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from our president's desk
~
MANY OF YOU KNOW, this is the month we hold costs and improve productivity all along the line-from
our annual corporate-wide management meeting. R&D right on through to Marketing.
This three-day conference is attended by all our
We are especially interested in strengthening our prod-
corporate officers, as well as representatives of every oper-
uct development programs during the new year. It's been
ating division and subsidiary. While there is a great deal
said before, but it bears repeating: New products are the
of communication among these people during the year
lifeblood of our company and their continuing develop-
and while most of their work is accomplished without
ment is our most important single activity. There is some
formal meetings, we find it useful to get the entire manage-
evidence that as our company has grown larger we are
ment group together each January.
doing a less effective job of selecting the most promising
Probably the most important item on this year's agenda products to develop and bringing these efficiently into pro-
is a discussion of our future plans and objectives. Al- duction. Some divisions are able to do this better than
though our preliminary goals for the new year have been others, and one of our primary objectives is to see that all
established well in advance of the meeting, we find it very do it as well as the best.
beneficial to present these in some detail to all our man-
In addition to formulating specific plans for this year,
agers. Since this is a shirt-sleeve conference in which
our management conference will devote itself to five-year
everyone is invited to express his views and constructive
growth projections for the company. Although our busi-
criticisms, we are able to get a good cross-section of
ness has grown nearly two and one-half times in the past
opinion and use this effectively in modifying and improv-
five years, our initial studies indicate that the opportuni-
ing our long-range plans and programs.
ties for us are just as great-perhaps even greater-in the
During 1964 we intend to continue our emphasis on next five years as they have been in the past. It is a con-
obtaining greater efficiency and economy in our oper- tinuing responsibility of our management group to see
ations. Although good progress was made in this direction that these great opportunities are not lost to us by a lack
in 1963, there are still many ways in which we can reduce of either vision or capability.
www.HPARCHIVE.com
HP's EASTERN AIRLIFT
Y au' d think the cargo was perishable
the way they rush it eastward to customers
Throughout each day, stacks of
instruments and parts for customers
in Eastern states grow in HP's
West Coast shipping departments.
Shortly after 4 p.m. a truck arrives from San Francisco
International Airport at the Stanford Industrial Park plant.
Fork lift operator Raul Jara is shown ready with a loaded pallet.
T HE TIME IS a few minutes after four on any working
day. A truck from San Francisco's International Airport
backs up to one of the company's shipping area at Palo
Alto in Stanford Industrial Park.
As the driver opens the doors of his van, a lift truck
operator appears with a pallet tacked high with packaged
HP instruments. He returns to the shipping room for another
load, and perhaps again for a third.
Thus, another "airlift" of consolidated shipments to 13
Eastern states gets under way. In just a few more hours, the
instruments will arrive at ewark International Airport
3,000 miles away, ready for delivery to the customer's door-
step.
HP's "air consolidation program" is now in its sixth
month of operation and is working even better than its
originators had dared to hope in the beginning.
Shipping time to Eastern customers has been reduced by
as much as two weeks, and the cost is no greater than by
conventional surface transportation. In fact, there are savings
for both the company and customers in many instances.
The concept of the program is simple, like most good
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Eastern airlift (continued)
HEWLETT - PACKARD
Flying Tiger line uses swing-tail all-cargo aircraft.
HP's consolidated shipments are loaded at about 6:00 p.m.
At Newark airport, just a few hours after instruments are
picked up on the West Coast, plane is unloaded and shipment
is broken down for delivery to individual customers.
ideas, although the vast amount of details that had to be Prior to August, transit time between the coasts averaged
worked out in advance kept Traffic Manager Rod Ernst 14 days by overland carriers. Now the time has been reduced
skittering around for nearly a year. to no more than four days to the furthermost corner of the
Each day, instruments and parts ordered by Eastern cus- Eastern area. Locations close to the metropolitan ew York-
tomers from all Palo Alto plants are marshalled in three ewark area receive delivery in as little as one day.
