by Richard Seltzer, seltzer@seltzerbooks.com,
from DECWORLD,
the Company Newspaper, March 1983
From its earliest days, DEC has been an
international company. It
set up its first foreign subsidiary in
Canada in 1963. A year later, it opened offices in Australia and
in Europe.
Today the General International Area (GIA) consists of: Canada;
Japan; the
South Pacific Region (Australia and New Zealand); and the
Country Development
Region (CDR), which spans the globe, including Puerto Rico and
countries in
Central and South America, the Far East, and Africa. Not
including
Manufacturing, it now has about 4000 employees around the world,
320 of whom
are located at area headquarters in Acton, Mass. It accounts for
about 10% of
DEC's sales.
In larger markets, DEC, through its local
subsidiaries,
sells directly to end users and to OEMs (Original Equipment
Manufacturers),
very much as in the U.S. and Europe. Elsewhere DEC works through
third parties
called "distributors." These are locally owned independent
businesses
in the country in which they operate. They are authorized to
offer sales and
service for a subset of DED's product offering (usually the
entire PDP-11 and VAX
lines). These businesses are the exclusive representatives of
DEC in such
countries as Venezuela, India, Nigeria, Argentina, Chile, South
Korea and the
Philippines.
DEC's operations in a country are typically
set up as a
single legal entity. In Canada, for instance, Sales, Service,
Manufacturing and
product lines are all part of Digital Equipment of Canada, Ltd.
"We try to do business the same way in every
country," says Jerry Witmore, vice president, GIA, "with
adaptations
to suit the local cultural needs and to meet government
requirements."
Modifications in software and hardware, such as the capability
to use the Kanji
character set in Japan, are developed by Computer Special
Systems (CSS) and
Software Services.
"Developing countries have followed the
pattern we saw
in the U.S. 20 years ago," notes Jerry. "They first buy
computers for
universities and use them primarily for scientific research. But
because thee
cost of computers has gone down while their performance has
improved, developing
countries can now get far more computing power for the often
limited money they
have available. Twenty years ago it would have cost $1 million
for an average
system, and ten years ago the cost was around $100,000. At those
prices many
countries simply couldn't afford to get started. But now with
DEC offering computer
systems that sell for under $10,000, opportunities in developing
countries are
expanding rapidly.
"Low cost computers and sophisticated
easy-to-use
applications programs can help developing countries move into
the modern
industrial age more rapidly and smoothly than ever before," adds
Jerry.
"For instance, they might buy computer-aided design and
computer-aided
manufacturing capability, all prepackaged; and train their own
people to use it
and so develop their own industry.
"To decide which countries we should make
investments
in," he explains, "we look at the political and economic
environments
and the state of development of the computer market. We try to
decide where the
best business opportunities lie. We consider the growth
potential, the barriers
to growth, and what we can do to overcome those barriers. These
factors change
all the time.
"Such problems as computer nationalization in
Brazil
and the currency crisis in Mexico are day-to-day occurrences to
us. We must
cope with international currency fluctuations and inflation that
is as high as
100% in some countries. We operate on a set of plans that may
change
dramatically at any time. The
subsidiaries
and the distributors are our main sources of information -- they
build these factors into their plans."
Responsibilities in GIA have been
decentralized and
delegated in the subsidiaries. "We at headquarters give them
strategic
evidence and help them develop their plans," says Jerry. "But
they
are simply too far away for us to try to give them day-to-day
technical, sales
or marketing support.
"The biggest growth opportunities for us are
in those
countries where we're not yet number two," he adds. "For
instance, in
Japan, the second largest computer market in the world, we have
a very small
market share. With continued focus and effort we could have
considerable growth
there.
"We have many countries at different stages
of
e3volution -- from Canada which is a leader in computer
applications, to
countries that have had very little exposure to computers. As a result," he
concludes, "we get
a dynamic picture of countries in transition all the time. This gives us exciting
opportunities to test
new and different approaches, to try things the company hasn't
done before, and
to adopt and adapt innovations from other parts of the company."
