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Technology Stocks : Compaq -- Ignore unavailable to you. Want to Upgrade?

To: John Biddle who wrote (16252)	2/2/1998 9:02:00 PM
From: Loki	Read Replies (1) \| Respond to of 97611

John... The benefit derived from selling a division, losses carried forward (2-3bil?), or cash are no recurring, but do benefit. On going benefits as you mentioned have these questions from me. Do you mean expertise or actual facilities? Expertise - teaching efficiency is a process that takes time. Acceptance and trust from the recepient is vital. Do CPQ and DEC have common vendors? Can economies of scale be introduced? TQM philosophies similar? How adverse or similar are the present manufacturing processes or systems. To take advantage of this is requires a positive transition. (see my posts Jan 31) Actual facility - I would consider the critical mass in production versus regional distribution. (I do not know this for CPQ/DEC) Sometimes it is more efficient to just manufacture in one facility. CPQ would want to have the DEC mfg increase their average cost. One had better buy more than the 140 mil annual profit for 9.6 bil. You are absolutely correct. The DEC brand name is an intangible asset... very much outside the US. "Sell direct without channel conflict" 1. Who is promoting the products CPQ/DEC? 2. To which customer base? How will this be implemented? Does the sum of CPQ and DEC equal each individually? Since I am just learning about CPQ and DEC I must answer you with questions that I would ask, understanding some of the general concerns. I believe others on the thread will have responses to fill in the blanks and let us evaluate. Loki

To: John Biddle who wrote (16252)	2/2/1998 9:28:00 PM
From: hpeace	Read Replies (1) \| Respond to of 97611

cpq will not quickly do anything in this DEC deal. it will be expertly planned. cpq needs some of the dec mfg'ing plants...it remains to be seen about the dec pc.... cpq can make the dec pc cheaper...but when you think about it.. who wants a dec pc... If I was a CIO then i would be happy to buy cpq pcs and dec clusters and i would pay the dec staff the usual 1000-1500 per day. that's would they all charge now.. sometimes I get a longer contract for 600 a day..but the going rate is a grand to 1.5 grand a day. cpq will be raking that in now. dec is a SAP implemented plant and has ELM. there TQM is similar but they are poor on JIT. JIT is the cycle and cost reduction part. dec's mfg'ing prowess is weak too. that's why their mfg'ing footprint is stupid. I toured a DEC warehouse once....I almost threw-up. They stilled mailed tapes to home office to update inventory. It was 1988 and I couldn't beleive that they mailed a tape to HQ to update records. I've given many DEC exec's tours of cpq for yrs. Many of the dec plants were on the same MRPII that cpq started with in 1983..cpq has that system almost phased out now for SAP. I have the research on DEC I/S group at work. I'll look at it Tuesday. But, the issue is DEC has too many people and too many plants. CPq will do something about it but they need much of the DEC mfg'ing capacity..they will not kill it all. Here are the terms again.....I've given this paper in speech form to many of the DEC executives. At least 100 of the DEC'ers in their manufacturing group.

To: John Biddle who wrote (16252)	2/3/1998 12:02:00 AM
From: Analog Kid	Read Replies (1) \| Respond to of 97611

RE: DEC factories Can't speak about CPQ needing additional manufacturing capacity at this point but if they did it is unlikely that DEC's factories would benefit CPQ......... CPQ's status as a world class manufacturer did not happen overnight. Many ideas and processes were tested and canned I'm sure before settling on their current model. Once settled on a current successful process, the idea of using another companies' factory with their equipment (more than likely quite different) and people (vastly different) does not make much sense. It's more efficient to just extend your own capacities in the form of expansion using proven equipment that you are familiar with and experienced manufacturing personal that "do it your way all the time".