NXP-- WTF?

Spehro Pefhany wrote:
> 
> On Sun, 03 Sep 2006 03:12:24 GMT, the renowned "Michael A. Terrell"
> <mike.terrell@earthlink.net> wrote:
> 
> >Joerg wrote:
> >>
> >> I could almost bet they won't listen. I tried that years ago. Wrote to
> >> the big chief, didn't even get as much as a form letter back. So I just
> >> dumped them during designs, mostly. IMHO the problem behind a lack of
> >> profitability in a large company is often management itself.
> >>
> >> They would be well advised to sit down and figure out what had gone
> >> wrong the last 1-2 decades. Look at key competitors. Or to say it
> >> bluntly, figure out why TI is a lot more profitable than Philips was.
> >> That's what needs to be done now. With some luck they may have the
> >> freedom to change things since Philips only has a minority stake left.
> >
> >
> >   Joerg, its a sure sign they aren't going to listen, or the "Comment"
> >button wouldn't have been so obvious.  Its to make the new investors all
> >warm and fuzzy inside.  The only chance of any change is if the
> >investors are the first to see any comments.
> 
> I saw their ad on a financial website (bigcharts.marketwatch.com), not
> a technical site.
> 
> It's in their info that 70% of NXP's business is concentrated among
> only 50 or so direct customers, and the remaining 30% is split between
> 30,000-odd customers through distribution. So if you're not in the
> gang-of-50, presumably you may be lost in the noise at times as far as
> priorities go.
> 
> Best regards,
> Spehro Pefhany


   I know that Microdyne didn't use anything when I worked there, even
though their rep was always dropping off databooks and trying to get
them to design in their chips, or at least list them as second source
for jellybean parts.  They had parted way in the early '80s because of
delivery problems.  Luckily, everything was jellybean and readily
available from National or other sources.  that was one thing they were
consistent about.  if a vendor was blacklisted, it was usually forever, 
I blacklisted beckman after a problem with their SMD pots failing after
board wash.  We were using a method and chemicals they had approved, but
a board fresh out of the dryer would have two or three bad pots, or
about 32 percent failure rate. I switched to Bourns and had almost Zero
problems. All I did have was assembly being too rough on a board and
breaking them loose from the PC board.  I caught them trying to replace
the pots without sending them back to the module test line to be
recalibrated.  Some people lost their jobs.


-- 
Service to my country? Been there, Done that, and I've got my DD214 to
prove it.
Member of DAV #85.

Michael A. Terrell
Central Florida

"mw" <mw@avoidspam.com> wrote in message 
news:x9AKg.5124$tU.5072@newssvr21.news.prodigy.com...

>> The requirement for acronyms to be pronounceable is contentious. The 
>> classic self-referencing acronym TLA (three-letter acronym) is not.
>
> Of course "tla" is pronounceable!  ...it's the first syllable in Tlaxcala 
> :
>
> http://en.wikipedia.org/wiki/Tlaxcala
>
> Pronounced  &#4294967295;tlah SKAH lah&#4294967295;

La Scala?

Hello Spehro,

>>>
>>>It's in their info that 70% of NXP's business is concentrated among
>>>only 50 or so direct customers, and the remaining 30% is split between
>>>30,000-odd customers through distribution. So if you're not in the
>>>gang-of-50, presumably you may be lost in the noise at times as far as
>>>priorities go.
>>
>>I could imagine that if you are among those 50, you probably don't
>>even use that website.
> 
> At an average of $70M+ per big customer per year, they could afford to
> dedicate scores of employees full-time for each one. 
> 

Then one of those $70M+ customers unexpectedly goes away for some reason 
and there'll be a Richter scale 6+ happening. Layoffs, stock slide, the 
usual. The other risk is that large customers easily have you over the 
barrel for margins as has been evidenced numerous times in automotive. 
Remember Senor Lopez?

Relying mostly on existing large customers is a risky business strategy. 
Catering to small ones is the ticket to long term growth. TI has 
understood that, and so did National, Analog Devices, OnSemi and a few 
others.

A week ago one of my clients (smaller biz) had trouble obtaining a TI 
part that had gone out of stock for a few weeks. I called TI directly 
and they bent over backwards for that customer. My call was Friday and 
by Monday the parts arrived. That's how to do business. Now try this 
with some of the big EU companies. I have tried and it resulted in 
broken promises and utter frustration. Unless you are the V.P. of 
Engineering at General Motors they don't seem to take it too serious.

