Conference 7.286::digital

    I won't tolerate such a long wait.  If I order something, I expect it
    sent then or within a day or 2.  If not, I go to another vendor.  How
    do we expect to keep customers, let alone get new customers.
    
    Jim Morton

 This situation has been going on for at least 8 quarters.  We simply
 have made too many changes to our business for our manufacturing and
 distribution organization to catch up with.  We have sold plants and 
 then attempted to have them source product to us in a timely fashion.

 If you really want to send the message send an e-mail to Charles Goslee
 Vice-President Worldwide Manufacturing and Distribution or Rich Powers
 Vice-President Systems Business Unit Manufacturing.  They are trying
 very hard to improve this situation but this problem out of all our
 challenges will continue to stymie our road to success and a swift 
 turnaround.

 Mav

    Why tell the folks at the TOP.  If those at the top don't know it, then
    they don't deserve to be at the top.  If they do know it, and don't fix
    it, they don't deserve to be at the top.
      If we sell it and a customer wants it, we better be ready to deliver. 
    If not, another vendor will be more than happy to step in.
    
    Jim

    I was beginning to wonder if I was the only individual at Digital that
    had a delivery problem!  Besides the issue of long leadtimes on
    virtually everything we sell, we also appear to be obsoleting product
    when demand is still high (e.g. RZ28, certain versions of the HSZ40). 
    And try to work with cabinets and other products that are sourced by
    CSS!
    
    I do not have any answers to this dilemma since I do not have the view
    of the problem in a broad sense.  I would like to reinforce for anyone
    that may be reading these notes, who is in a position to do something
    or even care about the issue, that many, many, many cycles are being
    expended by salespeople in the field in chasing deliveries and
    placating customers.  If this problem is not fixed we risk tremendous
    customer dissatisfaction, which will not help us make the (in some
    cases) budget increases of 100% over FY95, which is a topic for another
    Notes conference.

    Hey, if the RZ28 is obsolete - can I have them please :-)))
    
    Alan

Methinks the issue may have to do with the fact that end-users may NEED a 
"vendor" other than Digital/DEC. Most of our [major] "business partners" 
inventory sufficient quantities of commodity storage/peripherals, systems, 
memory, etc to meet short-term delivery needs. Digital/DEC is the 
manufacturer and service provider, right? Isn't that what we are measured 
upon? Regardless of channel? Regardless of whether the client wishes to 
buy from us directly or not? In volumes of $Millions/year? Well?

And, does Digital really understand that we're giving away 10 - 15% margin 
every time we do this to our feet :-) ?

SteveS, ABU Sales

On vacation...but I can't keep away from this place!

    The lead times for network equipment are also ridiculous.  For
    example:
    
    Quote Dated:  18-Aug-1995
    
    (1)	DEX2R-DA	
        Routeabout EW Access MP Router		75 day shipment
    
    (1) DEWB2-DA
        DECbrouter 90T2A			25 day shipment
    
    (1) DSRVZ-MC
        DECserver 900TM Access Server		20 day shipment
    
    (1) DEHUA-CA
        DEChub One				35 day shipment
    
    
    (1) DMHUB-AA
        DECHUB 900 Multiswitch			30 day shipment
    
    
    The worst part is that I am hearing that even if you get a ship
    date which is 30-45 days out, don't trust it!   Even those who 
    are on "priority" lists for equipment which are part of large programs
    are saying this. I have had to resort to begging and borrowing
    equipment to handle some customer situations where they would've gone
    elsewhere.  (This is after I had called both Wylie and Avnet only
    to find out that their shelves are bare and they have backorders
    with DEC which are not arriving on time.)
    
    As a stockholder I would love to know what our problem is here and
    what steps are being taken to address it.
    
    Elizabeth
    

    I too am experiencing long leadtimes which are causing unhappy
    Customers.  Storage products are particularly difficult to get in any
    timely manner.  We can't expedite Colorado...  I thought we were
    shipping to our business partners, but it sounds like they're in the
    same boat we're in.  Add to that our shortages of products from our
    suppliers.  I've heard we're sole sourced for some products and do not
    have remedies/penalties written into our contracts for missed/late
    deliveries.  We have lots of things broken in this space and the fixes
    will not happen over night.  I'm sure something is being done, but wish
    we knew what and when to expect recovery.
    
