mgmt memo

 The VMS environment encompasses everything that the customer sees, sitting at his or her terminal, workstation, or operator’s console. It’s not merely the operating system. It includes networking, layered products and data management - all the way up through trans­action processing, ALL-IN-1 office products, and the CASE (Computer-Aided Software Engin­eering) environment. All the training and experience that people have with VMS systems is preserved, while the underlying hardware architecture is radically modified.

 This effort to overhaul the VMS environment with new technology is an enormous program involving engineering groups from all over the company. Because the new technology will impact the way systems are built, Manufacturing is also closely involved.

 The program extends all the way from semiconductor designs to applications solutions. Marketing, sales, and service organizations all have important roles to play. Everything that will make this successful in solving customer problems has to be brought about in parallel. This is more than just concurrent engineering. It is concurrent product and solution development.

 Thousands of people are working on different pieces of this long-range plan, that over the course of time will produce hundreds of different discrete products. They’re all working independently and creatively, and all aiming in one direction; so the pieces will fit together smoothly. The development effort is complex because we want to make the end result fantastically easy, so that customers just see straightforward, radical improve­ments in performance.

 These activities proceed in a distributed and entrepreneurial way, helped and coordinated by a small program team. Every group feels ownership for the results they are asked to produce. They have pride in their work, and the freedom and authority to get it done. Eight experienced managers serve as a program team to enable all these groups to work together as a team and efficiently achieve their goals. The purpose of the program team is to seek out and anticipate stumbling blocks and deal with them and negotiate them away before they become "show stoppers."

 In terms of complexity and timeframe, this is analogous to the program to put a man on the moon in the 1960s. Ultimately, the unrolling of this program will revamp every aspect of our VMS product stream, which has been the company’s mainstream product for an entire decade. As we move along, we must make sure that people understand the importance of achieving the intermediate goals, while holding the long-term vision.

 In general, we have to recognize that no advantage lasts forever. Today’s unique feature will become tomorrow’s baseline. Today’s "best and brightest" function will seem pale next to what customers will expect as a standardized capability in any system in the late 1990s. To stay competitive, we must constantly develop new benefits for customers.

 This means we face a double challenge. In the open-systems environment of the 1990s, the advantage accrues to the vendor who says, "Use what you would like to use, and we will make it operate as a single system." We have to make it easier for customers to work in a heterogeneous open computing environment. But at the same time, we have to create new attributes for the VMS environment so it will continue to solve customer business needs better than anyone else’s offering.

 The new open systems competition will put engineering on its mettle in a way that pre­viously it hasn’t had to face as a whole. In the mid-1980s, we flourished on the popular­ity of our VAX and VMS system products, and didn’t have to be competitive in all areas. Our terminals business, on the other hand, has faced stiff competition because standards have made it easy to substitute competitive products. As a result of that competitive pressure, our terminals are now the best in the industry. They’re manufactured at a very aggressive price, and we have a very healthy share of the terminal market. In that case, an open competitive environment has been good for Digital and good for our customers, because we met the challenge.

 It is healthy for engineering as a whole to face this kind of competition. Everybody now can be measured, and everybody has to measure up.

 How will Digital differentiate in that environment? In particular, how do we make VMS systems of unique value to customers so they will preferentially buy our solutions? We must understand and deliver the base metrics of solving customer problems: quality, function, performance, ease of use and ease of management.

 Basically, our VMS strategy is to remake Digital’s business. It has its roots in the lowest level of silicon technology and its aspirations at the highest levels of the com­pany’s business.

 We need the help of virtually everyone in the company to accomplish this. We can only do that through coordination and being of value to the people who will actually do the work.

 The new business unit structure should help to us in a couple of important ways. Our program management model is based on enabling and empowering groups. Our program office holds and manages no budget, other than to pay its own salaries. The business unit struc­ture makes that model of local ownership and responsibility into an operating principle. Groups will be given the freedom but also held accountable for the outcome for their piece of the total program. Also, in the new management system, budgets are sacrosanct. People can say, "This is what I need to get the job done." And when they get approval, they can count on those resources, and will be measured and held accountable for the results.

The Role Of Entry Systems (Microvax) Business Jesse Lipcon, manager, Entry Systems Business

 Digital’s main strategic thrust in the VMS system business is to be the world’s best server for heterogeneous multivendor networks with distributed desktop devices of all kinds. Based on our Network Application Support (NAS) software, our strategy is to allow a wide variety of hardware and software — such as IBM-compatible PCs, Macintoshes, Unix workstations, VMS workstations and X-Windows terminals — to work together smoothly as part of a network. Our servers, in many cases "entry-level" systems, will help turn personal productivity into organizational productivity.

 Another long-term strategic thrust is toward distributed production systems or "distri­buted mainframes." We can take the capabilities that exist today in centralized "glass house" systems and distribute them out to where the work needs to be done. In other words, with software, you make a number of smaller, "entry-level" machines work as if they were one very large machine.

 During the 1980s, the computer industry underwent a massive paradigm shift. The center of gravity for interactive applications moved from shared departmental to work group level machines, from time-sharing to intelligent desktop systems. That shift happened when certain underlying conditions were met.

 The desktop machines of the late 1970s and early 1980s weren’t very powerful but they were extremely inexpensive. If you measured them in terms of price/performance they were superior to shared machines. But their absolute performance was so low that you couldn’t do the same work with them. The major shift occurred when the absolute performance on the desktop equaled and bettered that of shared departmental machines and when certain en­abling technologies, such as local area networking and windows, were also readily avail­able. These conditions made it possible to write new classes of interactive applications.

