You heard Mr. Oldfield state the deficiencies of the present equipment. The technical deficiencies of speed, complexity of programming, logic design, and the high cost and size. And Mr. Geiser's answers to these technical deficiencies.

I am not going to get into the discussion of General versus Special Purpose Computers nor Central versus decentralized units. Those of you who have been associated with me in the past know that I have some opinions on these subjects, but you also know I am a strong advocate of Mr. Dickie's statement "Fit the machine to the business - not the business to the machine."

I am glad he raised that point. We are going to pay attention to it in our design and specifications of equipment. We will design building blocks that fit the problem and, as Mr. Oldfield said: "the study team has the Job of determining the technical characteristics of the basic data processing system which is best suited to the needs of the General Electric Company."

This is not a small assignment. 'We have the summaries of two departments. They contain the volume of data information, the rates of data flow, the sequence of information. We are now gathering statistics from several more.

Because of the diversity of products, the range in sizes of departments, we can get the different problems much easier than, I'm sure, if we contacted outside firms. Let me thank those of you present that have given me information, for the open minded attitude, the willingness to supply us with statistics, to reveal plans for the future that mean much to our study for proper evaluation of the growth provisions we must supply.

The main purpose of this meeting is "to accelerate the interchange of ideas - to permit us to gain an understanding of Tour problems - to fashion equipment you want and need to do your job."

It might be added: to reduce the time cycle of the study group by this vast parallel study. Certainly we, the Industrial Computer Section, are gaining much today. I'm sure the information we gather will reduce, considerably, the time schedule of equipment specifications and design thereby making it possible for you to make gains earlier by use of equipment to do your job easier and faster, and more economically.

Our study seemed to indicate, but now we are going to really look into Mr. Bloodworth's statement "the overall integration required has made impractical the drawing of sharp lines between functions." Also, Mr. Dickie said "the output of our processes feed to accounting" - bear out our findings or necessity of an integrated system.

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Lest I be misunderstood, we should go slow in saying ONE integrated system will solve all problems. I'd suggest we limit our thinking to one department or departments that are similar in their operation, structure, processing and information flow, rather than say ONE integrated system for the Company. It may not be impossible but right now I think it is impractical. Principally because of the variety of businesses.

Another indicator we had was that there is not a need for a high speed "report" writer. We may need high speed printers in printing utility bills, insurance premiums notices, bank statements, and Mr. Long from G. E. C. C. might well state that he needs a high speed printer for follow ups on delinquent accounts. But, basic, timely information is more valuable than many reports. There is no need for report strangulation.

You can readily see that no report is necessary listing all the reservations made or the space open on a flight when the information is available for merely "asking." Similarly we are finding that many reports now being issued will not be required if the information is available for the asking. Lacy Goostree will remember a statement he made. It went something like this: "You mean if I want to know how many taxi radio communication sets we sold this month, all I'd have to do is press a button and the machine would tell me. Why man, I wouldn't need that case full of reports over there."

Mr. Bloodworth is right - Communications is the nerve center Facilities should be provided for information to be supplied where needed at the time it is requested.

The following chart shows the flow of information in a business. This may not fit your department exactly, but bear with us and you'll find it Comes pretty close.

Now, if you'll look at only the PAST HISTORY - we will develop a concept of an integrated system by the flow of transactions or information through your business.

This is an end result of business transactions. The classified profit and loss statement. You will note we have all the elements for the effective management of a business. Sales, cost, Distribution Costs. Just a word on why we put distribution costs here. Located here it shows the maximum profit and the cost of the sales effort in accordance with budget. Not the maximum possible profit but the planned profit from proper realization of budget. There is a difference, you know, between maximizing the best mix of product and building a budget for planned operations. Following distribution costs is volume variance. This is the difference between the planned load of budget and the actual lead of sales. This can be a credit as well as a charge.

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Now if you will look at the PAST-PRESENT part of the chart. This part of the chart shows the flow of transactions into the classified P and L. You might say that this is the chart for a business selling retail or from stock. In a "ship from stock" type of business, the transactions are immediate and the entire operation is history very quickly.

Now turn to the next section of the chart, PRESENT-FUTURE. In a manufacturing business, there is additional time, and orders, of course, are many times taken and then filled in the future. In this case then, the business can start to operate in accordance with load of known things in the future. Now there is a possibility of using information for preplanning on a more known basis.

The circle shown for payroll is familiar and self explanatory. The net amount is paid to the employee and the amount deducted from his pay is paid to the agencies for which it was collected. They in turn send the checks to the bank for clearing to the payroll account. The gross amount paid out is charged to operations through the distribution block shown on the previous section 'Of the chart.

