own that have
    shortages. Like I said those are mine, that isn't counting the other
    work orders on the floor the other techs have....but we'll be expected
    to be in here Saturday til the last order goes off the floor....
    
    So, if you ask me it isn't a case of Digital closing too many
    manufacturing sites. In my opinion the answer is in the scheduling
    of orders and the ordering of parts. SHORTAGE is a common word in
    our manufacturing sites and it SHOULDN'T even be in the vocabulary!
    This is the second manufacturing site I have been in and both of
    seem to fight the same battle of shortages.
    
    Hope this helps.
    
    Gordi
    Hope this helps.

    JIT:
    
    The whole concept of JIT is not to have a large costly inventory but to
    be able to get needed supplies to satisfy demand "JUST IN TIME"!  Just
    in time for what, the customer to be pissed off from an order slipping
    a half dozen times, not meeting stated lead times, etc.????????
    
    It apparent that 'somewhere' there is a problem with the management of
    our manufacturing capabilities, systems, etc.  I can understand why
    Gordi feels the way he said in .40, but the fact remains that any order
    I've certed in the past nine months for ANY Alpha AXP system, there
    have been fulfillment and delivery problems.  Is that the fault of JIT
    itself or the management of JIT?
    
    Put yourself in the position of the Digital employee that has to come
    face to face with the customer who asks about status on their order and
    we CONSTANTLY say "we have material shortgage problems."  It gets very
    old FAST!
    
    Ron 

In my opinion JIT is based on the fallacy that while we can't afford to stock items locally
our suppliers can. In other words, we expect them to maintain a large inventory just
waiting for us to order.

SO if you add in single source long lead time parts, no local inventory, no inventory at
the supplier (who is also been sold on JIT), supply problems on the part of the supplier
you get a lack of delivery performance on our part since we're always waiting for that
magic part(s).

Gordi's observations about what life is like in manufacturing is right on the money. The
end of every quarter is a zoo, with manditory overtime etc. for the manufacturing folks
who build the products. 60-80 hours a week is about right. Then the next few weeks are 
sloooow.

The scheduling issue was beat up in another note, but from a manufacturing point of view
the lack of a creadable schedule is a major problem, the other is availability of raw
materials.

dave

    re .40:  -< Not a Capacity problem! >-
    
    Wow. Back in the early Eighties, I started out at Digital as a
    Manufacturing Engineer II in Westfield. I well remember the last week
    of each quarter, out on the line with my two Technicians, "making the
    quarter".. be it fixing TIMsets for PDT11/1x0's, adjusting the video on
    an endless stream of VT100's, or whatever... We'd never count on the
    last week of the quarter to do the work we were "supposed" to be doing,
    because we knew everybody from engineering would be busy pushing boxes
    off the loading dock.
    
    Sounds like not much has changed in 14 years..
    
    ...tom
    
    

    Every major company sees orders pour in at the end of the quarter.
    It's always been that way and probably always will. A reasonable
    management team would plan for it.
    
    			Alfred

One would think that the cost of carrying inventory for 6-8 weeks would
be a lot less than paying the entire manufacturing crew 30-40 hours ot
for a week or two each quarter.

.41 writes:
    Put yourself in the position of the Digital employee that has to come
    face to face with the customer who asks about status on their order and
    we CONSTANTLY say "we have material shortgage problems."  It gets very
    old FAST!
    

Now put yourself into the position of the Customer employee, who pushed 
Digital over HP, Sun & IBM with his/her management and is about loosing 
his/her job because he/she recommended Digital.

Now that is DEPRESSING!

Joerg

    Hear Hear !!

    
    Re: the string.
    
    I know this is a problem, but DAMN it's nice to hear something
    like this spoken of again. For too many years, we've had, uh,
    other subjects to talk about in here that had nothing to do
    with demand fulfillment.
    
    Glenn

        So much to say, so little time. Sorry for the long reply,
    	and it's only a fraction of what needs to be said.
     The + sign is mine, all other quotes are xfr'd near as possible 
    to the origional , if not the origional.
    