 In the 1990s, I believe we will see another major paradigm shift. This time "run your business" or production applications will move from centralized "glass house" mainframes to "distributed mainframes" — networks of machines like our VAX 4000 system that can go anywhere.

 The underlying conditions seem to be ripe for such a change. Absolute performance of these smaller machines is increasing rapidly and will soon cross into the realm that has been known as "mainframe." At the same time a number of enabling technologies, such as dis­tributed database technology, are ready or almost ready.

 Today, the central "glass houses" are repositories of corporate data. But companies would prefer to have that data out where the action is, where people need to access it and use it. Distributing the data bases would reduce communications costs and also response time for interactive applications. And distributed smaller machines can be far more cost effective for data intensive applications than can large centralized systems.

 Another enabling technology that will soon be available is systems management that lets you manage a "distributed mainframe" as easily as you can manage a single mainframe today

 To a large extent, technical applications have moved already to the distributed model. The major shift will come when commercial applications such as accounts payable, accounts receivable, order entry, telemarketing and transaction processing move. Ultimately, all of the cash registers in stores are going to be directly linked back to banks for transaction processing.

 Digital with its VAX VMS systems has the opportunity to take a major lead in this paradigm shift and our entry systems will have a very important role to play.

 We changed our name from MicroVAX Business to Entry Systems Business because our computers were getting too powerful to be considered "micros." The MicroVAX name was appropriate when we first adopted it back in 1985. At that time, the systems were much less powerful than today, and we were trying to stake out a marketing position against machines based on the Motorola 68000 microprocessor. But with the introduction of the VAX 4000 system, we decided it was time to drop the term "micro" for both the product and the group. A ma­chine that can support 120 simultaneous ALL-IN-1 users, or can run 20 transactions per second in business applications, simply isn’t a "microcomputer."

 Today, this business represents a significant piece of the company’s hardware revenues and an even more significant piece of the company’s profits.

 In a slow market, we are doing comparatively well right now because we are on the upswing of a product cycle. We recently announced the VAX 4000 system, which is very competitive and is is doing much better than the products it replaced. But we are not growing as fast as we think we can and should over the long term.

 One of the reasons why our entry systems are doing relatively well is that they are de­signed to go anywhere — a branch bank, a manufacturing plant, an office, a lab, a store. You can put the machines where the action is.

 For instance, there is a MicroVAX system in every one of Blockbuster Video’s 1300 stores, and we recently sold 1100 more MicroVAX systems to Toys "R" Us. Those companies are using their computing strategy to gain competitive advantage. Toys "R" Us has the right inven­tory in the right place at the right time because with their MicroVAX network they know the pulse of buying patterns. Similarly, Blockbuster Video tailors the mix of videotapes in each store on the buying/rental patterns and demographics of the area.

 We work very closely with Semiconductor Engineering in Hudson, Mass. They develop the chips and we wrap the system around those chips and take it to market. Some of our key people transfer back and forth between our group and Hudson, which leads to cross-fertil­ization of ideas. Each project is really a joint project. We share simulation models and debug chips in the systems together. This requires very tight teamwork, and we’ve worked that way ever since the MicroVAX II development project, six years ago.

 We have a similar close relationship with Digital engineers in Jerusalem, Tokyo and else­where around the world. When you work closely with people over the network, who reports to whom becomes irrelevant. We just work together toward common goals.

 We also have a tight coupling with Manufacturing. For the last five years we had a close partnership with the Westfield, Mass., plant. Now Westfield is getting out of the systems business, as part of the company’s overall cost reduction effort, and we are starting up an equivalent relationship with the Kanata plant in Canada.

 Ayr, Scotland, is the plant where we make all of our Entry System products for Europe. It will also be the prime plant for some of our new systems. We have an engineering group (Entry Level Solutions or ELS) located at the same site. They are responsible for devel­opment or our lower priced systems. Having engineers located in the same facility as manufacturing means both organizations can work together on a project from day one and we can optimize the design for the process in the plant.

The ‘Six Sigma’ Program In Storage Systems by Art O’Donnell, quality manager, Storage Systems

 Last year, Storage Systems started its "Six Sigma" quality effort, based on a model de­veloped at Motorola.

 "Sigma" is a statistical term for measuring process variation. A "six sigma" design means that six units of process variation fall between the upper and lower specification limits. "Six sigma" refers to the tolerance or degree of variation that a defect-free design allows for.

 In the real world, no process can be exactly repeated time after time. There is always some variation. Our goal is to reduce the amount of process variation and also to set specifications limits at realistic levels so there are almost no defects produced due to process variation. A Six Sigma product/process design will produce no more than three defective parts per million.

 To accomplish this requires very close teamwork between engineers and manufacturing peo­ple. Engineers have to know what the manufacturing process is capable of, and then design within that tolerance. Process designers must ensure that processes are in control and that process variation is minimized.

 For instance, suppose that you are adding a garage to your house. If you design and build your garage door to be exactly four feet wide, and then measure your car and find it is exactly that same width, you are going to have a lot of scratches and dents on the sides of the car and the door — lots of defects. Even if you drive the car perfectly centered and try to fit it in just right, you are still going to have scratches. In this example, the four-foot wide car represents the manufacturing variation, and the four-foot wide door represents the engineering specifications. To fix this problem, you can either buy a two-foot wide car (maybe a motorcycle), or build that door eight feet wide. In other words, provide more tolerance with a bigger garage, or control the variation, with a smaller car.

