| This is the message the SBU organizations are getting to detail
spending limits. Note the section on training.
From: NIOSS1::MENTZER "DAVE MENTZER 285-3300 SBU MFG TECH/QUAL 26-Jul-1996 0854 -0400" 26-JUL-1996 08:55:37.13
To: @MTSTAFF
CC: MENTZER
Subj: SPENDING CONTROLS FOR Q1 -- FYI
From: NIOSS1::MCCARTHY "PATRICK MCCARTHY, 285-2524, NIO/L11 26-Jul-1996 0737 -0400" 26-JUL-1996 07:37:57.08
To: @SBUMFGSTF
CC: MCCARTHY
Subj: Q1 BUDGET
From: SALEM::RPOWERS "RICH POWERS, NIO/M22, DTN: 285-2867 26-Jul-1996 0709" 26-JUL-1996 07:10:23.80
To: @STAFF
CC: @STAFF_SECS
Subj: U/A: Q1 PROFITABILITY CHALLENGE - PLEASE FORWARD TO YOUR GROUPS
From: MROA::MROA::MRGATE::"A1::BAKSTRAN.PAUL" 25-JUL-1996 17:51:03.97
To: @Distribution_List
CC:
Subj: (UA) Q1 PROFITABILITY CHALLENGE 3
From: NAME: PAUL BAKSTRAN
FUNC: SBU M&D FINANCE
TEL: 297-6343 <BAKSTRAN.PAUL@A1@MROA@MRO>
To: See Below
CC: See Below
******************************************************************
Please pass this throughout your organizations
******************************************************************
As you know one of Digital's goals is to achieve greater
market share and increased profitability.
To that end, Harry has directed that we align Q1 forecasted
spending with current revenue projections. He will be issuing
a formal statement, including targets, on this subject next week.
The Q1 Week 3 SBU M&D (including Storage, CSS, and E&RT) Q1
Forecasted P&L was $10M above anticipated levels. We need to do
everything we can to control our costs and help the SBU deliver
greater Q1 profitability.
Therefore, effective immediately, the Q4 Discretionary spending
controls (see attachment) are extended till further notice.
I will be reviewing your respective Q1 Operational forecasts with
your controllers during the week of July 29. My goal is to
explore every opportunity for cost reductions and implement action
plans to achieve our contribution.
If there are any questions to the policies in place please call my
office.
Regards,
Paul
/cc
SBU M&D DISCRETIONARY SPENDING
Additional to the May 21st memo
SUPPLIES
No printing of catalogues, courses, booklets, etc.
Miscellaneous procurement vouchers to purchase supplies are
not permitted.
TRAVEL
Travel related to Q1 Revenue, New Product Release, Colorado to
NIO transfer, as outlined in the approved proposal, is
exempted.
All travel, domestic and international, will require Paul
Bakstran and Chuck Goslee's approval.
For Approved Travel:
* The approved SBU M&D Travel approval process must be
used - no travel should be booked before the trip is
fully approved.
* There will be no employee expense exceptions -
please be sure you read the Corporate Travel
policies before you travel.
- When not using lowest fares on airlines,
hotel, cars and meals, employees will pay
the difference.
* No shows at hotels will be the responsibility of the
traveler and will not be paid by Digital.
* Advances will be strictly adhered to: $25/day - $200
maximum for domestic and $50/day - $400 maximum for
international.
TELEPHONES
Company calling cards must be used.
Cancel all cellular phones and beepers except Field Sales and
Service Personnel.
PURCHASE ORDERS
All purchases order must be approved by myself and Chuck
Goslee. This includes all purchases placed on the IPA
system.
TRAINING
All training will stop, except for existing degree programs,
training for revenue - related contractual alliances, fully
paid training. Internal training is permitted.
Page 2
SBU M&D Discretionary Spending
CAPITAL SPENDING
Freeze all non-revenue capital spending. All exceptions will
require Paul Bakstran and Chuck Goslee's approval.
HIRING
All new requisitions require Paul Bakstran, Chuck Goslee and
Bob Farrell's approval.
External hiring requires an exception from Ed Cotter and
Marian O'Leary.
Shut down all executive search and recruiters.
Except for service delivery and manufacturing direct labor,
all non-revenue, non-SAP and non-billable related temporary
labor contracts will be canceled. All exceptions, including
SAP, require Paul Bakstran and Chuck Goslee's approval.
PROMOTIONS/RECOGNITIONS:
Stop production of all promotional items
No gifts (external or to internal staffs)
No recognition awards unless pre-approved or already approved
and running
No limos
No dues or memberships
Message-id: E200ZWHVERMMS
From: NAME: CHARLES GOSLEE
FUNC: VP, SBU M&D
TEL: 297-5626 <GOSLEE.CHARLES@A1@MROA@MRO>
Subject: FWD: I: Q4 Cost Containment 3
Date: 22-May-1996
Posted-date: 23-May-1996
Precedence: 1
To: See Below
TO: SENIOR SBU M&D STAFF:
DIGITAL CONFIDENTIAL
The attached is for DIGITAL INTERNAL USE ONLY!
