DIGITAL EQUIPMENT CORPORATION:END POINT MODEL

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DIGITAL EQUIPMENT CORPORATIONEND POINT MODEL

• Presentation By
• Group 13

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Basic Tasks Involved

• Analysis of present situation at DSM
• Scope for Improvement
• Evaluation of End Point Model (EPM)
• How is EPM (Virtual Integration) different from
  Vertical Integration?

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Problems with the old system

• Old system had a variety of computer-related
  systems in place each was a discrete entity
• Software was tailored to the needs of each
  individual area
• Disjointed information flow

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Present Situation

• Cycle time too high40 weeks
• Component Test and burn-in6-8 weeks
• Module Assembly20 weeks
• System Integration6-8 weeks
• Distribution6 weeks
• Target to reduce this cycle time to 15 days

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Scope for improvement

• Cycle time consists of
• information
  transaction75
• (This can be reduced
  significantly)
• material transaction25
• Hardwired network is already in place.

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ENDPOINT MODEL PLAN

• Focuses on integrating 4 elements
• System Information and management tools
• Control
• Physical Manufacturing Processes
• Programs and Philosophies

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Advantages and Disadvantages of Endpoint Model

• Reduction in information flow time
• Management discipline
• Accountability in demand forecasts
• Accurate inventory records

• Intricate system
• Hard to implement
• Dealing with change

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Cycle time reduction??

• Eliminating component test of incoming materials
  leads to increased reliability on the suppliers
• Eliminates system integration can increase
  Defect Rate
• Enormous pressure on the Board Assembly Line to
  produce defect free products.

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Networking. A Boon

• Reduces Cycle Time radically
• Streamline flow of information from suppliers to
  manufacturer , manufacturer to customers and
  within the organization itself.
• Enhance the financial and performance statistics
  of the organization

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Is the Network too Entangled???

• Failure of a single link can halt the system.
• Thus Redundant Links Required
• Cost is increased
• Scalability required

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Vertical Integration

• Integrates the supply chain by moving upstream
  and downstream the supply chain.
• Reduce costs, improve quality, timely delivery
  and increase market share by owning and
  coordinating components of the system.
• Purchasing the organizations is very costly.
• Can result in sizable debt and have negative
  affect on the competitive position.

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Virtual Integration

• Similarity attempts to link the components of an
  integrated system to operate as a single entity.
• Different means Links the core competencies of
  individual organizations through cost-sharing and
  risk-sharing agreements so that these
  organizations can act as a larger, single entity.

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Virtual Integration (cont.)

• Organizations continue to operate as separate
  entities, giving them opportunities to pursue
  business in other areas.
• Integrates entity without investing huge amounts
  of capital or completely altering their
  structures.
• Draws on the positive aspects of vertical
  integration without creating sizable debt for the
  parent organization.

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• THANK YOU