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    HP Deskjet Case Solution1 HP Deskjet Case Solution1

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    HP Deskjet Case Solution1 HP Deskjet Case Solution1

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    HP Deskjet Case Solution1 HP Deskjet Case Solution1

    Uploaded by

    Tun Thu Lin

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    HP deskjet case solution1

    Operations Management (Indian Institutes of Management)

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    Presentation on theme: "Hewlett-Packard: DeskJet Printer Supply Chain"—


    Presentation transcript:

    1 Hewlett-Packard: DeskJet Printer Supply


    Chain
    Coordinated Product and Supply Chain Design

    2 BACKGROUND HP was founded in 1939 William Hawlett and David Packard


    In 1990, 50 operations, Revenues of $13.2 billion and Net income of $739 million
    Six Products Groups
    The Peripheral Group was the 2nd largest
    Printers, Plotters, Magnetic Disks, Terminals

    3 PRINTER MARKET
    In 1990, 17 million units of workgroup and personal printers, $10 billion
    40% impact/dot matrix
    40% laser
    20% inkjet
    By 1990, customers became aware of inkjet printers (cheap and high quality)
    HP and Canon pionereed ink-jet technology

    4 The DeskJet Printer Introduced in 1988


    In 1990, sold 600,000 units, $400 million
    Mission statment:
    To become the recognized world leader in low cost premium quality printers for o ces and
    homes
    Main division is located Vancouver
    Consolidating four divisions
    Colorado, Idaho, California, Oregon

    5 Manufacturing Printer
    In 1979, Manufacturing Cycle is 8 to 12 weeks
    3.5 months of inventory
    In 1981, Just-in-Time strategy had been introduced
    Reduced inventory from 3.5 months to 0.9 months
    However, this strategy and production system were not used e ciently.
    Bob Foucoult: “We were all dressed up but no one to take us to the dance””

    6 Manufacturing Printer
    In 1988, this innovetive product line was used e ectively, with new model “DeskJet printer”
    With this new model, nearly-letter-quality resolution is obtained and standard paper was
    used.
    HP has already had knowledge and implementation for the ink-jet technology and also
    streamlined manufacturing process
    All these capabilities gave the HP chance become the market leader in the ink-jet printer
    market.

    7 The DeskJet Supply Chain


    Supplier, manufacturing facility, distribution centers, dealers, and customers
    Manufacturing is done by HP, in Vancouver
    Two stages of manufacturing
    Printed circuit board assembly and test (PCAT)
    Final assembly and test (FAT)
    Three Distribution Centers
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    US, Europe, Far East (shipping to Europe and Far East by ocean)
    Localization
    For Europe and Far East, printer has to be customized (language and power supply req.)

    8 The DeskJet Supply Chain


    Factory Cycle Time
    Through PCAT and FAT, about a week
    Transportation
    From Vancouver to US DC, about a day
    From Vancouver to Far East DC and Europe DC, 4-5 weeks
    Just-in-Time strategy
    Make-to-Stock
    Target inventory level=Forecasted Sales+Safe Stock

    9 The DeskJet Supply Chain


    Three major sources of uncertainty a ecting supply chain
    Delivery of incoming materials (late shipment, wrong part)
    Internal process (Equipment E ciency, Machine Downtimes)
    Demand
    Delivery of incoming materials and internal process have an impact on manufacturing lead
    time
    Demand has an impact on inventory

    10 The DeskJet Supply Chain


    The Distribution Process
    Perfomance Measures: Inventory Level and Distribution Cost per gross shipment dollar
    Major Costs: Outbound Frieght and Salaries
    Distribution Center’s Process
    Receive nal products from supplier and store them
    Retrieve products which is needed to satisfy the orders of customer
    Arrange and pack the order, make it ready to be sent to customer
    Ship the order with proper transportation vehicle
    The Main issue is if the DC is operated as warehousing or integration

    11 Problems and Issues


    Determine the right level of inventory (best safety stock amount) and provide high level of
    service is a big challenge
    Find the best way to satisfy customer while minimizing inventory
    Reduce the uncertainty caused by delivery of incoming materials, impoving manufacturing
    and equipment e ciency, reduce downtimes
    Improve the forecast accuracy

    12 Problems and Issues Forecast errors, especially in Europe


    Product shortages and piled up inventory
    Safety Stock Rules fail a lot, not meet the target inventory
    Inconsistent inventory level causes unsatis ed customer and loss of sales
    Various demands from the three regions (US, Europe and Far East) and
    analyze/consolide/interprate demands and customer behaviour

    13 Problems and Issues Transportation Inventory


    It takes long time to ship products from US to Europe and Far East
    If there is a shortage in Europe and Far East, it is hard to x it
    Reduce transportation lead time in order to diminish long replenishment lead time
    Inventory
    Increase or utilize the current capacity
    Similar to establishing new inventory, analyze whether a plant is set up in Europe or not

    14 Solutions Make the forecast more accurate

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    Collecting related data month by month for every single product, and also examine
    aggregate demand
    To be prapared to manufacture customized power supply and manual
    Anaylze HP and competitor’s sales of previous years
    De ne an average sale of each month, calculate standard deviation, be aware of trends
    Similarly, data loss of sales, stock outs, and backorders have to be examined
    This research has to be done especially for Europe Market and European customer behavior
    Customer surveys and analyze expectation/satisfaction

    15 Solutions Making the forecast more accurate provides some bene ts


    More accurate forecast provides more reliably safety stock level and reduce amount of
    unnecessary products stocked in inventory
    Reduce the replenishment lead time
    Reduce unsold products, it is crucial because product’s technologic clock speed is high
    Reduce inventory holding cost and cost of unsold products
    Avoid stockouts, unsatis ed demand, loss of customer

    16 Solutions Increase the capacity of inventory


    Analyze the cost of lost sales
    European DC runs out of space to store as DC tells and complains
    If investing on a new inventory diminishes the lost sales and it is more pro table
    Revise safety stock rules, so the target inventory levels that is sum of safety stock and
    forecast

    17 Solutions Establishing a new facility


    Since the transportation lead time is long, in order to satisfy customer’s demand, setting up a
    plant might be a solution, similar to set up a new inventory
    Since the forecast is not good in Europe, to decide whether factory is opened or not,
    European sales and market have to be examined precisely and volume of production should
    be worth it
    It is possible to revise the DC that is operated to complete the integration of printers, not to
    manufacture a printer from a rough

    18 Solutions Transportion
    It is very long time to transport products from US to Europe and Far East
    Vessels are chosen as transportation vehicle
    Air transportation would shorten the lead time and make the company ready to satisfy
    customer

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