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Volume 6, #6                                                              August, 1987


The Role Of The Semiconductor Task Force by Bob Palmer, vice president and group manager, Semiconductor Operations


LDP's Computer Integrated Research Strategy & The Cray Agreement by Gary Eichhorn, manager, LDP/Science Marketing


Digital's Energy Situation by Jim Rogers, corporate manager, Energy and Environmental Affairs


Tops In Quality


Bob Palmer & Dom Lacava Take On New Responsibilities




Management Training Begins For Job Evaluation And Classification Project


Year-Round Salary Management Tool

The Role Of The Semiconductor Task Force by Bob Palmer, vice president and group manager, Semiconductor Operations


In January, a Semiconductor Task Force was formed to examine issues related to sources of supply for semiconductors and investments in related technol­ogy. Created by a joint action of Jack Smith and Win Hindle, and chaired by me, it includes representatives from the systems engineering groups that are users of semiconductors. It serves as a forum to discuss and develop strate­gies to ensure that Digital has sufficient supplies of critical parts and that the technologies used to design future generations of Digital computers provide significant competitive advantage.


Through this task force, we are able to look at issues from a variety of viewpoints and develop plans that make sense for the company as a whole. When we arrive at consensus on an issue, we elevate it to Jack Smith's staff, and then to the Executive Committee.


Current issues revolve around our sources of supply. Semiconductor Opera­tions has been very successful in meeting the company's semiconductor needs despite increases in demand that were not forecasted. We have done so through utilization of our manufacturing capabilities in Hudson, Mass., and through our excellent relationship with the vendor community. So even though demand last year was more than 30% above budget, we were able to meet it without spending more money on items other than material than was in the plan. But we have to be prepared to deal with future contingencies.


We are having on-going discussions about which semiconductor technologies we should build internally. If a technology is generally available from a multitude of merchant companies, then we are not concerned about having that capability internally. If on the other hand, the sources of supply are dwindling and we have systems that would be dependent on one or two sup­pliers that also compete with us for systems business, then we may need to develop an internal source of supply.


In the past, the goal was to concentrate our semiconductor manufacturing resources on a few technologies. Today, though, the company is significantly larger, and the semiconductor industry has gone through significant down­sizing and consolidation. The availability of critical components is chang­ing in the marketplace. So there is a lot of discussion about which other technologies we should be investing in and in what manner. It is important that these issues get a full hearing, with inputs from all the groups affected.


We also want to develop global sourcing. In other words, we would prefer to buy components from those parts of the world where we sell. Thus we want to develop appropriate sources for supply from the European semiconductor industry.


International trade is also of critical interest to us, because of the threat of interruption of supply of critical parts and the reality of increased costs. We look carefully at proposed government actions and, through Government Relations, (managed by Bruce Holbein, a task force member) explain to government officials how their policies could affect both producers and users of semiconductors, so that they do not inadvertently harm our business. For example, as originally drafted, the recent trade sanctions imposed against Japan by the U.S. would have directly impacted us. We identified language in the sanctions that needed to be changed, and Government Relations was able to call attention to the impact of the pro­posed sanctions and thereby affect a change in the proposal so as to avoid having the sanctions applied to critical components and test equipment that the company imports.


We are attempting to have the same impact with regard to proposed sanctions against Toshiba. In retaliation for Toshiba having sold sensitive technology to the Soviet Union, Toshiba products might be embargoed from the U.S. If so, that could have a significant impact on users of Toshiba products, of which Digital is one. We are seeking language in the legislation that would exempt, from the embargo, components that are essential to U.S. computer products. Once again, Government Relations is helping clarify ambiguities in the language, so the legislation will not cause unintended damage to our business.


Another point of discussion is the possibility of Digital's participation in Sematech, a proposed consortium of U.S. semiconductor manufacturers and users, semiconductor equipment manufacturers and government agencies. The goal of this consortium is to develop tools and technology related to advanced semiconductor manufacturing in order to restore the competitiveness of the U.S. semiconductor industry. It would identify areas of commonality and drive specifications for semiconductor manufacturing equipment, help set standards and pool technical resources to work on major problems in advanced semiconductor manufacturing. Its end product would be the processes necess­ary to manufacture the most complex memory and logic circuits. In effect, that would mean that manufacturing know-how would no longer be as signi­ficant a competitive advantage among U.S. semiconductor companies. The competitive advantage would move to a higher level — primarily in circuit and system design, an area where Digital has a significant advantage.