 Of course, you wouldn’t set out to design that garage door without knowing the dimensions of the car. But, in the past, we sometimes designed products and processes that way.

 "Process" in this case need not necessarily mean "manufacturing process." The same con­siderations apply to how we answer phones, how we handle accounts receivable, and other processes throughout the company. We need to make sure we have the capability to handle the demand at the performance level we want. But, far too often, we tend to neglect that problem.

 Digital’s Six Sigma program consists of three processes: one for design and manufacture, one for administrative work and one for the development of software. All of these have an underlying basic assumption - that defects are preventable. By understanding the re­quirements and properly designing the process, you can have a virtually defect-free en­vironment.

 When we decided to do Six Sigma in Storage Systems, we realized that a quality effort requires management leadership and involvement at the top of the business unit to be effective.

 Grant Saviers and a members of his staff worked with Motorola and developed an eight-hour training session on all three of the Six Sigma methodologies. Grant then taught this course to his entire staff. Within ten days, each one of his staff members had to teach their staffs; within ten days they had to teach their staffs; and so on, to the production floor.

 This "waterfall learning" required management to become actively involved and learn about these quality metrics and processes to a significant level of detail. Having managers conduct the training helped ensure an understanding of the process and bond a common language through the organization. In three months, we trained over 6,000 people.

 The basic waterfall learning has been augmented by a supporting curriculum of four major courses, where people can get applications-level learning. One of these courses — "De­sign and Manufacture Six Sigma" - uses a hands-on case study technique. We split the class into groups, each of which gets the same set of customer requirements. Each group must interpret those requirements in terms of size, height and cost to design and build a prototype of a "tinker toy" tower. The groups also have limited time to figure out how to meet the customer’s requirements. When the groups present their results - the prototypes — it’s amazing how different their solutions are. Next we give each team another set of "tinker toys." This time the parts are not perfect and some are not available or are defective. Each group must now build a pilot based on their prototype. They have to make trade-offs and be creative to make do with parts don’t quite work and they have to do it within the time they estimated for production. Then we add up the cost for the prototype vs. the pilot and determine whether they were really able to build what they set out to build. In this exercise, They get see how far off the actual production can be from what you started with in the design.

 This class then takes them through the steps of Design and Manufacture Six Sigma. It deals with identifying the customer’s requirements, determining whether those require­ments are met by process, part, or both; determining the process capability, and redesign­ing, if necessary. Finally, with this process in mind, they get another set of "tinker toys," and a whole new case study, and set out in a much more systematic way, with a clearer concept of the importance of customer requirements and the need to work as a team while considering cost and quality goals.

 Six Sigma is a journey. You don’t get there tomorrow. For us in Storage Systems, Six Sigma is at least a six year journey. In the first six months of this program in Storage, we reduced reported defects by 35%. We’re aiming for 60% improvement by the end of cal­endar year 1990 and a hundred-fold improvement by 1993. And we plan to reach Six Sigma levels (no more than three defects per million) by 1996.

While doing this, we are continually introducing new products. In our metrics we don’t start all over with each new product, rather, the defect rate of the replacement product has to be equal to or better than the existing product. This is a very aggressive and difficult target. But we are well on the journey, and we expect to get there.

Internal Group Teams Up With Business Unit To Meet Customer Needs by Peter Brown, manager, Corporate Telecommunications

 Last summer, as part of the company’s movement toward business units, Corporate Telecom­munications, which had been part of Dan Infante’s Information Management and Technology (IM&T) organization, moved to Telecommunications and Networking (T&N) under Bill Johnson. This put the people who design, manage, and deliver our internal network and services in closer touch with the people who design and market networking products and services for customers.

Better understanding of what it takes to deliver our internal communications services leads to better product offerings for internal and external customers. Also, internal telecommunications people help marketing people frame messages better targeted at the true needs of telecommunications managers. This is particularly important because telecommu­nications managers are playing a larger decision-making role as information systems and telecommunications functions evolve.

The organizational change was motivated in large part by the increasing demand for our internal telecommunications staff to help the sales force and Digital Customer Centers (DCCs) sell complex network solutions to large customers. This role has evolved over the past few years from informal peer-to-peer sharing of experiences with customers, to more formal consulting. We help customers as long as we possibly can, but must balance prior­ities to make sure Digital’s network needs are met.

 Today, everyone in Corporate Telecommunications supports our common goal of helping the sales force and customers, while at the same time ensuring that the internal network continues to function as a first-class example of how technology is integrated with busi­ness. Another critical role for Telecommunications is to ensure that all the pieces of the Corporate communications infrastructure, including all the data centers and networks, stay closely linked and interact appropriately.

 Before the change, we had a group of extremely dedicated professionals who understood that their main customer was internal Digital. Now we have to serve not only internal Digital businesses but also with many of Digital’s customers. Today, the demand for us to talk to customers far exceeds our capacity to meet that demand. This means we must prioritize which requests are the most critical. To do that, we work closely with the Digital Cus­tomer Centers (DCCs) and Corporate account managers in a qualification process.