    Can someone please tell me what is the problem with Digital
    Manufacturing?     
    Are we having:                                          
    	A. Capacity Problems?
		+Yes. There is one thing about Manufacturing....we
		+can't make more time. When you get behind the
		+schedule, you must add more time.
    	B. Supply Problems?  
		+Yes.Parts is parts, but we in manufacturing can't
		+substitute apples for oranges. It's gotta be what
		+we need , when we need it, and this ain't Burger King.
    	C. Quality Problems?                   
		+Yes.The usual introduction of a "new" system that our
		+customers keep reminding us to fix. Of course that's
		+IF it was put together right in the first place.
    	D. Forecast Problems?
		+Yes.Who's forecast do you wanna believe ? I haven't seen
		+one lately(last 11 years) I'd commit to.
    	E. Laid off too many manufacturing people?
		-No,not yet, just the wrong ones.
    	F. Closed too many plants?
	 A	+Yes. At least 1/2 of one anyway. ABO/AMO merged ,
	 L	+for those unfamilar with these Site codes, the
	 P	+Manufacturing site in Albuquerque,New Mexico-(ABO)
	 H	+and the manufacturing site in Chihuaha, Mexico.(MEO?)
         A
    
    I am being told that this has management attention but I would like to
    know why we have the problem.
    

    JIT:
    
    The whole concept of JIT is not to have a large costly inventory but to
    be able to get needed supplies to satisfy demand "JUST IN TIME"!  Just
    in time for what, the customer to be pissed off from an order slipping
    a half dozen times, not meeting stated lead times, etc.????????
    
    It's apparent that 'somewhere' there is a problem with the management of
    our manufacturing capabilities, systems, etc.
    
    Ron 

    re .40:  -< Not a Capacity problem! >-
    
    Wow. Back in the early Eighties, I started out at Digital as a
    Manufacturing Engineer II in Westfield. I well remember the last week
    of each quarter, out on the line with my two Technicians, "making the
    quarter".. be it fixing TIMsets for PDT11/1x0's, adjusting the video on
    an endless stream of VT100's, or whatever... We'd never count on the
    last week of the quarter to do the work we were "supposed" to be doing,
    because we knew everybody from engineering would be busy pushing boxes
    off the loading dock.
		Sounds like not much's changed in 14 years..

		...tom
    
		++ This is the reason why.......a reasonable 
	+Management team would have seen it coming and "Level Loaded"
    	+each of the Weeks/Months of the Quarter/Year for a sustained
	+production at or near capacity. If the "numbers"were not 
	+near the capacity level,the production line would downsize.
	+If the numbers increase instead of decrease in a quarter/year,
	+after the production line was reduced,you got problems.

    Every major company sees orders pour in at the end of the quarter.
    It's always been that way and probably always will. A reasonable
    management team would plan for it.
    
    			Alfred
One would think that the cost of carrying inventory for 6-8 weeks would
be a lot less than paying the entire manufacturing crew 30-40 hours ot
for a week or two each quarter.

Joerg
    
		+Actually , the cost to Manufacturing is not so much for
		+the added hours. For example, in our facility in 
		+Albuquerque, there are only about 150 in Manufacturing.
		+The rest of the 600 or so probably won't be here for 
		+the overtime this Sat.and Sun.(yeah , we know it's 
		+Easter Sunday too.)
	
		This is the attention Management here in AMO is giving the
	supply chain issues.....care to find out more ??


From:	NAME: MRPII @ABO                    
	FUNC: MRPII                           
	TEL:                                  <MRPII AT ELMAGOA1@CIBOLA@ABO>
Date:	19-Jan-1994
Posted-date: 19-Jan-1994
Precedence: 1
Subject: MRP II Newsletter #1                                                   1
To:     See Below


                                  AMO MRP II
     
                             A CONTINUING JOURNEY

    What is MRP II?

    Manufacturing Resource Planning or MRP II is a fully integrated planning
    and control system.  Fully integrated means that the business plan
    incorporates the plans of marketing, finance and production.  The 
    production plan is integrated with these plans and forms the basis for
    all departments in the manufacturing process to work within.  Marketing
    agrees that its plans are realistic and attainable.  Finance agrees
    that the plans are desirable from a financial viewpoint, and production
    agrees that it can meet the agreed-upon demand.  The manufacturing
    planning and control system, as described here, forms a master game plan
    for all departments in the AMO organization.    

    What does this mean to AMO and our work?
     
