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Volume 2, Number 12           December 1983-January 1984


Manufacturing Realigns


PC Programs Speed Deliveries


Win Hindle Talks About Product Demand


Support For DECSYSTEM-10/20 Customers. Jack Shields Explains Digital’s Strategy


Disk Technology Boosts Sales


PC Task Forces Formed


New Corporate Security Director


Digital Forms New Systems Research Center In Palo Alto


Manufacturing Realigns


Manufacturing has made several organizational changes to better focus and more effectively use its current strengths. According to Jack Smith, vice president, Manufacturing and Engineering, these changes are intended to:

o provide greater management attention and control over current operations


o continue to establish proper linkages between Manufacturing and Engineer­ing, and between them and other corporate functions.


"Effective immediately," says Jack, "I am asking Bill Hanson, in addition to his current responsibilities, to ensure that we have a fully coordinated set of operating plans across all Manufacturing operations, for reviewing and carrying out those plans and for all other issues that affect the day-to-day operation of Manufacturing. To support Bill in these responsibilities, Finance and Administration (Dan Infante), Manufacturing Planning (Dave Knoll), Far East Support (Ed McDonough) and Low-End Manufacturing (Dick Esten) will report directly to him.


"Manufacturing operations organizationally coupled with Engineering groups -- Storage Systems (Grant Saviers), LSI (Jeff Kalb) and Far East (Dick Yen) -- will continue to report to me. Personnel (Larry Bornstein), Process and Design Support (Don Metzger) and Corporate Purchasing and Materials (Bill Thompson) will also continue to report to me.


"The Boards Process Group (Don Hunt) will become part of LSI Manufacturing/ Engineering, reporting to Jeff Kalb," says Jack. This will bring together these base technology groups with similar process-intensive operations and business challenges.


"The Corporate Quality Control function will transfer from me to Win Hindle, vice president, Corporate Operations. We believe this will give this in­creasingly important function corporate-wide management attention.


"This evolution in our Manufacturing organization greatly strengthens our long-term abilities while giving us greater focus on operational issues. We have new momentum in the marketplace now, and our number one priority is to keep this going."


PC Programs Speed Deliveries


Programs are being set up to help speed the delivery of Digital’s three personal computers to customers. These programs were set up during Q2 to better support the sales efforts in the Field.


Three of these programs are the responsibility of the Low-End Business Center. They are "PCs to the Districts," "DEC-24," and "The Order Action Desk.


"We're a separate order administration organization, even though we're part of Manufacturing," explains Dawn Greeley, manager of the Center. "Most of the other parts of Manufacturing do the scheduling and the shipping, and someone else does the invoicing and bookings for them. The Low-End Business Center is responsible for all personal computers, printers and videos. We book, schedule, ship, and invoice orders."


The Low-End Business Center does two kinds of business. It ships directly to individual customers. It also transfers units from stockroom to stock- room, so that other Digital people can fill orders. Europe and GIA repre­sent two stockrooni-to-stockroom transfers.


PCs to the Districts was created to physically demonstrate that PCs were available for immediate delivery. It was implemented in early November in 20 locations for all 30 U.S. districts. The inventory is owned by the district sales manager and managed by the Field Service Logistics manager.


"We transfer the PCs from our stockroom to their stockrooms. Then they fill orders locally. Product quantities and configurations are extremely limited through this program. We started with 100 units in each district. They maintain that within plus or minus 50 units. Products are in fixed configu­rations. In other words, you get a monitor of choice and a printer of choice, but there are only about 50 line items," explains Dawn.


"There are over 4000 PC units in the Field through this program. We started with nine districts, and then phased in seven more, then another seven, etc. We did it in chunks, because that's a tremendous amount to ship in one week," says Dawn.


"It's the district's inventory, and they can manage it any way they choose. If a customer needs a few units in a hurry, the district can immediately take care of that out of its own inventory. Since there is about a ten-day lead time between when they order new units from us and when we replenish their inventory, the districts have to be conscious of the impact of with­drawing large quantities from their warehouses at one time. Our goal is to reduce that ten-day lead time for deliveries, but we aren't there yet."


Another program, DEC-24, was piloted in the Central Region. Inventory for DEC-24 is held in Northboro, not in the Field. It involves a warehouse separate from the Springfield warehouse, which is the main distribution center for PCs. The people who take orders and those who fill orders for DEC-24 work in the same building in Northboro, which is stocked with a couple of days of inventory.