-- 
Regards, Joerg

http://www.analogconsultants.com

"Joerg" <notthisjoergsch@removethispacbell.net> schreef in bericht 
news:7DHKg.23607$gY6.6430@newssvr11.news.prodigy.com...

> Then one of those $70M+ customers unexpectedly goes away for some reason 
> and there'll be a Richter scale 6+ happening. Layoffs, stock slide, the 
> usual. The other risk is that large customers easily have you over the 
> barrel for margins as has been evidenced numerous times in automotive.

It's also possible a new $70M+ customer pops out of the blue. New staff
to be hired, stock going through the roof, the usual.

> broken promises and utter frustration. Unless you are the V.P. of 
> Engineering at General Motors they don't seem to take it too serious.

Being the V.P. of Engineering at GM has its merits.

-- 
Thanks, Frank.
(remove 'q' and '.invalid' when replying by email) 

Joerg wrote:
> Hello Spehro,
>
> >>>
> >>>It's in their info that 70% of NXP's business is concentrated among
> >>>only 50 or so direct customers, and the remaining 30% is split between
> >>>30,000-odd customers through distribution. So if you're not in the
> >>>gang-of-50, presumably you may be lost in the noise at times as far as
> >>>priorities go.
> >>
> >>I could imagine that if you are among those 50, you probably don't
> >>even use that website.
> >
> > At an average of $70M+ per big customer per year, they could afford to
> > dedicate scores of employees full-time for each one.
> >
>
> Then one of those $70M+ customers unexpectedly goes away for some reason
> and there'll be a Richter scale 6+ happening. Layoffs, stock slide, the
> usual. The other risk is that large customers easily have you over the
> barrel for margins as has been evidenced numerous times in automotive.
> Remember Senor Lopez?
>
> Relying mostly on existing large customers is a risky business strategy.
> Catering to small ones is the ticket to long term growth. TI has
> understood that, and so did National, Analog Devices, OnSemi and a few
> others.
>
> A week ago one of my clients (smaller biz) had trouble obtaining a TI
> part that had gone out of stock for a few weeks. I called TI directly
> and they bent over backwards for that customer. My call was Friday and
> by Monday the parts arrived. That's how to do business. Now try this
> with some of the big EU companies. I have tried and it resulted in
> broken promises and utter frustration. Unless you are the V.P. of
> Engineering at General Motors they don't seem to take it too serious.
>
> --
> Regards, Joerg
>
> http://www.analogconsultants.com

I have to agree with Joerg

I don't care if you have 5 *huge* customers. The parts business is
cut-throat, and the outfits with the best customer service to both
engineers and procurement will win in the end. Philips has been going
downhill recently (and that's a shame because they have some really
nice stuff).

TI is now my vendor of choice for many things for one simple reason: If
I call for assistance (email or phone) I get a response within an hour
(working day hour). Analog Devices now do the same, as do National and
others. I just dropped a BigName[tm] from my updated designs because I
can't get support.

I only do a few million parts a year, but multiply that by all the
small outfits that do 'a few million parts a year' and it adds up in a
hurry.

Cheers

PeteS

On Sun, 3 Sep 2006 23:36:55 +0200, the renowned "Frank Bemelman"
<f.bemelmanq@xs4all.invalid.nl> wrote:

>"Joerg" <notthisjoergsch@removethispacbell.net> schreef in bericht 
>news:7DHKg.23607$gY6.6430@newssvr11.news.prodigy.com...
>
>> Then one of those $70M+ customers unexpectedly goes away for some reason 
>> and there'll be a Richter scale 6+ happening. Layoffs, stock slide, the 
>> usual. The other risk is that large customers easily have you over the 
>> barrel for margins as has been evidenced numerous times in automotive.
>
>It's also possible a new $70M+ customer pops out of the blue. New staff
>to be hired, stock going through the roof, the usual.

A percent or two change in overall sales shouldn't make that much
difference to stock prices, unless the vultures smell a trend. 

>> broken promises and utter frustration. Unless you are the V.P. of 
>> Engineering at General Motors they don't seem to take it too serious.
>
>Being the V.P. of Engineering at GM has its merits.

They even make some pretty decent products these days. 