    We have some unique equipment (ie:Alpha), but most stuff is not much
    different than stuff a Customer can purchase from one of our
    competitors.  What's our difference?  It's not our ability to deliver
    quickly.  And it's not many other things.  All companies have problems,
    it's how we respond that makes the difference.  How are we responding?
    What are we doing that's going to make Customers want to do business
    with us?  People buy from People.  But sometimes we need a little help
    from our manufacturing, purchasing, MCS... friends.
    
    Sue
    

	I work in the Networks Mfg group and want to address the
	products listed in .7.  First, and in general, the Networks
	Business is moving the leadtime for all products to 10 - 20
	days for two reasons.  The first is to encourage our distributors
	to order large quantities (rather than waiting until the shelves
	are empty and then ordering only a few line items/small quantities
	at a time).  The second, and related, is to encourage customers
	to use distributors for stand-alone networks products.    


>    (1)	DEX2R-DA	
>       Routeabout EW Access MP Router		75 day shipment

	This is a new product.  BABT (British . . . Telephone) approval
	is required before shipments can occur; expect it to take
	place within a month.  After that and after initial demand is
	satisfied, we expect leadtimes to come down to the above goal.
    
>    (1) DEWB2-DA
>       DECbrouter 90T2A			25 day shipment
    
	The expected demand for Q1 was 290.  We have actual demand for 
	over 250.  On 18 August (the date of the quote), 25 days puts 
	delivery just before the end of the quarter (next available 
	delivery from the manufacturer).

>    (1) DSRVZ-MC
>        DECserver 900TM Access Server		20 day shipment
    
	10 - 20 days is typical, planned leadtime.

>    (1) DEHUA-CA
>        DEChub One				35 day shipment
    
	The manufacturer is currently in backlog on this product.  We
	expect to be back to normal leadtime in the next two weeks.

    
>    (1) DMHUB-AA
>        DECHUB 900 Multiswitch			30 day shipment
    
	The expected Q1 demand for this product was 2,100.  Current
	actual demand is 2,224; we are no longer booking product in
	Q1.  There is a potential that we will be able to fill more
	than the current demand, in which case orders booked in Q2
	will be "pulled in" if the customer approves.

    
>    The worst part is that I am hearing that even if you get a ship
>    date which is 30-45 days out, don't trust it!   Even those who 
>    are on "priority" lists for equipment which are part of large programs
>    are saying this. I have had to resort to begging and borrowing
>    equipment to handle some customer situations where they would've gone
>    elsewhere.  (This is after I had called both Wylie and Avnet only
>    to find out that their shelves are bare and they have backorders
>    with DEC which are not arriving on time.)

	We are experiencing problems with supplier delivery (both at
	the component level and manufactured part).  The magnitude
	of the problem may have contributed to missed deliveries with
	long leadtime.
    
>    As a stockholder I would love to know what our problem is here and
>    what steps are being taken to address it.
    
	We are actively working with all suppliers and believe we have
	turned the corner on the overall supply issue.  We are also
	putting selective second source capabilities in place to 
	reduce the potential of reoccurrence on critical products in
	the future.

	If anyone has specific questions or concerns about Network
	product availability, please feel free to contact me
	directly.


	David

    re. -1
      By moving out leadtimes in an effort to encourage larger orders,
    arent you actually trying to shift the inventory burden to the channel.
    And given that, might that possibly cause distributors to push other
    competing products that do not require long leadtimes, and lessen
    inventory carrying costs?  I also dont quite follow the logic that longer 
    leadtimes would push customers from buying direct to buying from 
    distributors. As an external customer, I might assume that if I cant get 
    it directly from Digital in a timely manner, than why sould I be able to 
    get the same product more quickly from a reseller. Again, I might just go 
    to a competing company who will either ship direct or offer lower leadtimes.
    