Please note this fact to your staffs.
Regards,
Chuck
/attachment
Message-id: E251ZWHUFB3GR
From: NAME: Harry Copperman
FUNC: Systems Business Unit
TEL: 297-7560 <COPPERMAN.HARRY@A1@MROA@MRO>
Subject: I: Q4 Cost Containment 3
Date: 22-May-1996
Posted-date: 22-May-1996
Precedence: 1
To: See Below
DIGITAL COMPANY CONFIDENTIAL
Attached is a memo from Bob Palmer describing an aggressive plan to
dramatically reduce discretionary spending in Q4. I'd like to under-
score the critical nature of this move and outline the specific actions
for you and your organizations.
Digital's competitive spending model remains well behind many of the
industry's leaders. We are feeling increased pressure to become more
efficient in taking our products and services to market.
To this end, I ask for your vigilance in examining every discretionary
expenditure. Question every proposal: Is it essential to the SBU?
How does it serve the customer or partner? Can it be deferred or
avoided? In short, I ask that you manage the business as your own.
Specifically, the management team has unanimously agreed to implement
the following actions company-wide:
* Office Supply Expenses - There will be no further purchases in
Q4. In fact, for all intents and purposes the U.S. ordering
system will be closed; Asia Pacific and Europe are expected to
implement comparable actions at a country level.
* Management Consulting - All non-revenue-generating, non-SAP,
non-billable management consulting will be cancelled. All
exceptions, including SAP, require approval from the business
unit or function vice president.
* Temporary Labor - Except for service delivery and manufacturing
direct labor, all non-revenue, non-SAP, and non-billable
related temporary labor contracts will be cancelled. All
exceptions, including SAP, require approval from the business
or function vice president.
Q4 Cost Containment page 2
DIGITAL COMPANY CONFIDENTIAL
____________________________________________________________________________
* Training - All training will stop, except for existing degree
programs, training for revenue-related contractual alliances,
and fully paid training.
* Travel - All travel will be suspended unless it relates to
generating Q4 revenue or service delivery. Travel will be
limited to sales and service job codes. Exceptions require
approval of the business unit VP.
* Software Purchases - Acquisition will stop all Break The Seal
(BTS) purchases for internal use. All exceptions, including
those for SAP implementation and contractual alliance agree-
ments, require approval from the division VP.
* Relocation - Defer all relocation wherever possible.
* Telecommunications - Reduce short-term telecommunications
spending.
* Advertising - All non-committed advertising not tied directly
to generating Q4 revenue will be stopped.
* Capital Equipment - Freeze all non-revenue capital spending.
* Property/Facility Moves - Stop all facility moves except those
related to building closures.
Some of these measures may seem trivial, but small steps taken across
the company can result in significant savings. Everyone in the SBU
must be actively engaged in continuously strengthening Digital's
competiveness.
Thank you for your support and cooperation, as we bring Q4 to a
successful close.
:mml
Attachment
I N T E R O F F I C E M E M O R A N D U M
Date: 17-May-1996
From: Bob Palmer @MSO
PALMER.BOB
Dept: CHAIRMAN, PRESIDENT & CEO
To: Digital Senior Managers
Subject: Communication Plan for Q4 Cost Cuts
When I talked to the management team about Q3 earnings last month, I
discussed the importance of focusing increased attention on managing
our costs. The fact is that our top competitors remain more efficient.
This means we are at a competitive disadvantage when it comes to
delivering products and services to our customers at an attractive
price. We will not achieve greater market share and leadership levels
of profitability if we do not have competitive costs.
What is required is a short-term series of actions to deal with an
unacceptable increase in discretionary spending in the current quarter,
and a long term change in attitude. We must look at every item of
discretionary spending and ask: Is it really necessary? Does it help
us better serve our customers or partners? Can it be postponed or
eliminated?
As a management team, we need to be more involved in the detail of how
every dollar is spent. I expect you to show personal leadership and to
set an example for our employees by addressing these issues in your own
area.
This is not a one-time exercise. It represents prudent, ongoing
management of our assets, and it is in line with the targets we set for
ourselves at the beginning of the fiscal year. Even though we have
achieved six consecutive quarters of profitability, we have not
achieved profit comparable to the industry leaders, and we must
continue to look for efficiencies in our operations.
Of course, competitive costs alone will not make us successful. In the
long run, our success will depend on a clear focus on growing our
business through a relentless commitment to satisfying our customers
and partners. That is the real test for us as managers and for our
business.
It is also important to remember that we have significant strengths as
a company, including a growing portfolio of industry leading products
and services, loyal customers and dedicated, talented employees. Our
goal for Q4 is to have a strong finish in this year of improving
profitability and growth, and to establish a solid foundation for the
year ahead.
Please feel free to share this information as appropriate with the
people in your organization.
