...Part 1: Executive Summary Brent Cartier Manager for Special Projects in the Materials Department Hewlett-Packard (HP) Company December 15, 20XX I. Process Elements/Table of Content (Part 2) Part 1 Executive Summary Part 2 Table of Contents I. Issue with Impact Analysis Part 3 Immediate Issues Part 4 Systemic Issues II. Environmental and Root Cause Analysis Part 5 Qualitative Analysis Part 6 Quantitative Analysis III. Alternatives Part 7 Alternatives IV. List Recommendations Part 8 Recommendations V. Implementation Part 9 Recommendations Implementation Plan VI. Monitor and Control Part 10 Monitor and Control Part 11 Conclusion & Management Plan Part 3: Immediate Issue Hp’s distribution centers have been filled with pallets of the DeskJet printer. However the Europe is still claiming the inventory levels there needed to be raised. The Vancouver top management insists that HP is just going to meet customer needs with fewer inventories. Our immediate issue: 1. Too much inventory are in the DeskJet supply chain 2. European and Asian DCs cannot meet delivery requirement 3. Vancouver Division couldn't build the right products in the right quantities. Part 4: Systemic Issues 1.DCs operate system: Timing: Long Term Nature: Strategic In order to match Vancouver’s pull production system, DCs operate system need to be updated to a pull system as well. Now DCs performance measures are LIFR (Line Item Fill Rate) and OFR (Order Fill...
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...|Hewlett-Packard: Deskjet Printer Supply Chain | An Introduction This case study deals with Hewlett-Packard (HP), a famous manufacturer of computers and peripheral products. In the early 1990s, HP faced “Inventory/Service-Crisis” concerning one of their high volume products, the DeskJet printer. Despite growing inventory levels at the distribution centres in Europe and Asia-Pacific, customer service levels were unsatisfactory. Affected by growing competition this problem had to be handled quickly. Brent Cartier, Manager for Special Projects in the Materials department of HP Company’s Vancouver Division, had tried his best to find the possible solutions of the issues related with inventory of DeskJet printers that were arisen at world level specially, at Europe. Opinions and reactions of different company divisions concerning the implementation of DC localization were analysed. Although HP’s printers were selling well, inventory levels worldwide were rising as sales rose. In Europe, high product variety was making inventory levels especially high. HP considered several ways to address the inventory issue: airfreighting printers to Europe, developing more formalized inventory planning processes, or building a factory in Europe. The case is classic example for inventory analysis and to identify the organizational challenges which companies face in implementing supply chain solutions. A Background to HP Deskjet: High volume...
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...Department of HP Vancouver Division. Bob Foucoult, production manager. Dr. Billy, inventory expert from Corporate HP. Laura Rock, an industrial engineer. Jim Bailey, the planning supervisor. Jose Fernandez, the purchasing supervisor. Kay Johnson, the traffic department supervisor. HP company was founded in 1939 by William Hewlett and David Packard. During 1980s HP and Canon separately pioneered inkjet technology at their respective corporate laboratories. HP led the inkjet market in the US, while Canon led the market in Japan. European competitors included Epson, Manisman-Tally, Siemens’ and Olivetti. Inkjet printers were rapidly becoming commodity products. The end customer, choosing between two inkjet printers of equal speed and print quality, increasingly used general business criteria such as cost, reliability, quality and availability to decide. Product loyalty continued to decrease. In Vancouver Division, the manufacturing organization realized early on that a fast, high-volume process would be required for success in the printer market. With the current(1979) 8-12 week cycle time and 3.5 months of inventory, it would be doomed to fail. From 1982, Vancouver Division had converted the factory to stockless production and had reduced inventory from 3.5 months to 0.9 months, with a drastic reduction in cycle time. The network of suppliers, manufacturing sites, distribution centers(DCs), dealers and customers for the DeskJet product comprised the DeskJet supply chain. Manufacturing...
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...Running Head: Hewlett-Packard Supply Chain 1 DeskJet Printer Inventory Ernesto Gutierrez 5850 Logistics/Case 2 Webster University Stephen Lee 27 September 2014 Hewlett-Packard Supply Chain 2 Abstract In 1998 Hewlett Packard introduce one of the first printer products to gain sales over 600,000 units in 1990. With over $400 million in sales, Hewlett Packard had gain a foot hold on this market and was growing steadily at a rapid rate. Unfortunately, inventory growth had tracked sales growth closely. Already HP’s distribution centers were having issues maintaining inventory levels and were not able to maintain satisfactory product availability. Can a new logistics design be used to control this issue, will a delayed differentiation help with the issues faced at HP, When is it the right time for suppliers to be involved with new product development process. This paper will attempt to answer these questions to better understand the operations at HP and their supply chain. Hewlett-Packard Supply Chain 3 DeskJet Printer Inventory The inventory problems in the European distribution...
