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Strategies & Market Trends : ahhaha's ahs -- Ignore unavailable to you. Want to Upgrade?

To: Keith Monahan who wrote (4682)	7/2/2002 9:54:16 PM
From: Lizzie Tudor	Read Replies (1) \| Respond to of 24758

I am not arguing in favor of distributing capital costs over time. In fact, I think it is a terrible idea. Management is not held fully accountable for the spending on large capital projects. Since the P&L impact is deferred, these mega-projects never seem to get the scrutiny they should. Then you end up with big writeoffs for failed projects. How many corporations would be willing to expense a 100mm supply chain project in one year? My guess is none, not due to scrutiny, just the effect of the P&L "impact" (as you say :-) ). The alternative is a lot of little, "spot solutions" to address what are actually large automation challenges. It cost Mike Dell about 90mm to put in the Dell supply chain at a time when his margins were around 4%. In hindsight, it was a pretty good investment. But ask him to take a 90mm hit then, would he have done it, not fully knowing the outcome... I doubt it. Lizzie