At ICL’s eighth Annual Quality Vendor Conference last week the theme was the total cost of product ownership, as the company outlined the role of its vendors in the streamlined growth it envisages for the future. ICL’s Director of Purchasing Les Pyle said that steady progress had been made in European sourcing which rose to 33% in 1988 from 26% in 1987. He predicted that this would grow to 40% this year. Indeed, it seems that the reduction of ICL’s vendor base from the current number of 45 will be achieved over the next few years by procuring more than two thirds of its product requirements from within Europe. Not, however, that this precludes Japanese and American products made in Europe, and ICL was quite firm in its antagonistic attitude towards the Fortress Europe mentality. The company sees the cutting of its vendor base in terms of meeting its targets for reducing procurement costs. For example, a 15% reduction is planned in such costs for this year. ICL is, however, evidently disappointed that vendors have been so slow to adopt its Tradanet electronic data interchange service. So far only 15 vendors within the UK have taken it up, yet the company is looking for 25 more suppliers to adopt it over the next year including some from overseas. It argues that the service would enable it to reduce costs by adopting just-in-time inventory management. In fact a vague threat was made that the use of Tradanet may well become a future requirement of ICL vendors. Under questioning, however, the company denied that an electronic data interchange requirement would be tied to its Tradanet service. As regards the recent rationalisation plans which it revealed last month (CI No 1,142), ICL once again denied that the closure of three bases and the loss of 500 jobs heralded dramatic restructuring prior to the company being sold off by its parent STC, adding that UKP37m had been invested this year in Manufacturing and Logistics, rising to UKP42m next year. Furthermore, the facilites at Ashton under-Lyne and Kidsgrove are to be expanded. Sadru Nanji, the Component Product Centre Manager told delegates that he had a budget for 1989 of UKP160m which was split between UKP28.8m for silicon components, UKP39.5m for non-silicon components, and UKP92m for component-related products. His biggest concern was with the market conditions for dynamic memory chips. During 1988 this market had been tricky due to increased demand from digital consumer products, the difficulty that the transition from 256K to 1M-bit devices had caused manufacturers, and the EC’s political intervention in proposing a reference price for memory chips. Nanji believes, however, that this year will see a far better balance between supply and demand. John Pritchard, the Manager of Peripheral Product Engineering, was less optimistic about the disk drive market this year. 3480-type tape drives Last year prices dropped due to competition and over-capacity, and Pritchard obviously doesn’t relish having to raise his procurement margins. In particular he stressed that he did not want to see a price rise in Winchester disk drives, which constitute ICL’s main peripheral expense. He also told delegates that ICL would become more involved in the use of 3480-type cartridge tapes in a bid to offer customers greater capacity in departmental computing at a lower cost. Evidently vendor delivery performance and quality control is a problem within Pritchard’s division, as he spent some time expounding ICL’s Vendor Rating System. This was also a theme developed by Cheryll Haydon-Soutar, the commercial manager of Software Commercial Services. Indeed, software was featured at the Vendors Conference for the first time this year, since ICL sees it as its major growth area. Ms Haydon-Soutar outlined the seamless departmental systems product range based on Unix System V.4 with interfaces and applications conforming to the X/Open common application environment that ICL is creating. She said she was looking to vendors for complete packaged applications and at present had an annual budget of UKP100m t
o spend on such solutions. This budget is planned to rise 200% by 1990. The Conference ended with the announcement of 15 quality awards, nine of which went to European sources. In keeping with ICL’s newly vaunted software slant, a new category, Best Software Supplier, was introduced, and was won by Edinburgh Portable Compilers Ltd for its sterling work on the VME operating system. – Katy Ring