LDP's Computer Integrated Research Strategy & The Cray Agreement by Gary Eichhorn, manager, LDP/Science Marketing


Digital's new Computer Integrated Research (CIR) strategy and the recent announcement of the VAX Supercomputer Gateway with Cray Research, Inc., provide research customers with integrated solutions — from the lab bench to the supercomputer.


Our goal is to help the enterprise manage its most valuable asset -- re­search information — efficiently and economically to gain a competitive edge in the market. The CIR strategy combines Digital's standard products with hardware and software solutions to meet the unique computing needs of the research environment. It allows customers to integrate their research activities and then share the results of these activities with the rest of the organization.


Today's laboratory and research computing market is a $7 billion business, and growing at 20% yearly, according to various market studies. To build on Digital's 30 plus years of leadership in this important market, LDP works closely with scientists to understand their computing requirements. In conjunction with engineering, marketing partners, and OEMs, we develop strategies and bring to market products that address the changing computing requirements of laboratories and research organizations.


The VAX Supercomputer Gateway, which can function as part of a VAXcluster, is an example of a product that works within the CIR framework. The gateway was recently announced by Laboratory Data Products (LDP) in cooperation with the Engineering Systems Group (ESG), High Performance Systems (HPS), U.S. Programs and Cray Research. The VAX Supercomputer Gateway offers scientists and engineers working at any Digital workstation on a DECnet network trans­parent access to supercomputers and greatly improved performance. Coopera- • tively developed by Digital and Cray Research, a leading supplier of super­computing systems, the VAX Supercomputer Gateway provides a direct connec­tion between VAX and Cray systems.


Supercomputer power is essential for processing highly complex mathematical models and simulations for research and engineering markets. The largest Cray supercomputers can process more than one billion floating-point in­structions per second, which is an enormous computing capability. They are used in research applications such as simulation, computational, fluid dynamics, and molecular modeling. In the engineering market, for example, customers involved in oil exploration and production draw on increasingly complex modeling tools to characterize reservoirs and define drilling locations. VAX systems used as front ends to the Cray offer customers the power of supercomputers and the interactive computing and program develop­ment capability of VMS software.


The average cost of a Cray system is $15 million. For every dollar spent on the supercomputer itself, another dollar will be spent on associated com­ponents — front-ends, workstations, storage, peripherals, and networks. Of the approximately 150 customers worldwide using Cray supercomputers, about half of those already have VAX systems installed as front ends.


Development of the VAX Supercomputer Gateway helps us capitalize on our networks and our compatible architecture to give scientists and researchers the ability to do their computing jobs where they need them done in the most effective way, and to give them access to the computing power of the rest of the organization. The VAX Supercomputer Gateway is based on VAXBI technol­ogy and enables up to five times faster data throughput between VAX and Cray systems over existing connections. These connections include HYPERCHANNEL from Network Systems Corporation and FEI from Cray Research.


Linking workstations, departmental computers, VAXclusters, and networks to Cray supercomputers makes integration from the bench top to the super­computer -- the heart of the CIR strategy — a reality today and a commit­ment for tomorrow.


Digital's Energy Situation by Jim Rogers, corporate manager, Energy and Environmental Affairs


Digital facilities worldwide are doing an excellent job keeping energy consumption and cost increases to a minimum with a total 1986 energy bill of about $107 million or 1.4% of revenues. Electricity represents 90% of that bill.


Although costs are important, we have to provide for our increasing energy needs, particularly for computer equipment, and our main concern is for the reliability of electricity supplies. Reduced reserves of generated elec­tricity and distribution bottlenecks have reduced the quality and reliabil­ity of power to several Digital locations in New England and elsewhere. Contingency plans are in place to deal with supply problems that could affect our operations, and more facilities are installing back-up power and uninterruptable power systems for critical processes and operations. This trend will continue, and some facilities may install co-generation systems in order to improve the reliability of their power.