shipping departments. From here they are trucked to the air- Ernst, working closely with Bud Eldon (systems and
port to be loaded on a fast Flying Tiger turbo-prop cargo operations analysis manager) and Flying Tiger officials, put
plane to be flown to Los Angeles for pickup of Moseley the program through a dry run last March. The study con-
recorders, and then on to Newark. firmed that such a system-the first developed by an elec-
At ewark, Flying Tiger personnel break the consolidated tronics manufacturer-had many advantages for the cus-
shipment down by individual customers and distribute each tomer, the carrier, and the company. Speed is an obvious
order via United Parcel Service, parcel post, independent advantage, and particularly when it costs no more than
trucking firms, or local air delivery as directed by HP's Palo slower shipping methods. The delivery advantage Eastern
Alto Traffic Department. The specific method of transporting competitors may have had, no longer exists. The company
instruments that last leg of the journey depends on the dis- also has better control over shipments. It's now possible to
tance, speed, and cost. pinpoint the hour of delivery and to know in advance the
At present the program covers an area bounded by Maine, exact cost.
Western Pennsylvania, and southward to Virginia. Forty All in all, HP's air consolidation program was one of those
percent of the shipments originating at the company's West ideas that they ran up a flagpole, and it's been flapping
Coast plants go to 1,500 customers in these 13 states. happily in the breeze ever since.
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During a recent meeting in Palo Alto,
Hewlett-Packard board of directors
reviewed business operations for
1963 and esta blished corporate
goals for 1964.
Sales up in '63;
earnings dip
panies other than our HP group. In 1963, however, they lost
H EWLETI-PACKARD'S TOTAL SALES for the fiscal
year ended October 31, 1963, amounted to 115,930,-
801, according to final operating figures released to
this outside revenue and also incurred heavy expenses of a
non-recurring nature in their integration into the corporate
the press on January 7. This represented a 4% increase over organization. These factors reduced our earnings by about
1962 sales of $110,959,355. 8 cents a share in 1963.
Net earnings totaled $7,139,950, down 6% from the "The transition to direct selling, while it affected our 1963
$7,588,174 earned in 1962. After payment of preferred divi- profit picture, has been highly successful. The sales groups
dends, 1963 earnings allocated to common stock were equiva- are now an integral part of our total operation and we
lent to 60 cents a share on 11,211,654 shares of common expect them to add substantially to our earnings beginning
stock outstanding on October 31, compared with 65 cents in 1964."
on a slightly smaller number of shares in 1962. In discussing other phases of the company's 1963 oper-
Detailed financial information on the company's opera- ations, Mr. Packard said changes in defense programs and
tions is contained in the 1963 annual report. The 20-page government procurement schedules tended to slow the place-
report, now being printed, is expected to be mailed to stock- ment of orders during the first six months.
holders on January 24. "However, business picked up considerably during the
In his year-end review, President Dave Packard noted second half," he said. "Orders for the entire year reached
that nearly all HP operating divisions and subsidiaries in- a record level of $120,705,503, up more than 8% over 1962.
creased their sales and earnings during 1963. At the end of fiscal 1963 our backlog was approximately
"As we anticipated, however, over-all earnings were af- $17,000,000, the highest in the history of the company."
fected by the integration into the corporate structure of our Total full-time employment at year end was 6,598, up
newly acquired sales organizations," he said. "Figures for 5% over 1962. Of this total, approximately 50% were em-
these groups are consolidated into our financial statements ployed in Palo Alto; Colorado accounted for 9%, the sales
for prior years as well as for 1963, thereby providing the groups 8%, international 7%, and the remaining 267< by
most satisfactory basis for comparing operating results. Moseley, Boonton, Sanborn, and Harrison.
"The sales firms had substantial earnings in 1962 because The company's annual stockholders meeting will be held
they received considerable commission income from com- at 2 p.m., February 25, at the Stanford plant.
