See comments Inserted below:
The cost of sales is totally out of hand! Look at the number of corporate offices,
just in the US! More than IBM (not really just seems like it)! An example is the
Miami area, two seperate facilities within miles of one another! Have these
people ever hears the concept of shared resources!
Trimble has relationships with some very resspectable resellers, yet rather than
pass the cost of end-user sales down-stream where they are more cost effective,
they have an out of control sales bueracracy(?). Is anyone aware that the majority
of the Sales Management team is not even formally educated in Sales and
Marketing, they are either brother in law positions or technical people promoted
for longevity?
<< Arun: Any comments?.>>
[skip] If true these are pretty serious allegations!! What are they based on? I doubt their validity. The annual report lists only ten regional locations. That certainly does not seem excessive in that they are serving all 50 states and eleven markets thru four divisions.
This one would make Henry Ford roll over in his grave! A VP of Trimble actually
made a statement "we have found assembling systems one at a time proves more
cost effective"!!! If I were Mr. Trimble and heard that, I would put the guy on the
street!
<< Arun: Remember my Designer Boutique Analogy. It may work for the current
mix of products. But anything that is manufactured in some volume, forget about
it.>>
[skip] This is Unfair. Trimbles OEM boards are manufactured in a completely automated assembly line. This is very high volume three shifts a day very efficient operation. I have seen it. The surveyors are assembled one at a time. The volume isn't high enough to warrant an assembly line.
Take a look at the real estate occupied by Trimble, the most expensive they could
find! Having a maufacturing facility in Sunnyvale CA makes no sense at all,
especially since they have a half used facility in Austin TX, where the costs
would be dramatically lower, everything from wage base to taxes.
>>Arun: Would need to take a big one-time charge to do this. Management may
not have the courage.>>
[skip]Manufacturing occupies a small percentage of the of many buildings Trimble occupies. Trimble has been there a long time probably before it got expensive. There could be some savings by moving to Austin when the leases expire. But it may be difficult to find the talent they need in Austin.
There are far too many variations in the product offerings, one basic product,
$10k range, has at least twelve variations. Anyone with manufacturing experience
realizes that it costs more to manage the variations than can be gained in a
complicated price/stocking/ordering structure.
>>Arun: Need a focus on few products that sell well. Like Iomega did to Zip. US
Robotics did to Sportster.>>
[skip Overly simplistic. The 4800 bundle does attempt to do that. But one solution doesn't solve the universe of applications. GPS is used for so many different applications that it is not simple to reduce to one or two products. That works only in mass market products.
So, fellow investors, it is not a technology problem, sales price, etc... It is 90%
managment problems.
>>Arun: There definitely is a problem in management. I don't know the
percentage. I would say the priority for improvement should be sales,
manufacturing, and development. If moving one manager from US to Europe can
make so much difference in European sales, then they should be hiring new
managers like him. Or fire managers who can't meet their sales targets. If the sales
team can't sell against practically no serious competition, what will they do when
competition increases.>>
[skip] There is always room for improvement. I think as each of Trimble's business lines mature they need to be housed in nine distinctly separate companies. Each serving a billion $ market. They are Land Survey, Mapping, Marine Survey, Agriculture, Construction, Mining, AVL, Aerospace, OEM. Each of there are distinctively different businesses and need their own constituency within Trimble. I hope they are headed in that direction.
|
