Compaq Message Board - Msg: 3722348

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Technology Stocks : Compaq

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To: Nicholas who wrote (21977)	3/16/1998 8:18:00 AM
From: Jason W. France	Read Replies (1) of 97611

Nicholas, I will give it a try. first lets define how CPQ builds today (BTF). BUILD TO FORECAST - LOT SIZE = 10000 or 25000 CPQ sets up its lines and just builds 1000's of a single config that it beleives will match up with the orders from its distrubtors and resellers, but builds before an order from anyone is received BUILD TO ORDER - LOT SIZE = ORDER SIZE FROM DISTRIBUTOR Still stabdard configurations but CPQ will vary the lots size to match order size and only start building when an order is recived from the reseller or distributor CONFIGURE TO ORDER - LOT SIZE = ORDER SIZE FROM END USER Here CPQ cuts the the reseller out all togehter and and ships customized configurations directly to end-users (i.e. theior corp customers). This is how Dell does it, and involves CPQ "going direct". Since CPQs 7 largest customers (providing I think 70& of CPQs revenue) in the US are resellers and since they will now be cut out of the deal, I assume that this will not sit very well with them. I wonder if this has anything to do with CPQs lack of progress with ODM.... IBM seems to be making good progress with its channel assemble plans.... things that make you say hmmmmmmmmmmmm Hope this helps Jason

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