"An important point about DEC-24 is that it's only a telephone call away from the Field office. The person taking the call literally enters the order while on the phone. All we need is the minimum information required to ship the product. With DEC-24, from the time the office receives the order to the time the product leaves our dock is less than 24 hours. Beyond that, it becomes a transportation issue.


"The DEC-24 program maintains a product availability menu. This means that we only take orders for products that we have in stock. So, we can ship what we commit to ship," emphasizes Dawn.


DEC-24 is still being piloted in the Central Region, but plans call for it to be nationwide by the end of Q3. Eventually, there will be a much larger menu of items available through DEC-24.


"The ultimate goal is for the DEC-24 Program to eliminate the need for the PCs to the Districts Program," Dawn notes. "This will alleviate any inven­tory management issues in the Field. However, before the latter program can be eliminated, DEC-24 has to be able to ship large quantities of small orders more efficiently than is now possible. It's sort of a ramping-up process that we're undergoing now."


The other major program for which the Low-End Business Center is responsible is the Order Action Desk. It is designed to help the customer, and has nothing to do with speed of delivery.


"When you're shipping large volumes, it's natural to have some small per­centage of errors," explains Dawn. "Now, we have a way to deal quickly with mistakes in shipment configurations. The customer simply calls the local Digital office, which in turn calls us on DTN 278-HELP.


"The people who answer that 'HELP' line must solve the shipping problems. They have done extremely well so far, and they've only been operating for a month. Cables and software are the two biggest problems we have encoun­tered .


"We log the misshipped items by part type so we can take corrective action. If 90 percent of the short ships are a particular cable, there must be something wrong with our process of getting it there. So the action item will be to fix the process. But, in the meantime, we solve that customer's particular problem."


Win Hindle Talks About Product Demand


(Recently MGMT MEMO interviewed Win Hindle, vice president, Corporate Operations, about the demand for all of Digital's products. His comments are reflected in this article.)


"I think it's important to put into perspective what the customer demand for our products is. It's extremely good in what we call the mainstream of business.


"We've never had a higher order rate for our VAXs or PDP-lls. For example, demand for the VAX-11/780 is about twice what it was several years ago. The personal computer business has not developed as rapidly as our plans indi­cated, but we are optimistic about the next several quarters.


"DECmate II is doing very well, particularly in the office and small-busi­ness marketplace. We are working very hard to stimulate demand for the Professional and Rainbow. Ed Kramer and his task forces are initiating many new programs to accomplish this.


"I should also point out that we've been delivering the bulk of our orders on time. It's just that the number of late deliveries is higher than it has been in the past because of our information systems problems.


"We have a team focusing on order administration. It is co-chaired by Mike Kalagher and Kevin Melia. Mike is responsible for customer administration systems, which means the order processing system as it goes from the cus­tomer through the field office to the manufacturing scheduling system. Kevin manages the system that controls the actual scheduling in Manufac­turing. (See related article on order administration.)


"When we put our fiscal '84 plan into place, we decided how much we would sell and manufacture of each of our products. Our forecast was too low for VAXs and PDP-lls, and it was too high for Professionals and Rainbows. As a result, we're behind on VAXs and MICRO-lls, and we have more Professionals and Rainbows than we have orders. So, we're doing everything we can to balance that load. We've increased our manufacturing build plan in VAXs and 11s in response to customer demand.


"But, once we know that the order rate for — let's say the 780 — is higher than we had predicted, it's not a simple task to suddenly increase the production rate. We need to buy parts and reorganize manufacturing process­es. That's why setting production capacities before the year begins is such an important task.


"We have gone through a time that has given us a lot of bad press; something we're not used to. And yet, I sense employees have a great sense of loyal­ty. Yes, we have some problems, but we are solving them. We are the same company we were two quarters ago.


"I sense most of the Digital family has real faith that we are getting back on track. I sense a willingness to work hard to help make that happen. That's a real bright spot for me.


"It's like being the favorite child in your family for a number of years, and at the age of 26, you go and do something stupid. The family is still right there behind you, helping you to get back on the track again. That's how I feel about the company right now. We've done some things we feel badly about in terms of causing our customers difficulties with information and deliveries. We know what those problems are, and we will solve them.