Best regards, 
Spehro Pefhany
-- 
"it's the network..."                          "The Journey is the reward"
speff@interlog.com             Info for manufacturers: http://www.trexon.com
Embedded software/hardware/analog  Info for designers:  http://www.speff.com

Hello Frank,

> 
>>Then one of those $70M+ customers unexpectedly goes away for some reason 
>>and there'll be a Richter scale 6+ happening. Layoffs, stock slide, the 
>>usual. The other risk is that large customers easily have you over the 
>>barrel for margins as has been evidenced numerous times in automotive.
> 
> It's also possible a new $70M+ customer pops out of the blue. New staff
> to be hired, stock going through the roof, the usual.
> 

Hard to do. If they want an instant new $70M+ customer they need to pry 
them away from a competitor and that usually comes with painful 
discounts. The vast majority of such large customers are the ones that 
used to be the little guy 10 years ago. Woe to those manufacturers who 
have not courted that little guy back then. All they could do is wrestle 
them out of the hands of a competitor.

Old saying in sales: The small acount can become tomorrow's big account. 
If you don't groom it, someone else will.

-- 
Regards, Joerg

http://www.analogconsultants.com

"Joerg" <notthisjoergsch@removethispacbell.net> schreef in bericht 
news:PEIKg.23625$gY6.22047@newssvr11.news.prodigy.com...
> Hello Frank,
>
>>
>>>Then one of those $70M+ customers unexpectedly goes away for some reason 
>>>and there'll be a Richter scale 6+ happening. Layoffs, stock slide, the 
>>>usual. The other risk is that large customers easily have you over the 
>>>barrel for margins as has been evidenced numerous times in automotive.
>>
>> It's also possible a new $70M+ customer pops out of the blue. New staff
>> to be hired, stock going through the roof, the usual.
>>
>
> Hard to do. If they want an instant new $70M+ customer they need to pry 
> them away from a competitor and that usually comes with painful discounts.

So they should be happy, when they loose a $70M+ customer to a
competitor, and letting them give the painful discounts... What
you seem to miss here, is that it doesn't matter much to loose a
customer occasionally; it happens at the competitors side too.

> The vast majority of such large customers are the ones that used to be the 
> little guy 10 years ago. Woe to those manufacturers who have not courted 
> that little guy back then. All they could do is wrestle them out of the 
> hands of a competitor.

No need to wrestle. Loyalty stops when the competitors offerings
are better value for money. Nothing to 'Woe'.

> Old saying in sales: The small acount can become tomorrow's big account. 
> If you don't groom it, someone else will.

And that's the moment to steal them away. Let someone else do the
grooming. It's all about business decisions, and not all are
neccesairily bad. And fluctuations aren't bad either. Look at
your own business, not every month or year is equal. If you had
a few $70M+ customers, you wouldn't be looking for bread crumbs.
Or would you ? ;)

-- 
Thanks, Frank.
(remove 'q' and '.invalid' when replying by email)

Hello Frank,

>>
>>>>Then one of those $70M+ customers unexpectedly goes away for some reason 
>>>>and there'll be a Richter scale 6+ happening. Layoffs, stock slide, the 
>>>>usual. The other risk is that large customers easily have you over the 
>>>>barrel for margins as has been evidenced numerous times in automotive.
>>>
>>>It's also possible a new $70M+ customer pops out of the blue. New staff
>>>to be hired, stock going through the roof, the usual.
>>>
>>Hard to do. If they want an instant new $70M+ customer they need to pry 
>>them away from a competitor and that usually comes with painful discounts.
> 
> So they should be happy, when they loose a $70M+ customer to a
> competitor, and letting them give the painful discounts... What
> you seem to miss here, is that it doesn't matter much to loose a
> customer occasionally; it happens at the competitors side too.
> 

That's what people at Intel must have thought as well. Until this 
weekend, that is. Rumors have it that there is going to be a huge layoff 
tomorrow, something north of 10,000. I just wished this rumor hadn't 
leaked out right before the labor day weekend, must have spoiled many a 
family barbeque around here because our local plant employs about 7000.

Lack of diversification IMHO, plain and simple. They had lots of good 
stuff in the pipeline but ditched much of it. Sometimes to the point 
where I almost banged my head on the table (like when they shelved their 
most excellent CPLD series).

> 
>>The vast majority of such large customers are the ones that used to be the 
>>little guy 10 years ago. Woe to those manufacturers who have not courted 
>>that little guy back then. All they could do is wrestle them out of the 
>>hands of a competitor.
> 
> No need to wrestle. Loyalty stops when the competitors offerings
> are better value for money. Nothing to 'Woe'.
> 
>>Old saying in sales: The small acount can become tomorrow's big account. 
>>If you don't groom it, someone else will.
> 
> And that's the moment to steal them away. Let someone else do the
> grooming. ...