Overall, our electricity consumption is about one third for lighting, one third for cooling, and one third for computer equipment and manufacturing processes. We get heat from our lights, equipment, and people. We expend a lot of energy cooling, but very little heating. In most of our buildings in the North, we don't have to heat until the outside temperature gets quite low. The only exceptions are a few buildings that need heat for process and associated ventilation systems.


Because we do very little heating and a lot of cooling in most of our facilities, it turns out that our facilities in the North actually use less energy than our facilities in the South, where we have to cool much more. During the winters in the North, we can take advantage of "free cooling" for our computer rooms and processing equipment -- using outside air or chilling water in a cooling tower and running it through a heat exchanger system.


Not only are more people using computer equipment throughout the company, but as our computers get more powerful and smaller, more computers can fit into less space. That means that a computer room today holds more equipment


In addition, many people have the mistaken impression that it is better for computer equipment to be left on at night and over the weekend, rather than turning it off and on. That might have been wise 15 years ago when electri­city cost a fraction what it does now, and when some electronic equipment contained vacuum tubes. But today it just means higher electricity usage and cost.


Digital facilities continue to implement cost effective opportunities for reducing energy consumption and costs. Many, especially those in manufactur­ing, have had aggressive programs to improve energy efficiency and reduce waste when it can be identified. Forty-six Digital facilities presently have energy management systems. Many facilities have installed "free cooling" systems, variable speed motor drives and new lighting systems that provide a higher quality light while using less power.


In the last year, we initiated an Energy Investment Program whereby plants that have identified energy saving projects can submit them directly to our office. We can facilitate funding, as long as payback is within two years. This program, which started in Manufacturing, is being expanded to other parts of the company.


Tops In Quality


The premier issue of The Quality Review, published by the American Society for Quality Control (ASQC), chose Digital as one of the ten best companies in terms of "quality of products and services." Digital was the only computer company to make the list.


The magazine explained its selection process as follows: "To produce its 1987 feature on "America's Most Admired Corporations," Fortune surveyed 8,200 senior executives, outside directors, and financial analysts for their opinions on what are the nation's best, and worst, companies. They then allowed us to noodle their raw data to come up with the ten highest-ranking companies in the category of 'quality of products and services.' The top ten, listed in order, are: Dow Jones & Company, Inc.; Merck & Co., Inc.; The Boeing Company; The New York Times Company; Rubbermaid Inc.; Caterpil­lar, Inc.; Digital Equipment Corporation; The Procter & Gamble Company; and, tied for ninth place, Anheuser-Busch Companies, Inc., and The Coca-Cola Company."


ASQC is the international professional organization for quality and quality- related technology. It has 53,000 individual and corporate members in the U.S. and 61 other countries.


Bob Palmer & Dom Lacava Take On New Responsibilities


Jack Smith, senior vice president, announced several organizational changes, effective June 15. Bob Palmer, vice president, Semiconductor Operations, and Dorn LaCava, manager, Micro Systems Development (MSD), now report directly to Jack, as members of the Manufacturing/Engineering/Product Marketing Staff. In addition to MSD, the following organizations now report to Dorn: Terminals Business Unit (managed by Larry Cabrinety), Worksystems Group (Steve Teich- er), Personal Computer Systems Group (John Rose), Process Development Engineering (Bill Picott), Personnel (Les Koch), Finance (Lyn Benton, acting). Applications (Ron Ham) and Planning (Sharon Wulf, acting).


Bob Palmer joined Digital in 1985. His responsibilities include semi-con­ductor engineering, manufacturing, acquisition and test marketing. He was one of the original founders of Mostek Corp, and last served as executive vice president of Semiconductor Operations for United Technologies Corp., which acquired Mostek in 1980.


Dorn LaCava, a 10-year veteran at Digital, has held several senior-level hardware and software engineering positions. Since 1984, he has managed the creation of the highly successful MicroVAX family and led the dramatic turnaround in the PDP-11 business.


Bob and Dorn are taking over responsibilities which were previously handled by Jeff Kalb, vice president, Low-End Systems and Technology, who has left Digital.