    January 3rd 1994 marked the revitalization of our journey toward achieving 
    MRP II Class "A" performance.  The program has been established by Pat
    McCarthy and a full time program team has been put in place.

    The purpose of this communication is to familiarize all Albuquerque and
    Chihuahua employees on the scope of the work, the team, and how this 
    program will impact you.  We will communicate to you on a monthly basis 
    via electronic mail and newsletters that will be placed at the plant 
    entrances.  These newsletters will be translated in English and Spanish, 
    and communicated throughout the AMO organization.  In addition, we will
    be holding regularly scheduled video conferences.

    The MRP II Team reviewed the six categories of excellence required to 
    achieve Class "A" performance. These six areas are:
    
         1. AMO Education & Training program:
              
              AMO MRP II Business Processes & Metrics
              AMO MRP II Systems Processes
              American Production & Inventory Control Society (APICS)
                Certification Program Offerings

    	 2. Top Management Planning:
    
    	      Sales Plan
    	      Business Plan
    	      Production Plan
    
    	 3. Operations Management Planning:
    
    	      Master Production Schedule
    	      Material Requirements Planning
    	      Capacity Planning
    
    	 4. Database Accuracy:
    
    	      Bill of Materials
    	      Inventory Accuracy
    	      Routings
              Other reference databases

    	 5. Operations Management Execution: 
    
    	      Purchasing
    	      Production Activity Control
    	      Schedule Performance

         6. Systems & Tools.

              MRP II Application System and Tools.
    

    Excellence in these six categories is vital to achieving Class "A" 
    performance.
    
    
    The core team consists of:
    
    	 Muriel Norwood      Program Manager
       	 Len Apodaca	     Central Planning
    	 Pam Axtell	     Master Scheduling
    	 Rich Brown	     Information Systems Consultant
    	 Gustavo Cervantes   IM&T, Chihuahua
    	 Greg Durfee	     Engineering
    	 Jorge Hernandez     MAXcim Management
    	 Genaro Montoya	     Finance
    	 Bob Moore 	     Worldwide Fulfillment Design
    	 JoAnn Poe 	     Training
    	 Inge Potman	     Material Acquisition
    	 Jeff Wellman	     Production Control
    	      
    
    The team will be supported by a Steering Committee (subset of plant 
    staff) and functional teams (members of each department who will help 
    do much of the work.)
    	 
    The team took its first steps towards outlining the work within the 
    six categories.  Many of you may already have been contacted to 
    solicit your help in forming the work plans.  We have started our 
    education and training on the  usage of MAXcim and the fundamentals of
    operating in a closed-loop MRP II environment.  Work started on the 
    development of a formal training plan for the entity which will be
    reviewed on Friday 1/21 by the entity staff.
    
    This communication letter will be the first of many that you will 
    receive as we move towards Class "A" performance.  It is our 
    opportunity to communicate the changes and progress that we are
    making in achieving excellence in AMO.  A detail program plan has 
    been published - please contact any of the MRP II team members if 
    you would like a copy.
    
    You will be directly or indirectly impacted as a result of this program.
    We will be changing the way we do business.    

    Please join us in the journey.


                        +If you made it this far, we COULD use a 
    	hand this weekend....... I heard that deafening applause, now cut
    	it out , this is serious .......
    
    			Pablo
    
    
    

         Wholly mackeral, I didn't mean to get everyone going....oh yes
    I did! Did I forget to tell you that we are a MRP II class A site?
    Did I forget to tell you that the actual line that I work on is con-
    sidered to be JIT supplied? Well folks, while I start my 28th hour
    this week I still have shortages so I can't ship the product to your/
    our customers! I understand that it has to be tough standing face to
    face with the customer and stating it hasn't shipped yet. I emphasize
    with you but manufacturing is doing what it can to aleviate the
    problem. I have the work orders built as far as we can go and when the
    shortage comes in, we'll get it out as quickly as possible.....
    
         As far as ALPHA goes....Rumor has it that it isn't a manufacturing
    issue as much as an engineering issue. I guess we just haven't got it
    to work right yet. Read somewhere that the other companies have either
    caught us or surpassed in ALPHA technology??? Not looking real good.
    
    Take care.
    