Doesn't usually work in electronics. Except for jelly-bean parts you 
typically stick to the mfg that's been good to you. At least that's how 
it works in many American engineering teams. Not in my wildest dreams 
would I now switch to a LPC ARM. No matter what carrot they hold under 
my nose.


>    ... It's all about business decisions, and not all are
> neccesairily bad. And fluctuations aren't bad either. Look at
> your own business, not every month or year is equal. If you had
> a few $70M+ customers, you wouldn't be looking for bread crumbs.
> Or would you ? ;)
> 

In fact, I do. One of the very tiny clients from 10 years ago is now a 
rather substantial one. Had I turned that teeny job down back then this 
would not be the case. Resting on the laurels is dangerous but, 
unfortunately, a very frequent occurrence in large companies.

-- 
Regards, Joerg

http://www.analogconsultants.com

On Mon, 04 Sep 2006 18:36:13 GMT, the renowned Joerg
<notthisjoergsch@removethispacbell.net> wrote:

>Hello Frank,
>
>>>
>>>>>Then one of those $70M+ customers unexpectedly goes away for some reason 
>>>>>and there'll be a Richter scale 6+ happening. Layoffs, stock slide, the 
>>>>>usual. The other risk is that large customers easily have you over the 
>>>>>barrel for margins as has been evidenced numerous times in automotive.
>>>>
>>>>It's also possible a new $70M+ customer pops out of the blue. New staff
>>>>to be hired, stock going through the roof, the usual.
>>>>
>>>Hard to do. If they want an instant new $70M+ customer they need to pry 
>>>them away from a competitor and that usually comes with painful discounts.
>> 
>> So they should be happy, when they loose a $70M+ customer to a
>> competitor, and letting them give the painful discounts... What
>> you seem to miss here, is that it doesn't matter much to loose a
>> customer occasionally; it happens at the competitors side too.
>> 
>
>That's what people at Intel must have thought as well. Until this 
>weekend, that is. Rumors have it that there is going to be a huge layoff 
>tomorrow, something north of 10,000. I just wished this rumor hadn't 
>leaked out right before the labor day weekend, must have spoiled many a 
>family barbeque around here because our local plant employs about 7000.

Up to 20,000 according to anonymous sources quoted in the WSJ. Maybe
they leaked the 20K figure so when they lay off "only" 10K (10% of
their workforce) people will be relieved. 

>Lack of diversification IMHO, plain and simple. They had lots of good 
>stuff in the pipeline but ditched much of it. Sometimes to the point 
>where I almost banged my head on the table (like when they shelved their 
>most excellent CPLD series).

They just sold some of their interesting radio technology to a
Taiwan-based company. 

>> 
>>>The vast majority of such large customers are the ones that used to be the 
>>>little guy 10 years ago. Woe to those manufacturers who have not courted 
>>>that little guy back then. All they could do is wrestle them out of the 
>>>hands of a competitor.
>> 
>> No need to wrestle. Loyalty stops when the competitors offerings
>> are better value for money. Nothing to 'Woe'.
>> 
>>>Old saying in sales: The small acount can become tomorrow's big account. 
>>>If you don't groom it, someone else will.
>> 
>> And that's the moment to steal them away. Let someone else do the
>> grooming. ...
>
>
>Doesn't usually work in electronics. Except for jelly-bean parts you 
>typically stick to the mfg that's been good to you. At least that's how 
>it works in many American engineering teams. Not in my wildest dreams 
>would I now switch to a LPC ARM. No matter what carrot they hold under 
>my nose.

Whose ARM would you pick, then? Atmel? Oki? TI has a rump offering,
but most of their ARM products are specialized parts and go only to
huge-volume automotive and such like OEM customers. 

>>    ... It's all about business decisions, and not all are
>> neccesairily bad. And fluctuations aren't bad either. Look at
>> your own business, not every month or year is equal. If you had
>> a few $70M+ customers, you wouldn't be looking for bread crumbs.
>> Or would you ? ;)
>> 
>
>In fact, I do. One of the very tiny clients from 10 years ago is now a 
>rather substantial one. Had I turned that teeny job down back then this 
>would not be the case. Resting on the laurels is dangerous but, 
>unfortunately, a very frequent occurrence in large companies.

I think industry diversity is probably more important than number of
customers. If you have hundeds of customers but they all make cell
phones, you're still going down when the market for that product
pauses. 


Best regards, 
Spehro Pefhany
-- 
"it's the network..."                          "The Journey is the reward"
speff@interlog.com             Info for manufacturers: http://www.trexon.com
Embedded software/hardware/analog  Info for designers:  http://www.speff.com