Rob Ayres has been appointed Corporate Operations Personnel manager, re­porting to Win Hindle, senior vice president; Jim Osterhoff, vice president, Finance; and John Sims, vice president, Strategic Resources. Rob will be responsible for providing personnel leadership to the corporate operations organizations (Corporate Finance, Administration, DIS, Legal, Corporate Planning, Purchasing, Marketing Communications, and Public Relations). In addition, he will be a member of the Personnel Management Committee (PMC). Rob has been with Digital for 17 years, most recently as Group Compensation and Benefits manager for Manufacturing/Engineering/Marketing.


John Barrett has been named European Field Service manager, reporting to Dave Grainger, vice president, Field Service, and Pier Carlo Falotti, president, Digital Europe. John was most recently UK Services Director and a member of the UK Board of Directors. Having joined Digital in 1966 as senior computer technician in his native Scotland, John then progressed to Scottish Branch Field Service manager, Field Service District manager in Manchester, England, and in 1977 was appointed Field Service manager for the then North Europe Region, which included the UK, Ireland and the Scandinavian coun­tries .


Jon Caputo has been named director of Corporate Program Management, report­ing to Don Busiek, vice president, Software Services, Computer Special Systems, Educational Services. In this newly created position, Jon will provide program management focus to enhance Digital's ability to manage large customer projects and programs worldwide. Jon is a 15-year veteran of Digital. His most recent assignment was as U.S. Sales Support manager. He was the Western Regional SWS manager and the New York District Sales mana­ger, and also won the Baton award in FY83.


Marty Ford, who has been the European Finance and Administration manager since 1983, is returning to the United States this summer to work on several corporate finance activities, reporting to Jim Osterhoff, vice president, Finance. Prior to his European assignment, Marty was U.S. Area F&A manager.


Bob Gregorio has been named Corporate Employment manager, reporting to Carol Burke, manager, Corporate Personnel. In this position, Bob will be responsi­ble for setting employment directions and strategies to insure that they meet Digital's present and future business needs and plans. Bob previously was with Field Personnel where he has held several positions over the last 12 years, most recently as U.S. Operations Human Resource manager.


Daniel Latham has been appointed director, Telecommunications and Utilities Industry Marketing, reporting to Bob Hughes, vice president, Service Indus­try Marketing. In this position Dan will have strategic marketing responsi­bility for the Telecommunications Industry, managed by John Hart, and the Utilities Industry, managed by Brian Premru. Dan brings with him 12 years of experience in the industry. He joins Digital from Ameritech Communications, where his last position was vice president of Service Operations, and prior to that as vice president of Marketing and Operations.


Laurie Margolies has been appointed Corporate Employee Relations Programs manager, reporting to Erline Belton-Willis, manager, Corporate Employee Relations. In this position, Laurie will provide functional leadership for company-wide Employee Relations programs that support policy and ER strat­egy. Laurie has been with Digital for the past seven years. She was most recently Human Resource Planning and Development manager for GIA Manufac­turing and Engineering.


Earl Mason, Manufacturing Finance Controller, will become European Finance manager, reporting to Pier Carlo Falotti, president, Digital Europe, and Dick Fishburn, manager, Finance, Sales and Services. In this position Earl will function as senior finance officer to Digital's operations in Europe. He will continue to be a member of the Corporate Finance staff. Prior to joining Digital in 1985, Earl held various senior level financial, operating and marketing positions at AT&T.


Dave Oran has been promoted to senior consulting engineer, reporting to Tony Lauck, corporate consulting engineer in the Distributed Systems Architecture group. Since joining the group in 1979, he has been responsible for the DNA Session layer, Digital's technical strategy for IBM SNA interconnection and the initial SNA gateway architecture. He has been a principal contributor to the Onen Svstems standards strateav and was the original architect for the


Joe Ricevuto has joined General Services Industry Marketing, reporting to Peter Robohm, director, General Services Industry Marketing. Joe will be Industry Marketing manager for the Wholesale, Retail and Distribution Industries. He comes to Digital from AT&T, where he spent nine years, most recently as manager, Computer Systems International.