"We are in a dynamic business, and should be used to the fact that we must always be flexible and capable of changing to meet the needs of our cus­tomers. We have tremendous strength in products and people, and I am very confident in our future."


Support For DECSYSTEM-10/20 Customers. Jack Shields Explains Digital’s Strategy


The decision last spring to curtail development of a high-end DECSYSTEM-20 (the Jupiter Project) led to some confusion regarding the company's support of its DECSYSTEM-10/20 customers. In a recent interview, Jack Shields, vice president, group manager, answered many of the questions that have concerned customers and people in the Field.


"We will provide computing solutions using the full range of Digital's products, from large mainframes through personal computers, by integrating the DECSYSTEM 10/20s into the Digital Information Architecture," explains Jack. "DECSYSTEM 10/20 customers will be able to take advantage of substan­tial future improvements in cost of computing and functionality, while protecting their investments in DECSYSTEM hardware and software.


"We had an architectural incompatibility between the DECSYSTEM-10/20s and our VAX systems. We feel a very strong commitment to customers who use DECSYSTEM-10/20s, but also believe the product offerings and functionality enhancements forthcoming under the VAX architecture will provide better solutions for these customers."


The VAX architecture has benefited from greater engineering investment and from the architectural commonality with the PDP-11 family, which Digital uses in most of its supporting products developed under the network, inter­connect and storage architectures. The result has been more new products and better time to market for VAX products, which traditional DECSYSTEM-10/20 customers can now take advantage of.


"So while we are going to continue to make the current set of products and support DECSYSTEM-10/20 customers, we have an obligation to point out to these customers that when they develop their long-term strategies they should include the VAX architecture, which we believe will provide more powerful computing solutions with greater functionality and at lower prices."


Digital is not suggesting that customers change immediately. There are still lots of applications for which customers will continue to buy and use 10s and 20s. Digital still has a commitment to those customers, and will still make the products, install them and service them. The main thrust of the strategy is to encourage customers to consider the VAX for the new applications they are developing, rather than try to get them to move existing applications.


Networking technology is smoothing the differences between the architec­tures. With Digital's networking and interconnect capabilities, a customer can have communication between the different applications running on the VAX systems and DECSYSTEM-10/20s, and can share data between them.


DECSYSTEM-10/20 customers have two growth alternatives. They can add DECSYSTEM-10/20s for applications where these products best meet their requirements, or they can implement new applications using VAXs and personal computers. Under both alternatives, their hardware and software investments will be protected by tying the DECSYSTEM-10/20s, VAXs and personal computers together into the total Digital network.


"Sales people have to explain and work out the strategy customer by custom­er," says Jack. "Customer emotion has been high since the decision to discontinue the Jupiter project. But there are only a few customers with needs that can't be satisfied by this strategy. For most customers the strategy does meet their needs. Once we have put in the effort to really understand these needs, we have been successful in selling the benefits of the strategy. In many cases we have already sold additional 10/2Qs, VAXs and personal computers to these customers.


"These customers represent a substantial opportunity, both current and longer term, for Digital, and we are committed at all levels of the corpora­tion to do what is necessary to meet these customers' needs and retain them as good Digital customers. We will do a better job, especially within the Field functions, of communicating our progress in implementing this strat­egy.


"For years, the DECSYSTEM-10/20 business was a separate piece of the compa­ny. We want people to understand that we aren't doing away with it. We don't look askance on it. Rather, we believe the time has come to use our networking capabilities to integrate these customers and this architecture with the direction of the rest of the company. We want these customers to be able to take advantage of more and more computing capability being developed on our VAX-type products and to be able to move in that direction, as it's appropriate.


"Digital is committed to building computers based on VAX architecture which will be more powerful than the 2060. And while we have stopped development of a high-end 10/20, we have committed to continue to develop 10/20 product enhancements for a minimum of five years and have dedicated substantial Engineering resources to this effort. We will also continue to support DECSYSTEM-10/20s for a minimum of 10 years.


"All this ongoing commitment implies the need for people dedicated to DECSYSTEM—10/20s in many functions. In fact, the efforts of these people will be more critical than ever to our continued success. We are committed to providing career advancement opportunities for these people, and the extraordinary efforts of many of them are being recognized.


"In other words, we have a special group of people here at Digital who we need and respect, who we want to remain dedicated and committed to 10/20s and to these customers.