 This high level of demand for customer contact is due in large part to the fact that our network is so large and efficient. Maintaining that high level of performance is impor­tant not only for the Corporation, but also for establishing and maintaining credibility with Digital’s customers.

 Corporate Telecommunications is responsible for the transmission network — the wires and satellites that enable voice and data to move around world. In communications, this is similar to a highway system. On top of this system, we place a number of users — like vehicles upon a highway. These include internal computer-to-computer communication (which we call "EASYnet"), a wide-area terminal network, the Digital Telephone Network (DTN) and the Digital Video Network (DVN).

 We also have other special networks, like our ACT Network, which connects our Application Centers for Technology, and our ISV Network, which we use to communicate to our Indepen­dent Software Vendors. Those are all different uses of the same transmission capability — different kinds of vehicles running on the same highway system. If you talk to the manager of the ACT network, she will tell you that she has her own separate network. In reality, she has a partitioned piece of EASYnet. She thinks of it as her separate net­work, but it uses the common highway system.

 Network applications, such as mail and videotext, represent the cargo that is carried by vehicles. As managers of this highway system, we have to determine what kind of vehicles can ride on it where and when. (In some places, you can have 18-wheel trucks, and in other places only small cars.) Then we have to take into account what goes in each of those vehicles and how that might affect overall traffic.

 A critical, but often under-appreciated piece of our network is our voice network. We have one of the most efficient voice systems in the United States and probably in the world. You can sit anywhere in Digital and dial seven digits to reach virtually any Digital office in the world.

 Today, the EASYnet connects more than 60.000 computers across the world, while our largest non-government customer has only about 4,000 computers on its network. For years, this network of ours has served as a test bed for Digital’s products and services, a showcase, and a major selling point for customers who are planning to expand their own networks.

 But, we cannot afford to be complacent about this capability. Already, many customers now have multiple networking environments, while our internal operation is dedicated primarily to DECnet networking. In other words, while we are still far ahead of our customers in the size of our computer-to-computer DECnet network, we have a lot to learn in the area of heterogeneous computing and the use of UNIX. While we will, of course, continue to use DECnet software, we are at the same time now adding TCP/IP and AppleTalk* as we move our internal network to a heterogeneous or open systems networking environment, which more closely resembles what some customers have today and many more will have in the future. In this effort, we hope to not only improve internal service but also to become a better showcase for Digital’s heterogeneous computing capabilities.

 * AppleTalk is a trademark of Apple Computer, Inc.

Digital’s Property Disposal Center by Carmine Riccioli, U.S. Area Program Manager

 Digital’s Property Disposal Center (PDC) in Contoocook, N.H., is turning disposal problems into profit opportunities.

 The PDC processes obsolete and excess equipment of which the company generates about 18 million pounds per year. Through the joint efforts of the Corporate Waste Management Group and U.S. Manufacturing, the disposition of this material has been turned into a business with profit and loss ownership and responsibility.

 It has metrics, just like any Digital Business unit. We measure all processes and trans­actions so we know how to maximize the revenue dollars from sales, and how to make the most of commodity reclamation.

 The PDC operates as a reverse manufacturing facility, with the same kind of logic and work flow that any well-designed manufacturing operation has.

 Our mission is to process and dispose of excess and obsolete equipment in an environment- ally-sound manner, while protecting Digital’s proprietary information. All this builds

 Digital’s environmental image. Better yet, it doesn’t cost and eventually it will pay. We are projecting a $3.8 million cost saving in FY/91.

 Traditionally, Digital has safely and effectively disposed of waste materials generated by operations, meeting or exceeding environmental regulations, without risking security. In the past, this work was done mainly by vendors and contract people. Now we use only our own employees, who are making important new contributions in terms of lower costs, tighter security, minimizing long-term liabilities, and getting more money back from reclamation. We see the PDC as a tool to manage excess and obsolete equipment to the benefit of Digi­tal, our customers, our communities, and our environment.

 When customers and internal users turn in their old equipment, the Returned Materials Group ships it to the PDC. Most of this equipment contains valuable metals and other materials, and reclamation can be very lucrative. For instance, it is possible to crush modules to reclaim gold and silver. At the same time, we must be environmentally respon­sible, dealing carefully with hazardous substances, and we must also protect Digital’s proprietary information.

 The PDC does not process hazardous waste (that’s done locally at each site). We don’t process waste from facilities such as scrap lamps, wiring conduits, studs and so on. And we definitely do not want scrap furniture. It doesn’t make sense to ship these items across the country when they can be readily disposed of locally.

 Because the PDC is a reverse manufacturer, we’ve had to learn to watch the commodity markets to pick the best times to sell these metal and other items. This ‘3-Rs’ process (recycle, reclaim, resell) means savings, eliminating of toxic waste disposal problems, and giving constructive feedback up-line to Engineering. This feedback could help tomor­row’s products contain less or even none of the toxic material you’ll find in yesterday’s products, by eliminating mercury switches, reducing the lead shielding in cathode ray tubes (CRTs), and so on.

 Our PDC grew from a Proposal and an Implementation Plan developed by two cross-functional teams, with a great deal of input from affected groups and functions. We had a good model in the work of the Phoenix Asset Recovery Group, which Paul Kapelke managed for 10 years as a profitable operation. Their operation is now being consolidated with the new PDC which opened in July 1990, in Contoocook, N.H. We studied Phoenix and used many of their ideas and experiences in our Proposal and Plan.

