Thursday, April 19, 2007

How to foul up your company

Do what 3D Systems Inc. did, according to this story at

"The headquarters were being moved from southern California to a new Rock Hill, South Carolina, facility. It was outsourcing its global logistics to UPS. And an Oracle Corp. enterprise resource planning system had gone on-stream in the second quarter."

Undertaking three major operational changes at the same time is almost a guarantee for severe problems. This company wound up with results like this: "CFO Fred R. Jones "stepped down by mutual agreement," and was replaced as interim finance chief by Gerald J. Pribanic, a partner with executive services firm Tatum LLC. Then, a delay in filing the annual 10-K report led to a notice from Nasdaq that 3D Systems' stock is subject to delisting, although 3D Systems continues to trade while it appeals the notice." Also, "According to an August company news release announcing preliminary third-quarter numbers, 3D Systems "quickly began to experience unforeseen disruptions and delays in operating the system." Other things were going wrong, too: supply-chain glitches, for example, complicated the entering and processing of customer orders."

Update: The Motley Fool commented on this company as follows:

I just don't see 2007 as the breakout year for 3D Systems. It will be busy getting its house in order after the accounting mishap, not to mention the disruptions caused by a move to a new enterprise resource planning system. The company has stayed aloft this long in part because of the successful defense of its patent portfolio, but it can't glide on that resource forever."

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