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...Case: Hewlett – Packard – Supplying The DeskJet Printer in Europe Sales of DeskJet printer have grown steadily, now reaching a level of over 600,000. Unfortunately, inventory growth has tracked sales growth closely. HP’s distribution centers are filled with pallets of the DeskJet printer. The organization claims that inventory levels are need to be raised even further to maintain satisfactory product availability. The DeskJet Supply Chain HP in Vancouver does manufacturing. There are two key stages in manufacturing process: (1) printed circuit assembly and test (PCAT) and (2) final assembly and test (FAT). PCAT involves the assembly and testing of electronic components (like integrated circuits, read-only memories, and raw printed circuit boards) to make logic boards used in printer. FAT involves the assembly of other subassemblies (like motors, cables, keypads, plastic chassis, gears, and the printed circuit assemblies from PCAT) to produce a working printer, as well as the final testing of the printer. The components needed for PCAT and FAT are sourced from other HP divisions as well as from external suppliers worldwide. Selling the DeskJet requires “localization”, customize printer to meet the language and power supply of the local countries. It involves assembling the appropriate power supply module, which reflects the correct voltage requirements (110 or 220) and power cord plug, and packaging it with the working printer and a manual written in the appropriate language...
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...Hewlett-Packard Company DeskJet Printer Supply Chain Summary Hewlett-Packard is company dedicated to manufacture computers and peripheral products. It was founded in 1939 by William Hewlett and David Packard. Their products included printers, plotters, magnetic disc and type drives, terminals and network products. In 1990 HP had over 50 operations worldwide, with revenues of $13.2 billion and net income of $739 million. One of its most successful products was the DeskJet printer, which was introduced in 1998. Sales had grown steadily, reaching a level of over 600,000 units in 1990 ($400 million). However, inventory growth had tracked sales growth closely. Already, HP’s distribution centers had been filled with pallets of the DeskJet printer. Worse yet, the organization in Europe was claiming that inventory levels there needed to be raised even further to maintain satisfactory product availability. HP’s Vancouver division, in Vancouver, Washington was also in charge of designing and producing the InkJet printers, which were sent to three distribution centers (DC) in Europe, Asia, and America. Inkjet printers were one of the most promising printer technology which can provide good quality printing at smaller cost. Worldwide market for printers in 1990 was about 17 million units amounting to $10 billion, with major players being HP in the US, Canon in Japan and Epson, Manisman-Tally, Siemens etc in Europe. Despite its new InkJet printers sold well, the level of reserves...
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...1. SITUATIONAL ANALYSIS Market & the Product Hewlett-Packard (HP) Company was founded in 1939 with headquarters at Palo Alta, California. The Peripherals Group was the 2nd largest of HP’s 6 product groups. Its revenues during 1990 stood at $4.1 billion. The Peripherals Group had set technological standards in inkjet printers. This was mainly due to the sale of HP DeskJet printers. The Vancouver division located in Washington was established in 1979. HP consolidated designing and manufacturing of its inkjet printers to its Vancouver site. The inkjet printer market was characterized by its competitiveness and rapidly expanding nature especially in Europe. Value Chain Manufacturing was based out of a single unit located in Vancouver. There are two main stages in the manufacturing process, PCAT (Printed circuit assembly and test) and FAT (Final Assembly and Test). Production was based on Kanban concept. Production unit did not carry inventory but functioned only to replenish stocks at Distribution centers. Supply variability was minimal due to Kanban and safety stocks. Stocks produced at the Vanucouver unit were shipped to distribution centers in North America, Europe and Asia Pacific. The entire supply chain process involved 1 week of factory cycle time. For transportation to places within the US, it took an additional day whereas for orders outside the US (Europe and Asia), there was additional 4-5 weeks due to ocean transit and time to clear customs and duties...
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...Hewlett-Packard’s Design for Supply Chain Program By Brain Cargille, Stephen Bear, and Jason Amaral Innovation Summary The concept of “design for supply chain” (DfSC) is not new at Hewlett-Packard (HP). (See: HP’s “Six-Pack” for a summary of DfSC.) For more than ten years the company has evaluated the supply chain impacts of design decisions. Indeed, two early examples—DeskJet localization and LaserJet universality—are described in a wellregarded Harvard Business Review article and in widely used academic case studies. 1 What is new is the innovation that has allowed HP to deploy DfSC in a systematic, repeatable, and broad-based way to hundreds of product development teams and thousands of engineers across the company. A unified set of technologies, methods, training, and infrastructure have been implemented to enable rapid and effective DfSC decision-making. “Over the past 3 years DfSC has been broadly adopted by all HP’s Business Groups and Regions. In addition, there have been over 50 individual projects undertaken in collaboration with engineering, marketing, supply chain and finance teams. Savings directly attributable to these programs has exceeded $200 million/year and are expected to reach the $1 billion mark in 2006.” - Dick Conrad, Senior Vice President, HP Global Operations Supply Chain 1 Edward Feitzinger and Hau L. Lee. “Mass Customization at Hewlett-Packard: The Power of Postponement.” Harvard Business Review, January-February 1997: pp. 116-121. Laura...
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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 ...