 Employee involvement and teams are at the heart of this enterprise. Teams wrote the Proposal and Plan, and successor teams continue today in important coordination roles. We involved the people who would be doing the disassembly work to design their own work flow. And, in the spirit of continuous improvement, they continue to be involved in improving the processes.

 Today, our biggest learning issue is figuring out how to fine-tune the scheduling of truck deliveries so the PDC people know ahead of time what items are coming. That way, they can adapt the disassembly process to the items before they arrive. Meanwhile, we are applying the principles of continuous improvement to refine our metrics and operations.

 We are asking hard questions: Is it feasible to disassememble certain items, or do we just bail them and sell them? Should we bother separating cables to recover the copper? And what about any new commodity markets we may or may not know about yet?

 The PDC Program was designed to be a model that could be adapted and used worldwide.

Fraud - Everyone’s Business by Chuck Bushey, Manager, Investigative Services

When I say "security," what do you see? Images of guards, property passes and Digital parking tickets?

There’s a lot more to security than that. We’re in business to help protect Digital’s assets, physical, financial and intellectual, as well as its employees. But we can’t do it alone. We’re here to provide resources to managers when they suspect malfeasance.

 Digital consists of more than 120,000 people. They reflect the society in which they live. And a few will bring society’s problems to work with them each day — crime, drug and ethical problems. We shouldn’t be shocked to learn that once in a while, these same problems crop up in the Digital environment.

 In reality, only a tiny percentage of employees have ever engaged in fraud, questionable ethics or other negative behaviors. When these happen, we’re here to assist managers in resolving the allegations, and when necessary, make referrals to prosecution authorities. We’re talking about everything from embezzlement to outright theft of property, physical or intellectual.

 Intellectual property drives Digital’s success, so it’s especially important to keep new ideas and processes from falling into the hands of competitors.

 Because we do not publicize these matters, some people may not be aware of the kinds of fraud that do occur and the action that we take.

 "Small stuff," in our business, doesn’t always mean minor. Computer module boards, for example, are worth thousands of dollars — but they fit nicely underneath a shirt or jacket. Those boards find their way to the secondary marketplace and maintenance houses and then compete with our legitimate parts. If the stolen boards happen to be scrapped items, customers may blame poor quality on Digital. This hurts our balance sheet and our reputation.

 We’ve had a number of cases where employees have submitted bogus receipts and otherwise defrauded the company. Employees are terminated and referrals made to the authorities in such cases. (Managers in the U.S. should review Personnel Policy 5.11 if they have ques­tions about expense reports.)

 In addition to module theft and expense report fraud, we have dealt with cases that in­volved:

 o diversion of orders from Digital to a small vendor who was willing to pay "finders fees" to the Digital sales person;

 o fabrication of sales orders by a sales unit manager for purposes of "making his num­bers,"

 o a scam to fraudulently pay commissions to recruiting agencies;

 o computer "hacking," network break-ins;

 o improper sale of software designed by an employee;

 o kickbacks from vendors, etc.

 During these investigations, we are often told by managers and employees that they did not know Digital had a group who could help resolve serious allegations of wrongdoing. (They are also sometimes unaware of U.S. Personnel Policy 6.22 which states that employees will be terminated for fraud and the investigative results forwarded to the authorities.)

 Obviously, managers who are held to performance matrices don’t want to escalate "trouble." While that may be a normal reaction, it is not what the company expects and requires from its managers. If ignored, situations can escalate far beyond what they would have been if Security had been called earlier.

 In one case, a manager delayed reporting missing equipment for four months. Had the unit manager called us as soon as the loss became apparent, we could have traced the shipment and possibly recovered it.

 Don’t hesitate to call your security representative or Corporate Security for help. When your group or unit experiences loss, theft or fraud, don’t feel that you’re a poor mana­ger. You’re a victim of a corporate "mugger."

Open Door Policy Revised

 Recognizing that the environment has grown increasingly complex and that processes de­signed to preserve the company’s values and traditions may no longer work as intended, Digital has reviewed its Open Door Policy and made significant changes.

 The central problems with the old policy were:

 o employee fear of retaliation,

 
o a vague and unstructured process with no clear starting and ending points, and o no clear separation of advice and counsel from review and appeal.

The new policy, the complete text of which appears here, is intended to address those problems. (This policy appears in the "Orange Book" of U.S. Personnel Policies and Pro­cedures.)

The "philosophy" and "policy" sections of this document are worldwide. The "practice" section is intended for U.S. only. Other countries will develop their own "practice," consistent with local law, culture and custom.

The responsibilities and duties associated with this new policy will soon be established, and Personnel will provide training for managers.

Philosophy (worldwide)

 The company’s goal is to provide an environment that permits all employees to engage in open, two-way, constructive communication. The company believes that employee issues can be most effectively addressed in this manner. In most cases, this communication and reso­lution will take place between employees or between an employee or manager. If an employee believes an issue cannot or should not be resolved with another employee or with his or her manager, he or she can use the company’s Open Door Policy to elevate questions or concerns as high in the company as necessary to obtain a final resolution.

 Policy (worldwide)

 It is the policy of Digital to provide a process for all employees that enables them to raise their problems and concerns to appropriate Digital resources, either inside or outside their organization, without fear of reprisal. It is also the company’s policy to require managers to provide clear, timely, and final response to all issues raised by employees in accordance with this policy, or to elevate those issues to the appropriate resource within the company. The overall objective of this policy is to continue to make Digital an outstanding place to work for all employees.