"DED's customers throughout the General
International Area
have the same requirements and expectations for complete service
coverage as
those in the U.S. and Europe," emphasizes Don Zereski, manager,
GIA Field Service.
The applications of DEC's computers tend to
be global. For
example, a bank headquartered in Tokyo, with branches in 50
other cities
worldwide, might place DEC's products in 30 of those cities
around the
world. The system
performance
requirements and, therefore, the service requirements do not
vary appreciably
from city to city. "The
time zones,
language and communications networks might vary," notes Don,
"but the
performance requirements will not.
We
must provide the same high quality service in Tokyo as we do in
London, New
York, and Panama."
The diversity of applications is enormous.
DEC's products
control transportation networks in Australia and Mexico,
communications in
brazil and Santa Domingo, race tracks in Hong Kong, aluminum
smelters in
Canada, machine tools in Japan, manufacturing technology in
Bangalore, India,
ocean research in Puerto Rico, and health care and patient
records in New
Zealand.
The complexity of the challenge to the
service organization
is further compounded by the number of different DEC products in
use. "We still
service some of the first
machines produced," says Don. "It is not at all uncommon for a
Field Service
branch to be required to support multiple models of several
product families,
each requiring unique spare parts, technical documentation, test
equipment and
trained technical personnel. Not too long ago, we had a request
to provide
special service for a PDP-1 located at the Atomic Research
Center in Chalk
River, Canada. The PDP-1 was the first computer produced by DEC.
Fortunately,
we were able to locate the right technical resource and the
part. The average
DEC service location in GIA must stock and provide replacement
and/or repair
for over 4000 individual parts.
"The key to success in GIA, and, in fact,
most computer
service businesses, is having the right part, in the right
place, at the right
time, in the right quantity, with the appropriately trained
technical person
available to diagnose and remedy the malfunction. The large geography of
GIA, coupled with the
multitude of individual governmental rules and regulations, time
zones and
languages compound the task," he explains.
"Consider for a moment the requirements and
difficulties involved in transporting a single emergency spare
part from our Distribution
Center in Woburn, Massachusetts, to Sydney, Australia, or to
Nigeria. The
distances and time zones alone are a major consideration. If the
request for
the part is received in Woburn on Friday morning, it is already
Saturday
afternoon in Sydney. How do you communicate to check a part
number of an
alternate part selection? Our Woburn logistics center as well as
our Acton
support center must be capable of responding to these
emergencies 24 hours a
day, 7 days a week. Clearly, we try to do as much advanced
planning as possible
to minimize the occasion for emergencies and, in fact, carry
much more stock to
further minimize occurrence.
But having
the right part is only part of the solution. Before we can
actually transport
it, we must have the proper documents required to export it from
Woburn and to
import it into the customer's country. The myriad regulations,
duty codes and
sales tax requirements add to the complexity.
"In addition to having the right parts in
place, we
must consider the availability of trained and qualified service
engineers. The
average service engineer today requires about eight weeks of
initial training
and three weeks a year of training on new products. Most of our
training is
performed in English, which makes recruiting difficult for those
countries
where English is not the native language.
If we do not have the correct person in the physical
location and
another is required from outside the country, it again requires
special care
and planning. We
must prepare our
support personnel with passports, visas, work permits, and, yes,
the occasional
trip to the dispensary for a precautionary vaccination. Booking flights,
making special hotel
arrangements and requests for permission to exchange dollars to
another
restricted currency all take special knowledge and planning.
"Our people are often required to perform
above and
beyond the call," adds Don. "For example, a recent service call
into
the People's Republic of china required that the engineer take
an overnight
ferry boat from Hong Kong to Canton and then connect with a
train which took
two days to reach the site. He literally disappeared off the
face of the Earth,
returning three weeks alter. In other locations, engineers have
had their
passports confiscated until the customer was satisfied that the
systems were
operable."
Don has been with DEC for 20 years and has
been in charge of
GIA Field Service since 1972. He has been actively involved in
numerous new DEC
subsidiary start-up operations, as well as the on-going
operation of the GIA
subsidiaries.
There are now about 2000 people in GIA Field
Service, 105 of
whom are headquartered in Acton, Massachusetts.