Regards,
Bob
DIGITAL COMPANY CONFIDENTIAL Document
To Distribution List:
NAME: MARY ALLARD <ALLARD.MARY@A1@MROA@MRO>,
NAME: Remote Addressee <Ray Bedard@MRO>,
NAME: Remote Addressee <BOBBY CHOONAVALA@ZPO>,
NAME: Harry Copperman <COPPERMAN.HARRY@A1@MROA@MRO>,
NAME: Remote Addressee <Ed Cotter@MRO>,
NAME: MIKE GALLUP <GALLUP.MIKE@A1@MROA@MRO>,
NAME: CHARLES GOSLEE <GOSLEE.CHARLES@A1@MROA@MRO>,
NAME: Remote Addressee <LIPCON@THUNDR@VAXMAIL>,
NAME: Remote Addressee <MAHENDRA@PATEL@VMSMAIL>,
NAME: DEBORAH MILLER <MILLER.DEBORAH@A1@MROA@MRO>,
NAME: Remote Addressee <William OBrien@MSO>,
NAME: MARIAN OLEARY <OLEARY.MARIAN@A1@MROA@MRO>,
NAME: Remote Addressee <KellY Oryan@MRO>,
NAME: Remote Addressee <RENNICK@SUBSYS@VMSmail>,
NAME: Tom Vacchiano @MRO <VACCHIANO.TOM@A1@MROA@MRO>,
NAME: Remote Addressee <Theo Wegbrans@GEO>
To Distribution List:
_salem::rpowers@A1@MROA@MRO,
_mroa::stcyr@A1@MROA@MRO,
PAUL BAKSTRAN@MRO,
Bryan Cook@MRO,
Bob Farrell@MRO,
LES GOLDMAN@ZPO,
CHARLES GOSLEE@MRO,
Charles Loarridge@AYO,
EUGENE MCCABE@PKO,
Jim Melvin@MRO,
ANDREA NICKEL@MRO,
Chuck Palmeter@MRO
To Distribution List:
NAME: PAUL BAKSTRAN <BAKSTRAN.PAUL@A1@MROA@MRO>,
NAME: BRYAN COOK <COOK.BRYAN@A1@MROA@MRO>,
NAME: Bob Farrell <FARRELL.BOB@A1@MROA@MRO>,
LES GOLDMAN@ZPO,
NAME: CHARLES GOSLEE <GOSLEE.CHARLES@A1@MROA@MRO>,
CHARLES LOARRIDGE@AYO,
MCCABE@ASABET@VMSMAIL,
MELVIN@USCTR1@VMSMAIL,
NICKEL@RELYON@VMSMAIL,
NAME: Chuck Palmeter <PALMETER.CHUCK@A1@MROA@MRO>,
RPOWERS@SALEM@VMSMAIL,
STCYR@MROA@VMSMAIL
CC Distribution List:
PAGLIA@MROA@VMSMAIL,
NAME: Nancy Cintolo <CINTOLO.NANCY@A1@MROA@MRO>,
NAME: ANN PAK <PAK.ANN@A1@MROA@MRO>,
NAME: DONNA SHEPARD <SHEPARD.DONNA@A1@MROA@MRO>,
DAVID GOULD@MRO,
NAME: Mary Broganer @MRO <BROGANER.MARY@A1@MROA@MRO>,
PHILIP CHUA@ZPO,
NAME: PHIL KUEHNE <KUEHNE.PHIL@A1@MROA@MRO>,
NAME: BRUCE LAMBERT <LAMBERT.BRUCE@A1@MROA@MRO>,
ALASDAIR MACDONALD@AYO,
MONTGOMERY@USCTR1@VMSMAIL,
NAME: Dana Noftle <NOFTLE.DANA@A1@MROA@MRO>,
FRANK RAMEAKA@NIO,
NAME: MATT SEPE <SEPE.MATT@A1@MROA@MRO>,
TJONES@ICS@VMSMAIL,
NAME: NANCY AREANO <AREANO.NANCY@A1@MROA@MRO>,
BONAZZOLI@RELYON@VMSMAIL,
BONINA@USCTR1@VMSMAIL,
BOUDROT@MROA@VMSMAIL,
MARILYN CLARK@AYO,
NAME: SHIRLEY COTE <COTE.SHIRLEY@A1@MROA@MRO>,
NAME: CARLENE COVINO <COVINO.CARLENE@A1@MROA@MRO>,
HAUGE@ICS@VMSMAIL,
JENNY NGO@ZPO,
ROE@USCTR1@VMSMAIL,
NAME: Linda Rydberg <RYDBERG.LINDA@A1@MROA@MRO>,
STJOHN@SALEM@VMSMAIL,
NAME: Theresa Calcagni <CALCAGNI.THERESA@A1@MROA@MRO>,
ANN CHAPPELL@AYO,
NAME: CARLENE COVINO <COVINO.CARLENE@A1@MROA@MRO>,
KAY@MROA@VMSMAIL,
MONTPLAISIR@SALEM@VMSMAIL,
WEST@USCTR1@VMSMAIL
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