 Practice (U.S.)

 The practice outlined in this policy is designed to establish clear standards for the implementation and operation of the open-door policy, define responsibilities, and gen­erally develop a consistent framework which can be used by all employees to raise and resolve issues across the company. Each organization (defined as a business unit headed by a member of the executive committee) must identify an individual in the organization (Open Door Resource) who will be responsible for the following: o ensuring that the organization makes a decision on any Open Door issue(s), o reviewing decisions made,

 o investigating issues, as appropriate,

 o ensuring that the organization’s final decision is clearly communicated to the employee

 In addition, that organization’s Open Door Resource may escalate any issue(s) to the most senior manager in the organization, if they feel it is appropriate to do so.

 Corporate Employee Relations and Values will also identify an individual (the Corporate Open Door Resource) who will review issues/decisions brought to his or her attention by employees, an organization’s Open Door Resource, line managers, or other company resource groups as defined later in this policy. The Corporate Open Door Resource will formulate and communicate the company’s final position on any issues elevated to his or her atten­tion. Once the Corporate Open Door Resource makes and communicates the company’s position, it will not be subject to further review within Digital unless, in the judgment of the Corporate Open Door Resource, there are significant new or additional facts that necessi­tate a reconsideration.

 Employees are encouraged to raise any problem or issue to their immediate manager/super- visor as the first step in resolving any issue under this policy; however, they are not required to do so. Employees may begin the process with any Personnel representative or higher level manager/supervisor within their organization. They also may begin their Open Door review with the organization or Corporate Open Door Resource, or other appropriate company resource group (i.e. Employee Relations and Values, U.S. EEO/AA, U.S. Employment, etc.) Employees may also transfer or elevate issues to the Corporate Open Door Resource, or appropriate Personnel resource group at any time during the process.

 Retaliation against any employee for utilizing this policy could result in disciplinary action up to and including termination.

 Former employees of Digital may utilize this policy as well.

 Individuals directly involved in the decision-making concerning any employee issue(s) must excuse themselves from the Open Door review of that decision.

 Senior managers will be periodically briefed concerning employee issues raised through their organization’s Open Door process.

 Employees must identify all individuals who have been involved in reviewing their issues when negotiating this nolicv.

 Open Door Standards

 o The Open Door procedure established by the organization must permit employees to begin the process with any personnel representative or higher level manager/supervisor within their organization. It may not require employees to start the process with a particular manager within their organization (e.g., with their immediate supervisor), nor can it prohibit the employees from escalating their issues to the Corporate Open Door Manager or to any other appropriate corporate resource.

 o A senior manager, having high levels of organizational visibility and credibility, will be appointed The Open Door Resource. He/she will have overall responsibility for the Open Door process in a particular organization. This person will have access to the highest levels of management within that organization. He/she will ensure employees at all levels are aware of the Company’s Open Door Policy and Policy and Practices. He/she will ensure employees understand their individual responsibilities, will coordinate quality reviews of employee issues, will establish a company position on their issues, and will clearly communicate that position to the employee in a timely manner. He/she is functionally connected with the Corporate Employee Relations organization.

 o The Open Door procedure established by the organization must also permit employees to initiate the Open Door process by immediately bringing their issues to the Corporate Open Door Manager or to an appropriate personnel resource group (i.e. Corporate EEO, Corporate Employee Relations, Compensation, etc.). The procedures must also permit employees to transfer or escalate issues to the Corporate Open Door Manager or appro­priate personnel resource group at any time during the process.

 o All procedures must require the first manager or personnel representative to whom the issue is raised to either resolve the problem or identify and transfer the matter to some other appropriate resource. In so doing, the transferring manager or personnel representative is responsible for assuring that the resource to whom the matter is assigned understands and accepts responsibility for resolution and timely communication of that resolution to the employee.

 o The procedures called for by this policy must be submitted to the Corporate Employee Relations manager for review prior to use in the organization.

New Marketing Organizations Focus On Unix-Based Software, Systems

Digital’s UNIX-based Software and Systems (USS) group has formed two new marketing organ­izations to focus on UNIX business opportunities. The two new teams, the DECsystem Ser­vers & Multi-user Systems Group and the USS Channels Marketing Group, are the final pieces of the recently established UNIX-based Software and Systems (USS) group, headed by Dom LaCava, vice president.

"These new teams add focus in areas that are critical to Digital’s goal of being the top supplier of UNIX-based RISC systems and services," said Dom. Other teams within the worldwide USS organization include Workstations, ULTRIX Operating System and Tools, Real­time Computing, Independent Software Vendors Group, and Field Programs. Engineering and marketing support for USS resides in ten different worldwide locations— Palo Alto, Cal­if.; Maynard and Marlboro, Mass.; Nashua, N.H.; Bellevue, Wash.^ Manalapan, N.J.; Yoko­hama, Japan; Sydney, Australia; Valbonne, France; and Reading, England.

The DECsystem Servers & Multi-user Systems Group, headed by Roslyn Morvay, focuses on delivering the benefits of UNIX-based RISC technology to commercial users. The group is responsible for market research, competitive analysis, product introductions, market-dir­ected sales programs, and training worldwide for Digital’s RISC-based systems and servers.