    Gordi

ASO has been MRPII Class A certified for almost 10 years. While that's a nice
achievement it didn't fix the supply/delivery problems. We still don't have 
the parts we need to build the schedule that keeps bouncing around. But we
do work 7 X 24 here now (7 days a week/24 hours a day). If you're DL (direct 
labor) holidays aren't always days off.

A level loaded schedule? That's a great idea, we've been pushing it for years.
The problem is that if we overbuild, per the schedule, we take the inventory
"hit" when the metrics get rolled up, not the group that gave us a lousy
forecast.

dave

>             <<< Note 2945.45 by ELWOOD::LANE "Running on empty" >>>
>
>One would think that the cost of carrying inventory for 6-8 weeks would
>be a lot less than paying the entire manufacturing crew 30-40 hours ot
>for a week or two each quarter.

The financial carrying charge for a million dollars of inventory 
at a prime interest rate of 6.5% for just 6 weeks is $7500.
Somebody else will have to provide how many mfg. people it takes
to handle how many million dollars of inventory, but it looks to me 
that saving $7500 pays for about 10 full man weeks of time-and-a-half OT.
($7500 @ $20/hr (~$13 * 1�) ==> 375 hours)

- tom]

    RE: Carrying inventory v overtime

    A friend of mine once worked for the company that made Kool Aid.
    90% of their demand is in the summer. My friend did all the
    calculations and it was determined that it was less expensive
    to run 3 shift just in the summer then to run 1 shift all year
    round and warehouse the stuff. Our mileage may vary but the answers
    are not always obvious.

    			Alfred

    .52 (among others):
    
    Please don't forget to factor in the costs of things like note 2966.
    
    It's said by many that it's easier to make a customer of someone who's
    never done business with you before, than someone who has in the past
    (because they have this terrible habit of remembering the things which
    caused them to look elsewhere).
    
    I have no idea how to guesstimate the hit you take from word-of-mouth
    "advertising" by former customers.
    
    Dick

    PNO was the first MRP II Class A site in all of DEC and maintained it
    for 5 years.

    yes, but we don't need a MRP II Class A site for LA120's anymore.

    
    RE .55
    
    I worked at Shrewsbury (making Thin Film Heads for disk drives) and
    that plant was also MRPII class "A". Although they made a big deal
    about it, it was basically a joke. I felt that it was just another
    thing that they used to make us look good even though it measured all
    the wrong things. I remember they told us to make sure that the break
    room was kept clean "or we won't make class A". When I heard that I
    knew that "Class A" was just another superficial measure of how good
    you can make things APPEAR.
    
    Steve B. 

    >    yes, but we don't need a MRP II Class A site for LA120's anymore.
    
    no but we need AXP's.  They were going to build them then (were called
    Prism (Moraine) then - same 64-bit architecture/instruction set) back in 
    1989 (FRS would've been FY90 Q2) when we really would've had a major 
    advantage over the industry.  Instead they cancelled it and resurrected it 
    under AXP 2 years later.  As things are unfolding now, the extra 2 years 
    would've been very helpful in getting the entire strategy in place, in a 
    timely manner, without jeopardizing the company.
    
    Mike

    Glad to hear people talking about MRP-II (even though its yesterday's
    flavour). I've always felt JIT to be a dangerous tool when demand
    cannot be planned precisely, and where we have long leadtimes. The
    crucial issue I believe with using MRPII, is to make a foolproof and
    flexible link with the orders (forecast & actual), otherwise you'll
    always have the common situation where too many resources are expended
    satisfying backlogs.
    This often leads to the unfulfillment of the non-backlog demand, and so
    the cycle repeats itself.
    
    I therefore believe that automating the link between the Master
    Schedule and the various order sources is crucial. As a
    contractor/manfg.consultant (within Digital for the last 6 years), I
    have just developed a small Make-to-Order module for use with the
    IMPCON Manfg.system that is currently used by the ex-EIC sites
    Solent,Munich and Annecy), and utilises this link. Orders can be
    automatically scanned, and BOMs (Bills-of-Materials) automatically
    produced complete with operational routings (derived from any
    sub-assys) for the order line-items that are detected. Pre-set "Blow-thru"
    flags determine how deep through the BOM sub-assy levels, processing
    occurs to produce a single-level "jumbo" MTO BOM. Flags also determine
    whether an automatic entry on the MRP-II Master-schedule is madde for
    the MTO, or whether a work-order is automatically raised with
    allocations being made for its components.
    
