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Technology Stocks : DELL Bear Thread
DELL 122.55+4.4%Nov 21 3:59 PM EST
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To: rudedog who wrote (1852)9/5/1998 3:06:00 PM
From: jim kelley  Read Replies (1) of 2578
 
Dog,

Forecasting demand is a huge problem for companies like CPQ which use an outdated batch, build to forecast, manufacturing system.

There can be no doubt that this is the case for CPQ in view of the fact that their profits have been reduced to close to zero by their inability to forecast true demand for their products this year and last year.

To claim that CPQ's manufacturing system is more efficient than DELL's is ludicrous at best. I seriously doubt that CPQ derives any advantage from issuing large batch orders for INTC parts quarterly and then screwing up and reducing the orders abruptly for the next few quarters.

DELL must be seem like a real blessing to the INTC manufacturing people because its gives INTC weekly updates on its inventory requirements. This helps INTC to realistically plan its production and reduces the terrible expenses of starting up and shutting down manufacturing lines abruptly.

So I think your analysis of the DELL JIT value to INTC is full of baloney. I would bet that DELL is highly valued by the INTC manufacturing managers and that this is reflected in reduced component pricing for DELL.

It is curious that you think that DELL should copy CPQ's inefficient
and outdated manufacturing methods. All the while, CPQ is trying to reduce DELL's manufacturing edge by out sourcing its manufacturing to companies like TECD which are being run by former DELL manufacturing executives. If they thought that their manufacturing was the most efficient they would not be outsourcing and trying to copy DELL!

Respectfully yours,

Jim Kelley
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