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Hewlett-Packard’s
Deskjet Printer Supply Chain
Cases (A) & (B)

Discussion Guide & Answers

Ranjan Ghosh

| HP’S DESKJET |

Industry characteristics: competitive, fast growing, exploding in Europe, changing distribution channel, rapid technological advances.

Product characteristics: quite, medium price, high print quality, leading technology, commodity–like, lighter and smaller, reasonable speed.

Supply chain characteristics: centralized manufacturing, DCs fulfilling pure distribution functions, bulky products resulting in long ocean transit, lean manufacturing shifts inventory burden to DCs.

| Inventory-Service Crisis |

What crisis: inventory imbalance, i.e., some product options

having excess inventory while some others have shortages.

What caused it: ( many product options due to geography, ( long DC replenishment lead time, ( highly uncertain market, ( inflexible design : not easy to rework one option to make it into another, ( out of control inventory system, ( uncoordinated functional interests (manufacturing, distribution, marketing, engineering )

| Curse of Product Variety |

( High inventory

( Poor customer service

( High manufacturing cost

( High cost of after-sales support

( Forecasting nightmare

( High obsolescence at end-of-life

( High overhead support
|Short Term :

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