    In the case of the Solent site, which does not currently use the MRP
    module as most of its products are special one-offs, this approach has
    interesting implications because the overhead of creating a one-off BOM
    structure for an order now disappears, and the benefits of MRP can be
    made available.
    
    Whichever method (or combination of) your sites use, we can make great
    improvements by formally instituting TQM(Total Quality Mgmt) applied to
    lead-times (both procurement & production). It is a classic example of
    TQM and is easily measurable as well as being easy to quantify cost
    benefits that will accrue. The absence of this level of control will
    certainly lead to the shortages and bottlenecks that cause us to offer
    our customers the service level described in earlier notes within this
    topic.
    
    Regards
    Alex Campbell (ASG-Support)
    
    It has several implications:
    
    a) Removes arguments
    

    	Back to the thread of "why can't we get enough product?"...
    
    	I happen to work in CXO.  We are FINALLY lucky enough to have
    a set of products and prices that everyone in the world seems to 
    want.  We are doubling our capacity every quarter, as well as
    adding the Malaysian facility.  Our heads suppliers are adding a
    new facility, as well as adding capacity in existing ones.
    
    	We are second, third and fourth-sourcing material in an 
    attempt to obtain enough raw material.  At the same time, we are
    adding cleanroom change-rooms (to get enough people in and out of
    the cleanrooms), electrical transformers to handle increased load,
    hiring and training temps--who get converted as we feel confident
    of both THEIR abilities and our ability to keep them without a
    layoff.  (20% wash out in first month--don't show every day, etc.)
    In some cases, we are being forced into design changes by the
    material availability for high-end product.
    
    	We are frustrating our customers, internal and external, by
    not producing enough.  We are running this factory on a 7day,24hour
    schedule, and have been for two and a half years.  We'd like to 
    get enough capacity ahead that we could back off 7x24 and have some
    slack time for upside.
    
    	All that aside, THIS IS A GOOD PROBLEM to have at this time in
    the company.  We could have products no one wants, and be figuring
    out who to TFSO.  It didn't seem realistic to staff ahead of demand,
    given the company environment.
    
    	All I can say is, we are doing everything we know how to maximize
    the availability for internal and external systems, and we hear you.
    Please hang in with us.  Thanks.

    Barbara:
    
    From your standpoint, the current problem IS a good one to have -- a
    demand so high we're working 24x7, hiring and expanding, etc...
    
    What bothers those of us in the field are the major surgeries in
    manufacturing that contributed to the whole process being
    constipated...that is having the demand but can't ship an order out of
    the door.  This component of the proper, ***PLANNING***, is a
    MANAGEMENT problem, the inability to properly plan both short and long
    term.  
    
    Meanwhile, in the field, we're trying to explain to customers what's
    happening, but the same excuse for the last 9-18 months gets pretty old
    with folks kinda fast.
    
    Thanks for your input, Barbara.
    
    Ron

and imagine ....

this company is owner of another disk manufactoring plant with a super infra-
structure (new cleanroom etc) and most of the left qualified people inside 
are sitting around, cleaning up the plant, getting still their money, waiting 
for their final package and looking for another job.

just my frustrating thoughts - Bernhard

    
        RE  .62 and KBO
    
        Recall that not too long ago we closed a well-functioning modules
        manufacturing plant with some of the best manufacturing talent in 
        the company (Galway), and subjected ourselves to the ongoing pain 
        of bringing other plants up to the necessary volume capacity.
    
        Did we learn a lesson, or are we going to see instant replay?
    
        My sympathy, Bernhard, with you and your compatriots.
    

    I heard that there are more than 8000+ people in the US logistics. Who
    knows! Perhaps this is the root cause of all logistics problems in the
    company ;-).
    

    And out of those 8000 or so, how many are senior and mid-level
    managers?  That organization should have been the first to be
    "flattened".
    
    /d.c.

    us logistics and the US Logistics Services Support Network (LSSN)are
    not one and the same organization...

    All members of the Logistics Services Support Network are part of US
    Logistics.... that includes manufacturing, and I would venture a guess
    that 8,000 people is a good #.  As a member of US Logistics, Alpharetta
    LSSC, I won't comment on .64.... Just wanted to clarify .66.
    
    Toodles.....JP