The USS Channels Marketing Group, managed by Deane Curran, is chartered to provide cooper­ative marketing support and business direction to all volume sales and distribution chan­nels for Digital’s R1SC/UNIX products worldwide. This includes product training, recruit­ment of value-added resellers, and marketing and advertising programs that support Digi­tal’s value-added wholesalers, such as Merisel. Both Roslyn and Deane report to USS Marketing manager Matt Kochan.

Since this past summer, the USS group has intensified its marketing and sales programs and made dramatic pricing/performance changes to its products.

Those programs include:

o Increased UNIX sales support — the addition of 1,000 UNIX specialists to the Digital service organization;

o Expanded UNIX technical training v classes attended by 10,000 sales representatives in both the U.S. and Europe;

 o Seven new ULTRIX resource centers in key cities throughout the world;

 o A complete worldwide marketing/sales organization reporting directly to Dom; o Industry’s first International Independent Software Vendors Business Forum for vendors and distributors

 o New RISC/UNIX servers - the DECsystem 5100 server and the DECsystem 5500 server - offering leadership price/performance;

 o Lower entry-level workstation prices to compete with Sun Microsystems, Inc.;

o First OSFmember to commit to shipment, announce development of OSF/1* toolkit.

Key Appointments Made In Finance

Bruce Ryan, vice president and Corporate Controller, and Dick Fishbum, vice president, Finance Operations, have announced the following appointments in the Finance organization:

Steve Behrens has accepted the position of Assistant Corporate Controller, reporting to Bruce. In this role, Steve is responsible for internal controls, accounting policy, and providing leadership in both strategic and tactical programs in the delivery of quality worldwide accounting information. He is also responsible for integration of the Financial Initiative sales and marketing programs. Most recently, Steve was U.S. Finance manager and served as a member of the U.S. Management Committee. Before joining the U.S. Finance organization, Steve was SSMI Finance Operations manager. Prior to that he was Senior Group Controller for Low End Systems. He had held other senior Finance positions in Engineering since joining Digital in 1980.

Don Resnick has been named Finance manager, Product and Price Analysis, reporting to Bill Strecker, vice president, Engineering, and Dick Fishbum. In this position, Don is re­sponsible for overall financial support for Product Creation Units and their interface with other business units of the company. He joined Digital in 1977 as a Product Group Controller for A&SG. Later he went to Europe as a Finance and Administration manager. After returning from Europe, he held the position of F&A manager for SSG and OEM, and has been the GIA Finance manager since 1985.

Dave Spratt has been appointed GIA Finance manager, reporting to Dick Poulsen, vice pre­sident, GIA, and Dick Fishbum. Since joining Digital in 1979, Dave has held a variety of financial management positions, including Controller for Low End Manufacturing and Product Group Controller for Computer Special Systems.

Tony Wallace is the new U.S. Finance manager, reporting to Don Zereski, vice president, U.S. Area, and Dick Fishbum. Most recently Tony was Customer Services Finance manager. Prior to that he served as Corporate Internal Audit manager for three-and-a-half years. He joined Digital in 1980 as U.S. Controller of Computer Special Systems, followed by assignments as Finance manager of Peripherals and Supplies Group and High Performance Systems.

Digital Announces New Corporate Services Organization

Digital announced the creation of a new Corporate Services organization, combining its corporate Enterprise Integration Services (EIS) and its corporate Customer Services ac­tivities. Russ Gullotti has been named vice president, Corporate Services.

Jack Smith, senior vice president of Operations, stated, "This announcement underscores both our desire to improve responsiveness to customers and to simplify our organizational structure."

In this new role, Russ, formerly vice president of corporate EIS, is responsible for ensuring a coherent and integrated portfolio of total services that best meet customers’ diverse needs on a global basis.

Customer Education/Executive Programs And Media Communications Group Join Marketing

Formerly part of Educational Services, the Media Communications Group (MCG), under Don Elias, and Customer Education/Executive Programs, under Dave Berry, are now part of Pro­duct and Industry Marketing. Don and Dave also are now members of the marketing commu­nications team managed by Peter Zotto.

"The experience and expertise of these two key Digital organizations will surely serve to enrich our marketing efforts," says Peter, "drawing these professionals closer to the many Marketing organizations that they support."

The Media Communications Group has offices in seven sites in Massachusetts and New Hamp­shire as well as satellite organizations in Europe and Japan. MCG develops and produces most of Digital’s marketing communications programs and tools, which include literature, audio/visual products, business television (DVN/DCVN), and direct marketing support. The group is a major contributor to DECworld and Sales and Services excellence events, and manages such corporate Sales and Marketing programs as the Digital Reference Service, OPAL, and the Impact program. MCG also continues to be responsible for managing, with Educational Services and other business units, such programs as DVN, Electronic Publishing and the Electronic Library.

Customer Education/Executive Programs, which include the Corporate Leader’s Forum (CLFs), Digital Discovery Seminars (formerly Tapestry), the Network Fellowship Program and the AI Fellowship Program, impact over 50,000 customer-managers in the course of a year, accord­ing to Dave Berry.

Charlotte Frederick Promoted To Vice President

 Charlotte Frederick has been promoted to vice president of Storage Manufacturing and Process Technology, reporting to Charlie Christ, who manages the Mass Storage Systems and Information Management Group. She also reports functionally to Bob Palmer, vice president, Manufacturing.

 Charlotte is now responsible for Mass Storage Manufacturing Operations in the U.S. (Col­orado Springs, Springfield, Tempe and Shrewsbury Plants), as well as Thin Film Media and Heads Engineering Development Groups in Colorado Springs and Shrewsbury.