Victor Vyssotsky has joined Digital as the director of Digital's research laboratory, which is being established in Cambridge, Mass. He reports to Sam Fuller, vice president, Corporate Research and Architecture. Victor comes to Digital from AT&T Bell Laboratories, Murray Hill, N.J., where he was the executive director of the Information Sciences Division, responsible for research in computing, robotics, mathematics, statistics, speech processing and related topics. Victor also was associated with the development of computing hardware and software for the Safeguard missile defense system. In addition, he worked on computer systems which automate various business procedures of telephone companies, including engineering systems, design systems, inventory and logistics systems, real-time monitoring, and control systems.


Management Training Begins For Job Evaluation And Classification Project


As part of the Job Evaluation and Classification (JEC) Project, a nationwide training effort will begin in October to equip all managers with the skills needed to start classifying their Wage Class 4 employees in Q2, FY88.


To date, several hundred managers and employees have participated in the project by identifying benchmark work, detailing the components of that work through the completion of questionnaires, and ranking the benchmark jobs using five work factors selected as most representative of the major compon­ents of Wage Class 4 work at Digital. The five factors selected at the outset of the JEC project are: participation in decision-making; impact on financial results; management or influence of people; problem-solving and complexity of the work; and qualifications for the job.


"As we begin to classify employees using this new system, it is clear that managers will play a critical role in the successful implementation of the project, and in the long-term success of the system," says Kathy Robbins, JEC Implementation manager.


The kickoff for implementation of employee classification will be a series of training sessions which will begin in early October. The first audience will be Personnel and line managers responsible for training the rest of Digital management. The training includes an overview of the JEC Project and specific Digital strategies. In addition, the training will cover: how to administer the Job Profile Questionnaire (JPQ); information on both job evaluation and employee classification; expectations of Personnel and line management in completing the project; expected questions with an opportunity to review appropriate answers; an explanation of the key systems, job descriptions, and tools which will be used to implement JEC; some sugges­tions for helping organizations to manage the changes which will result from the implementation of JEC; and an opportunity to interact with many key project team members in an informal panel discussion.


All Personnel professionals, PA/PSAs, and line managers will receive a reference guide to help them successfully classify Wage Class 4 employees. The binder will include slides to help them make presentations to employees, and a videotape will be available at all sites to help inform employees about JEC.


Implementation itself will begin in October with a representative sampling of both benchmark and non-benchmark work in selected organizations through­out the U.S. After the successful completion of the classification of this sample of employees, classification will be completed in the rest of the country.


"Managers have the primary responsibility to ensure that they and their employees are well-informed and that employee concerns and questions are addressed as the implementation process gets under way," says John Sims, vice president, Strategic Resources.


Tools, reference materials and resources will be available to help ensure a smooth transition to the new system. Managers will be notified when train­ing sessions in their area are scheduled.


Year-Round Salary Management Tool


With the August release of SMS version 3, the Salary Management System will become a year-round salary management tool. Reports generated by the system will help supervisors and managers understand and manage the dynamics of delivering salary increases throughout the pay program year.


In addition to the features previously available on the system, these reports allow managers to measure actual increases against salary plans and assess how deviations from plan affect overall business objectives. Because this information will be available all year, managers will have time to respond by adjusting remaining salary plans if necessary, through PAWS (Personnel Administration Workstation) before the end of the current pay program year.


Specifically, with SMS V.3, supervisors can produce reports that:

o track actual salary increases against planned increases,

o measure performance against plan for pay program metrics -- promotion, frequency of increase and participation rates,

o list information about employees whose pay increases vary from plan, and o remind supervisors when employees' reviews are scheduled.


By helping supervisors manage spending, promotion, frequency of increase and participation rates year-round, SMS V.3 enhances the company's ability to meet its basic pay objectives: competitive pay, pay for performance and pay equity.


Using SMS V.3 during salary planning, supervisors can test on-line how various individual salary plans affect a group's total spend plan. SMS V.3 also retains the usual pre-planning tools that project performance ratings, rank order employees by performance and align them by range position. And salary plan roll-ups will continue to provide a tool for salary plan summary and analysis.


Supervisors and managers will receive more information on year-round SMS from their local Personnel organizations.  privacy statement