Packard at White House meeting
HP President Dave Packard was among a group of U.S. Following the President's talk, there was informal discus-
businessmen recently invited to the White House to discuss sion on the subjects of unemployment, civil rights, and taxes.
various matters pertaining to the nation's economy. The men. The December meeting with President Johnson was Pack-
members of The Business Council, were asked by President ard's second visit to the White House in less than a year. Last
Johnson for their advice, ideas, and for "a cooperative spirit July he was among a group of Business Council members who
whose total aim is to move this country forward in all areas." conferred with the late President Kennedy.
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international report: operations in Europe move forward
New "444" accounting machine or tabulator can
add, subtract, and multiply internally (10 digits by
10 digits). Curt Edelman (left) is manager of the
I BM system for HPSA, and Charles Hartlieb is
operator and programmer.
GE EVA Extensive IBM equipment has been installed
by Hewlett-Packard S.A. in Geneva to provide vital serv-
ices for order processing, statistical analysis, and account-
ing. It produces customer order acknowledgments, in-
voices, and packing lists. For sales statistics, it yields
accurate monthly records of booked orders by country,
by instrument and by supplier. And for accounting, it
provides information on inventory changes, accounts
payable, receivables, and shipments.
Formerly, manual order processing was in operation at
Geneva, requiring four to eight people to type orders and
shipping releases. It became apparent that an improved
system was necessary to keep up with the rapid growth of
the business in Europe. Geneva law limits the number of
people HPSA can have on the payroll, thus making it
necessary to find methods of improving efficiency.
The equipment reduces order acknowledgment time
substantially and provides much greater capacity for
handling the growing European business. Included is a
document writing system, a tabulator, document-originat.
ing machine, and an electronic card sorter. The entire
system could ultimately be locked-in with Palo Alto;
Ingrid Borzner operates an IBM "836" control unit at Geneva, Switzerland, Boeblingen, Germany; and Bedford, England, for semi-
to prepare punch cards for accounting and statistics. automatic order processing.
INTER ATIO AL OPERATIONS VP Bill Doolittle recently ELECTRO IC MARKETI G COMPANY offi-
awarded 5-year pins to employees in Europe and Canada, mark- cially changed its name to Hewlett-Packard Bene-
ing the first time service citations have been presented outside lux on January 1. The subsidiary company
the U.S. Recipients were: Arnold Staufer, Switzerland; Lisa handles the sale of HP products in Belgium,
Klaus, Canada; Joe de Vos and Fred Schroeder, Germany; Holland, and Luxembourg. Main office is in
Frank Boff, England; Pierre Goemaere, Serge Goemaere, and Brussels, and there is also a branch office in
Gaston Dieryckx, Benelux. Amsterdam.
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FRANCE On the first day of this new year, Hewlett-Packard France officially went
into operation as a subsidiary of HPSA, Geneva. The Paris-based firm has been estab-
lished to handle sales of the corporation's full line of products throughout France.
With Andre Renard serving as manager, the subsidiary already has a staff of 20
people. HP is not new to France. having been represented there saleswise since 1946
by Sassoon Sopher of Radio Equipment. Paris. Mr. Sopher will continue as a con-
sultant to HP France and is a member of that organization's board of directors.
Prior to joining HP recently, Mr. Renard had been a research scientist in the
Aeronutronics Division of Philco Corp. at ewport Beach, Calif. He spent some months
in Palo Alto, before taking over as head of HP France, to become familiar with various
phases of the corporation's activities and its products. The French firm's address is
Boulevard Massena 150, Paris.
Andre Renard is manager of
HP France, newly formed
subsidiary of HPSA.
SWEDE HP Instrument AB has been formed as
an affiliate in Sweden to market instruments in that
country. Erik Ferner is managing director of the
organization which includes a staff of 20 people.
Hewlett-Packard has been represented in Sweden
since 1955 by an independent sales organization
headed by Mr. Ferner and bearing his name.
The new affiliate's home office building is located
in Solna near Stockholm. Approximately 3,800
square feet are used for offices and storage.
Sales engineers include Jan-Erik Lissnils, Gunnar
Jonsson, and Walter Schafroth. Gus Romo is service
and parts manager.
Swedish workshop is well lit and spacious. Service Engineer Tommy
Pellarp is shown at left and Walter Schafroth, sales engineer, is at right.
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