 In 1984 Charlotte started the Storage Process Technology organization to develop and implement strategic technologies. "She has built a world class Thin Film technology group with competitive products," said Charlie. "Some of her group’s achievements include fully integrated Engineering and Manufacturing work; a "high performance" organization with fewer levels, self-managing work groups and productivity gains above 20% per year; and leadership application of Six Sigma and benchmarking in Digital."

Charlotte is a member of the Corporate Technology Task Force and the Engineering Education Board. She represents Digital in several industry and academic consortia regarding en­vironmental issues and manufacturing technology.

New Corporate Public Relations Assignments

 Jef Gibson has been named Product Business Unit Group Public Relations (PR) manager, Nikki Richardson - Corporate Information Group manager, and Mark Fredrickson Public Affairs PR manager. All three report to Dallas Kirk, manager, Corporate Public Relations.

 Jef will coordinate the PR activities of the Product Business Units and be the PR func­tional manager for PR team leaders in that area. In this capacity, Jef will review Bus­iness Unit PR plans, provide PR counsel to the Business Units, and help generate syner­gistic public relations. He has been with Digital for 12 years, most recently as manager of the Corporate Information Group and a member of the Corporate PR Staff.

 Nikki will manage the Corporate Information Group (CIG), which provides PR planning and implementation for Employee Relations, Security, Real Estate/Property Development/Fac- ilities, Community Relations, Finance, Manufacturing, Engineering, Legal, Environmental/- Waste Management, Health and Safety, Quality, and Purchasing. In addition, the group handles senior executive counseling and PR support, annual report project management, and crisis communications management for the Corporation. Nikki has been with Digital for four years, all of them as a member of the Corporate Information Group. She has 16 years of experience in the communications field.

 In his newly-created position, Mark will develop and implement worldwide public relations programs that address the growing impact that governments and public policy have on Digi­tal’s business. As governments in the 1990s increasingly emphasize economic and techno­logical competitiveness, the opportunity for Digital to raise its public voice on critical policy issues affecting the company will only become greater. Mark will be responsible for identifying those key issues and managing the public relations activities in support of Digital’s positions. This will include building relationships with a new category of journalists and publications, and working within the United States and with subsidiaries in Europe and GIA, to coordinate and integrate mutually beneficial activities. He also will work closely with the Government Relations and International Trade & Policy organi­zations. Mark has been with Digital for seven years, including the past four as a member of the Corporate Information Group.

 Appointments

 Michel Ferreboeuf has been named vice president, Country Group manager of Digital Europe, reporting to Pier Carlo Falotti, president, Digital Europe. He joined Digital France in 1973 as Sales Unit manager and became Sales Group manager in 1976, and Country Sales manager two years later. In 1982, he was promoted to Country Marketing manager. In 1983, he became Marketing manager Europe, and in 1984, Systems Business manager, France. His most recent position has been Country manager France since 1988.*

Karen O’Connor has been appointed Worldwide Personnel Controller, reporting to Dick Far- rahar, vice president, Personnel. In this role, she is responsible for establishing an integrated financial strategy for Personnel, and providing functional leadership in de­livering financial services and programs to the Personnel organization. She is a member of the Corporate Operations Finance Staff and the Personnel Management Team. She joined Digital in 1984 as a Strategic Planning Financial Consultant. Her most recent position was Corporate Personnel Controller, which she held for two years.

 Bob Schmitt has been appointed manager of U.S. Sales Support, reporting jointly to Ray Wood, vice president, U.S. EIS, and Bob Hughes, vice president, U.S. Sales. In this role he works for the Sales Sector managers. District Sales Support resources continue to report to their respective Sales managers. Bob’s direct reports include the headquarters Sales Support functions. Bob is presently director of Systems Marketing for GIA. Prior to that he was Marketing manager for the Far East Region in Hong Kong. Before moving to Hong Kong, Bob was Marketing managerfor Networks and Communications, the Telecommunica­tions Industry Group, and Sales Programs manager for the Telecommunication and OEM Group.

 Abbott Weiss has been named group manager for the Wholesale/Retail IBU (Integration Bus­iness Unit). This business is part of the Services Cluster managed by Bill Steul. Joe Ricevuto, manager of the Retail business, and Tom Colligan, manager of the Wholesale business, will report to Abbott. Abbott has been with Digital for 17 years, serving most recently as Secretary to the Executive Committee. He is the Executive Partner for two California Sales Districts, Santa Clara and San Francisco, and for two major accounts, Lockheed and Bechtel. His previous positions at Digital include U.S. Area Manufacturing manager and Corporate Materials manager.

 Ray Wood, U.S. vice president of Manufacturing/Distribution Sales, has been named vice president of U.S. Enterprise Integration Services, reporting to Russ Gullotti, vice pre­sident, Corporate Services, and Don Zereski, vice president, U.S. Area. Ray has been with Digital since 1972. As U.S. vice president of Manufacturing/Distribution Sales, he is responsible for corporate and national accounts in the Discrete Manufacturing, Consumer Packaged Goods, Forest Products, and Wholesale, Retail and Distribution markets. Ray has held other Sales and Marketing management positions in Digital, ranging from vice presi­dent of Electronics Industry Marketing to U.S. Geography Sales vice president to Unit and Branch Sales management.

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