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Hp Deskjet Case

In: Business and Management

Submitted By srinathshetty
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BADM 566 Supply Chain Management- write-up 3
Advancement Team 5: Yu Ting Tseng, Evren Yücel, Aslanbek Amrin, Nick Timmons,
Jiraphong Tisavipat
1. HP is in an inventory crisis. What should it do? Qualitatively evaluate the options in case A.
There are two significant, main issues in this case. First, we are inquiring into the best way to satisfy customer needs in terms of product availability, whilst minimizing inventory. The second refers to what exactly minimizing inventory means; is driving towards zero the proper focus for level of inventory?
These issues arise because of H-P’s incredible success in the Inkjet Printers space. Their huge sales growth with the revolutionary Deskjet brought great revenue; And with that, the archetypal dual supply chain problem of decreasing availabilities amidst increasing inventories. There are several significant recommendations that we have, broken down according to A-E, listed below:
A. Building a new European factory: We do not recommend building a new factory in Europe, because it is not entirely clear whether or not European volumes are large enough for the area to justify its own site. To be sure, the average demand in Europe is ~23,000 units/month, which is only 44% of total demand that Vancouver covers itself already. Besides, a new factory would add new overhead costs. So, even though the inventory and service crisis is most acute in Europe, and a new factory would go some ways in that regard, ultimately, there are more efficacious ways of solving the current problems. We think that the solution here lies with localization. Right now, the power supply module fitting and such is done as an aspect of FAT. The proposal out there now is to localize that piece of assembly within each
Distribution Center. This could decrease the safety stock level and increase the capability to react to demand fluctuations.…...

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