"In terms of expertise, some of our best technical systems people have traditionally been dedicated to 10s and 20s. I think their question is, 'am I going to be technically challenged as much by these new VAX systems as I was by the 10s and 20s?' And I would say, yes, absolutely. The complexity of clusters and those kinds of architectures will require a level of exper­tise in a systems sense that is above and beyond what is required today for


Disk Technology Boosts Sales


The Colorado Springs facility recently reached another milestone with delivery of its 25,000th Winchester disk drive, an RA81 purchased by Maher Terminals of Jersey City, N.J. The RM80, the first Winchester disk designed and manufactured by Digital, went into production in June 1980=, The RA81, the latest member of that family, is the highest area density drive avail­able in the industry today.


Maher Terminals is a container shipment company. They service 14 separate steamship line carriers which generate over 230,000 vessel container moves per year or about 1400 to 1800 truck moves per day. Years ago, they devel­oped an online shipment tracking application using MUMPS on a PDP-15. They currently use five PDP-15s and two VAX-ll/780s which support a nationwide communications network of over 300 interactive terminals distributed throughout the major cities in the United States and Canada. This network, in addition to handling the containership facility, tracks the land/sea movement of containers and cargo. Maher is in the process of implementing a VAXcluster based on three 6-megabyte VAX-ll/780s, 15 RA81 disk drives, two HSC50 storage controllers, three CI-780 computer interconnects and a star coupler.


Colorado Springs started manufacturing disks with the RL01 in 1978. (They made their 100,000th RL01/02 last summer.) To accommodate the demand for its new disk drives, the plant was expanded to 715,000 square feet in Oct. 1982. Now, 1800 people are employed there in the research, design, engi­neering and manufacturing of these disk systems for use on Digital comput­ers.


It took three and a half years to produce the first 25,000 Winchester disk drives. With the expanded manufacturing capacity, it should take only one year to make the second 25,000.


P Task Forces Formed


Since taking the management responsibility for all of Digital's personal computers for the balance of this fiscal year, Ed Kramer has developed task forces to deal with all issues related to the successful sales, marketing and delivery of DECmates, Rainbows and Professionals. Using the expertise of the people on the task forces, Ed is pulling together the FY84 and FY85 corporate plans for marketing and shipping PCs.


Ed chairs a PC Task Force, which consists of Joel Schwartz, Angelo Guadagno and Eli Lipcon. Joel, in turn, is head of the PC Marketing Task Force. Angelo chairs the PC Sales Task Force, and Eli Lipcon is chairman of the PC Operations Task Force, which is responsible for day-to-day operations including shipments and deliveries of personal computers. Ed also chairs a PC Engineering/Manufacturing Task Force.


New Corporate Security Director


Ray Humphrey has joined Digital as director of the Corporate Security Department, presently located in West Concord, Massachusetts.


Prior to joining Digital, Ray was manager, Corporate Security, for Xerox, a position he held since 1977. Before that, Ray held various senior-level management and administrative positions with state and federal governments, including service as Director of Industrial Defense for the U.S. and respon­sibility for originating and conducting the "Sky Marshalls" program and the Federal Witness Relocation Program. He was a White House Fellow during the Johnson Administration and was chairman of several committees of national security organizations.


Digital Forms New Systems Research Center In Palo Alto


Digital is forming a new Systems Research Center in Palo Alto, CA, to be headed by Robert W. Taylor. According to Sam Fuller, vice president, Research and Architecture, this new activity "underscores and strengthens the company's long-term commitment to systems and software research, areas which are crucial to the development of innovative computer systems." The facility should be operational within a few months.


Bob joins Digital after 13 years with Xerox at its Palo Alto Research Center. During that time, he organized the Computer Science Research Labora­tory which did pioneering work in personal distributed computing. Throughout his career he has been involved in a number of pioneering computer research programs.


In the 1960s, Bob managed the research programs of the Defense Advanced Research Projects Agency (DARPA), which became well known for its develop­ment of the first timesharing systems and for the global ARPANET network. While at DARPA, he was active in funding the research base of the earliest university graduate programs in computer science.


According to Sam, this new research effort will work closely with related research activities headed by Forest Basket in Los Altos, CA, and with an East Coast research group headed by Linda Wright in Hudson, MA.  privacy statement