Does anybody know what might be a good source to measure SUNW's "stated" backlog on a weekly basis? I have heard that orders are now quoted for delivery in 5-7 weeks. Just four month's ago, the same type of order was quoted for delivery in 2-4 weeks.
It might be a good leading indicator of business if we were able to follow this "delivery" number. To me it signals (1) how fast SUNW is able to work off backlog orders as they increase their manufacturing capacity and (2) if order demand begins to level off.
Remember, SUNW is increasing their manufacturing capacity in Europe through their Ireland plant expansion and through their U.S. operations by configuring new machines at their Fremont facilities rather than onsite at the customer's location.
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My Observation on the Company:
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IMO, one of management's goals is how they can keep up with the 35%-40% growth, continue to maintain product quality, increase the number of units shipped, and increase production efficiencies (and balance order flow) in their component procurement (BtoB procurement combined with JIT "Just In Time" delivery), manufacturing and assembly, and customer installation.
I believe it will be these "efficiencies" to watch and exactly how SUNW implements these new programs as to how they will eventually manage this 35%-40% growth.
It's almost like where DELL computer was when they implemented their "build-to-order" business model. Wall Street rewarded Dell for implementing this new concept and we eventually saw many other companies copy this model.
Sunw has the opportunity to do this with a "Build-a-dot.com" business model which uses all the previous experience in manufacturing that is necessary to assemble a build-to-order computer but expands the over all deliverable package to include a working dot.com system. This would include, added customer service, software and storage solutions, IS training, maintenance contracts, consult the customer in designing and building a quality IS operation environment all combined to produce a deliverable DOT.COM solution for the customer.
Sunw can benefit in two areas (1) product hardware sales and (2) ongoing customer support and consulting. It's the latter area that produces reoccurring cash flows and allows the company to keep the pulse of the customer. If Sunw can provide an upgrade path for the first time customer and deliver this "Build-a-dot.com" commitment to the customer, there are many reoccurring sales out in the future that Sunw has a lock on.
EKS |
