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

To: John Carragher who wrote (4353)	11/7/1998 11:41:00 AM
From: Chuzzlewit	Respond to of 7342

John, this is an area where I give TLAB poor marks. If you contrast Gateway to Dell you will find that Dell extends payment to suppliers further, and yet has no difficulty in obtaining parts. And this is not a function of relative size. When Tom Meredith (CFO of Dell) joined the company, Dell had a cash conversion cycle time of around 48 days. By focusing in part on payment terms to suppliers, he as able to reduce the ccc to an eye-popping -5 days! But at that time Dell was just a tiny blip on the radar screen both in terms of absolute size and market share. The key is to establish a good working relationship with suppliers and customers. This allows for a smoother flow from orders to cash, and this is the required engine for a growth company. Without this kind of process integration growth companies find themselves strapped for cash which then impedes their growth or requires them to rely on external financing. TTFN, CTC