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This realization or non-realization of budget becomes the basis for adjusting the Sales Projection. You might refer to it as the present three months rolling estimate that is revised monthly.

Now to the FUTURE. This shows the things that can help us in forecasting the future of the business so that we in effect know where we are going before we go. It is likened to a road map. It shows you the road that you should travel to get from one city to the next, and by close examination - such as looking at the small maps of cities, you can keep from getting lost going through the congested section of the city. You might say this is going from a period when orders are coming in at a rate commensurate with plan or budget and then they go either to a different mix or a rate out of proportion to normal.

These maps will not tell us every bump but they will tell us where we will be if we continue at a given rate, it will tell us how much fuel we will consume if we consume the standard rate per mile. We will know how long it will take and the extra expense for stops along the way if we go through a meal period, or the higher expense with a stop overnight.

In the lower right corner of the chart is the resultant of the forecasts. It is the circle of developing the manufacturing instructions for new products. Its flow is as pictured.

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In present data processing we are following the principle of start and stop, start and stop. Better expressed as batch bookkeeping. We heard that word - BATCH - several times this morning. This kind of operation by its very nature creates peaks and valleys. Peaks of work and the delay of information or creation of overtime. This is not a condemnation of our present type of transaction booking, it is an examination to see if there is a better way that should be considered. Progress is Our most important product. Not only in the product that we sell the customer, but how we make it and how we serve him. How we run our business and how we serve our shareholders.

By making a study of this type, by being able to sit on the hill and look at the entire business without getting the effect of one particular function or type of transaction, the problem becomes, in my opinion, very simple. This business divided into two main categories:

1. The statistics for future - the road map

2. The records of the business - the results of the past

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Earlier I stated that we would show you some of our thoughts along the line of looking into the future.

Many of you are familiar with the PRODUCTRON. That simple and inexpensive computer was developed by Manufacturing Services and the General Engineering Laboratory.

PRODUCTRON

Manufacturing Services has stated that successful manufacturing is based on sound production scheduling.

Production scheduling is becoming increasingly important. Automation requires greater fixed investment for less flexible facilities and thereby requires more intelligent utilization of manpower, machines, and materials. The approaching guaranteed annual wage necessitates good production scheduling. The competitive situation constantly requires shorter and more reliable production deliveries.

The General Engineering Laboratory developed the PRODUCTRON, a special purpose analog computer, to handle your production scheduling problems as outlined by the Product Control Services.

The PRODUCTRON is a scientific tool especially suited for solving linear load capacity analysis Of production scheduling. Load capacity analysis is the means for measuring the feasibility of a scheduling plan. This measurement is the means of your planning your utilization of facilities, of making deliveries to your customers, of expenditure of money, and of building your inventory.

The three basic elements of the analysis are:

1. Capacity of the station or area. 

2. Load impact of each product.

3. Proposed schedule.

The PRODUCTRON is capable of analyzing the hour-impact loading

of 50 different products on each of 24 work sections. This computer performs the multiplications and summations instantaneously and maintains the results permanently. By now you are wondering how this desk size computer works. Since each unit of product has a different work-load impact on anyone work station, it is necessary to know what the work load for each station will be if a certain

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1. Set in the quantity of each product on the top dials

2. Depress the work station selector for the desired work station

3. Read the meter indicating the load

In addition to being a most scientific tool for solving your load-capacity analysis of production scheduling, the PRODUCTRON is versatile and is suitable for solving other linear problems like materials explosion, evaluating a process change, and budget synthesis. Also, we can, under a standard cost system write the financial statement (to three significant figures) before the books are closed by inserting certain "batch" statistics in the computer.

The cost of this computer is only about $12,000. This is the total cost, not the monthly or even annual rental. Due to its simplicity of design and proved components, it is estimated that maintenance and service will be less than $100 per year and will result in minimum loss of operating time. The only moving part is a switch whose life is estimated at ten years. It operates on standard 115 volts a-c power and construction permits installation in the office or on the factory floor without requiring such accessory equipment as air conditioning.

To summarize - this simple analog computer that is designed to perform linear problems of the first order, can therefore, solve some of our other projections into the future, provided they are linear. It can calculate the budget, it can calculate the financial statement from relatively few known statistics, it can optimize product mix, and a host of other things. These Mr. Dickie and his associates did not visualize at first, but they did discover them in conversation with others and are still looking for problems that it can solve.

The more advanced computers that solve complex functional equations will be discussed later.

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