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To: Lucretius who wrote (77839)	11/10/1998 8:42:00 PM
From: John Hauser	Respond to of 176387

LT. I love whacking bears. CPQ has been trying to transform itself for some time now. And I believe that the weight that is their past inefficient model is a chain wrapped around an anchor around their necks. Dell had the right idea from the start and it has put them miles ahead. The quick and the dead, my friend. JH

To: Lucretius who wrote (77839)	11/10/1998 11:23:00 PM
From: Electric	Read Replies (1) \| Respond to of 176387

(Read the entire post) Did you happen to see the USA Today article about 2 weeks ago, front page of the Friday Money section comparing the two Texas companies, DELL and CPQ? The group took a tour of both sites and mentioned that CPQ needs to upgrade their plant and their equipment, while the DELL plant is automated, up to date and extremely efficient. CPQ might and has been trying to enter the BTO business for the last how long? Unless one has an accounting background, or an inventory process background one does not understand that saying "I am going to enter the direct market" is worth less than the paper it is printed on. Think about what direct means. It means that either you make it how the customer wants it as fast as the customer wants it or the customer goes elsewhere. In order for CPQ to benefit from direct it has to have an process model in place that can handle the load. In order to have the process in place, the company has to take apart every part of a process, from when the plastic cover enters the beginning phase, until the finished product exits. If each and every stop along the way isnt perfect, the model shuts down. There are back delays and inefficiencies that occur. ( An example might be if the process behind the sodering of the main mother board is not functioning, then mother board after mother board keep being produced and arent used.) Each and every part has to be working in sync or the company is not profitable. Does anyone wonder why most firms dont have a BTO system? If it fails, so does the company! So unless CPQ develops this model and puts it in place, then it does the company no good to even try to do it, it might look good for promos and public hype, but when the Income Statement comes out and the company isnt gaining from pushing inventory through the channel and doesnt have reduced holding costs (due to inefficiencies in the model) then the company is still not profitable. I dont think the street buys that CPQ is going to do it. The company keeps saying it is going to but until it gets the components of the model in place, the earnings will keep being .01 or .02 and will be blamed on developing costs or acquisition costs. That is my Accounting 500 course in Inventory Processing.. FWIW