    Wouldn't you know it.  As soon as I post a note saying it's almost
    impossible to pull in storage shipments out of Colorado, they pull in
    two orders at my request.  So, things might be changing???  I hope so.
    At least two Customers are happy today.
    Sue
    

    re: .10
    
>      By moving out leadtimes in an effort to encourage larger orders,
>    arent you actually trying to shift the inventory burden to the channel.

	Yes.  And distributors get a significant discount to manage the
	sales and inventory.

>    And given that, might that possibly cause distributors to push other
>    competing products that do not require long leadtimes, and lessen
>    inventory carrying costs?  

	10 - 20 days is a competitive leadtime for distributors for this
	type of product.  This is not a disadvantage for Digital.

>    I also dont quite follow the logic that longer 
>    leadtimes would push customers from buying direct to buying from 
>    distributors. As an external customer, I might assume that if I cant get 
>    it directly from Digital in a timely manner, than why sould I be able to 
>    get the same product more quickly from a reseller. 

	Resellers stock the product for immediate delivery.

>    Again, I might just go 
>    to a competing company who will either ship direct or offer lower 
>    leadtimes.
    
	The distributor agreement provides a percentage of sales back to
	each distributor for advertisement and marketing.  As the distributor/
	channel strategy matures, more and more customers should become
	aware that the distributors can deliver faster than Digital.  Also 
	the Digital order desk is supposed to be providing this information 
	when customers call and need immediate delivery.

	David

    
    	David -
    
    	This maybe well and good for customers that order ones/twoes. But
    my guys do 100s of Alphas at a whack, custom configured, and supported.
    
    	Give this business to distributors, and none of us will have a
    job.
    
    		the Greyhawk

    Greyhawk,
    
    This is the model for the Networks business and only for those
    customers that are buying stand-alone Network gear (e.g. PC adapters,
    stand-alone concentrators, etc.)
    
    I agree that your customers need (and deserve) direct Digital sales 
    help and support.
    
    David
    

    Well when I was a happy DEC end user, I bought from distributors rather
    than directly from DEC precisely because they had stock and could ship.
    After a while they even shipped on the strength of a phone call with a
    confirmation order to follow (as soon as I'd driven my internal
    purchasing process). Digital's business procedures didn't and don't let
    that kind of thing happen, as far as I can see. Probably rightly so.
    
    The networks model sounds OK in principle; there's a lot down there in
    the details, but as explained so far it makes sense to me.

    This string points out clearly the face of the future for Digital and
    also exposes the painful transition that so many of us and our
    customers are having trouble with. Except for complex, configured
    systems, the business model that is unfolding is a relatively simple
    "we make it , but let someone else sell it" channels model. 
    
    The realities of the commodity marketplace and our high direct sales
    overhead make this all but inevitable. The problem seems to be one of
    transition for both our customers and our own sales force (of which I
    count myself a member), who have not yet come to grips wit the fact
    that Digital is no longer in a position to claim to be a full-line
    direct sales vendor. Actually, no other company, including IBM, is able
    to make that claim either, but it's painful to admit - to ourselves or to
    our customers. Customer buying patterns have forced much of this on us,
    so it should not come as all that big of a surprise to them either. At
    least we still make (or sell with our label on it) a reasonably broad
    line. 
    
    Sometimes its easy to feel like a Speigel or Sears and pine away
    for the good old days, but those days are gone forever. Better to spend
    the time figuring out how to keep the brand alive, so that no matter
    where the customer has to go to get it, at least he/she asks for a
    Digital (or DEC) product. This is similar to the solution sale these
    days. No longer do we really have the ability to sell a big project
    solution, (we have solution partners for that - SAP, Baan, PeopleSoft)
    our job is to sell Digital to the solution provider and the customer as
    the best platform upon which to do the project. A different kind of
    sale, but a sale none-the-less.
    
    This all leaves a few of us old solution sales types (Greyhawk included) 
    feeling a bit like dinosaurs, but I suspect the really good ones will
    adapt and prosper and the rest will wallow in the tar pit of dispair
    until they become history.
    
    -OFWAMI-