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...Hewlett-Packard Company | Desktop Printer Supply Chain | | | | | SUBMITTED BY Allada Prasanth (1211087) Ishan Puri (1211100) Manish Pathak (1211113) Priyanka singh(1211126) Sarang Bhawre (1211139) Tarun Gopalkrishnan(1211152) INTRODUCTION: Hewlett-Packard (HP) Company was founded in 1939 with headquarters at Palo Alta, California. It grew steadily over the next fifty years, diversifying from its base in electronic test and measurement equipment into computers and peripherals products which now dominated their sales. The Peripherals Group was the second largest of HP’s six product groups, with 1990 revenue of $4.1 billion. The Peripherals Group had set technological standards such as disposable heads in inkjet printers. This report is with reference to the DeskJet Printer division of HP. HP DeskJet printers’ value chain comprised of four nodes (a) Suppliers (b) Manufacturing (c) Distribution centers and (d) Dealers. There were two key stages in the manufacturing process as shown below in the figure: 1. PCAT – printed circuit assembly and test 2. FAT – final assembly and test Figure 1. The Vancouver Supply Chain Manufacturing was based out of a single unit located in Vancouver (USA). Production unit maintained adequate safety stocks for raw materials. Production was based on Kanban concept. Production unit did not carry inventory and functioned on made to order scheme to replenish stocks at Distribution centers. Supply variability was minimal due to...
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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 ...
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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...
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...Supply Chain Management Assignment ON BULLWHIP EFFECT AND DELAYED DIFFERENTIATION Submitted to Prof Dr. P.R.S.Sarma Submitted by VENKATA RAJA GOPAL RACHERLA Regd. No.: 1226109236 SEC-B MBA (IB) - 2009-11 1 INDEX S No. I 1 2 3 Topic Bullwhip effect Introduction Explanation Causes of Bullwhip Effect Possible Remedies The Bullwhip effect in the electricity sector Conclusion Postponement or Delayed Differentiation Page no. 3 4 4 5 4 5 6 7 6 II 1 10 11 12 Introduction 2 Forecasting uncertainty 14 3 The long-term potential 16 2 THE BULLWHIP EFFECT 3 1. Introduction The bullwhip effect is the magnification of demand fluctuations, not the magnification of demand. The bullwhip effect is evident in a supply chain when demand increases and decreases. The effect is that these increases and decreases are exaggerated up the supply chain. The essence of the bullwhip effect is that orders to suppliers tend to have larger variance than sales to the buyer. The more chains in the supply chain the more complex this issue becomes. This distortion of demand is amplified the farther demand is passed up the supply chain. Proctor & Gamble coined the term “bullwhip effect” by studying the demand fluctuations for Pampers (disposable diapers). This is a classic example of a product with very little consumer demand fluctuation. P&G observed that distributor orders to the factory varied far more than the preceding retail demand...
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...Aligning Supply Chain Strategies with Product Uncertainties Hau L. Lee upply chain management has emerged as one of the major areas for companies to gain a competitive edge. Managing supply chains effectively is a complex and challenging task, due to the current business trends of expanding product variety, short product life cycle, increasing outsourcing, globalization of businesses, and continuous advances in information technology. The Internet has contributed to both the increasing needs and opportunities for improved supply chain management. With the Internet, companies in a supply chain can be connected in real time with information and knowledge shared continuously, new products and services can be designed to fit special market segments, and new supply chain structures can be developed to serve customers in a more direct manner. S When a company faces the pressure of excessive inventory, degraded customer service, escalating costs and declining profits, or a poor return on assets, its supply chain is out of control. On the other hand, when a company moves in to new markets or new technologies, it must have its supply chain prepared for the new business challenges and opportunities. Although there are many new supply chain concepts and fads designed to exploit the advantages of the Internet, successful companies understand that the right supply chain strategy is dependent on a number of factors: ▪ The strategy needs to be tailored to meet specific...
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...Just in Time for the Holidays * Eric J. McNulty FROM THE DECEMBER 2005 ISSUE * SAVE * SHARE * COMMENT * TEXT SIZE * PRINT * 8.95 BUY COPIES Just in Time for the Holidays VIEW MORE FROM THE December 2005 Issue EXPLORE THE ARCHIVE RECOMMENDED * ------------------------------------------------- ------------------------------------------------- Just in Time for the Holidays (HBR Case Study and Commentary) ------------------------------------------------- TECHNOLOGY & OPERATIONSHBR CASE AND COMMENTARY * ------------------------------------------------- Eric McNulty, M. Eric Johnson, Horst Brandstatter, Warren H. Hausman, Anne Omrod ------------------------------------------------- 8.95 ADD TO CART * ------------------------------------------------- SAVE ------------------------------------------------- * ------------------------------------------------- SHARE * ------------------------------------------------- ------------------------------------------------- Just in Time for the Holidays (HBR Case Study) ------------------------------------------------- STRATEGY & EXECUTION HBR CASE * ------------------------------------------------- Eric McNulty ------------------------------------------------- 8.95 ADD TO CART * ------------------------------------------------- SAVE ------------------------------------------------- * ------------------------------------------------- ...
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