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HP DeskJet Printers Supply Chain

HP DeskJet Printers Supply Chain. A case on Basestock Levels and Postponement. HP DeskJet Printers Then and Now. The first DeskJet printer. Mobile printer. Color printer. Photo printer. History of HP. HP founded in 1939 by William Hewlett and David Packard

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HP DeskJet Printers Supply Chain

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  1. HP DeskJet Printers Supply Chain A case on Basestock Levels and Postponement

  2. HP DeskJet PrintersThen and Now The first DeskJet printer Mobile printer Color printer Photo printer

  3. History of HP • HP founded in 1939 by William Hewlett and David Packard • 1990 revenues $13.2 B and profit $739 M • Then, a manufacturer of electronic test and measurement equipment • Now, mostly manufactures computers and peripherals • Peripherals is the second largest group among six product groups • Peripherals: Printers, Plotters, Magnetic disc and tape drivers, Terminals and Network products HP Radio Oscillator circa 1939

  4. Printer Market • HP sold ?? M printers and made a revenue of $?? B in 1990 • Each printer about $??? • But prices has been dropping • Printers are becoming a commodity sold at supermarket • Market is composed of • ??% impact/dot matrix, dropping • ??% inkjet, increasing; HP is the market leader • ??% laser

  5. Vancouver Plant • Printer production at Fort Collins, CO, Boise, ID, Sunnyvale, CA and Corvallis, OR is consolidated to the Vancouver site • Vancouver plant uses a pull system • JIT, Kanban, Stockless production • Vancouver had the proper production system • DeskJet printer became its flagship product

  6. Printer Supply Chain ?? Lead time Asia DC Supplier IC Mfg Europe DC Supplier PCAT FAT Print Mechanism Far East DC Supplier Supplier

  7. What is Brent Cartier’s problem?

  8. Brent Cartier’s problem • Too much inventory in the DeskJet supply chain • Some suggest pumping up more inventory • European and Asian DCs cannot meet because of ????? mismatch.

  9. DCs operate as a push or a pull system? Asia DC Europe DC FAT Far East DC

  10. What is localization?

  11. What is localization? • Customization of a printer to meet the language and power supply requirements of the local countries • Product manuals • Several power cords • Where is localization done?

  12. Can a DC localize?

  13. Can a DC localize? • DCs do not have a ???? ???? system for assembly operations • US DC manager To Beal says: • [At a DC] We have to decide what our core competency is …. If we want to take on manufacturing processes here, we have to put processes in place to support them • In conclusion, DC managers are for/against (??) localizing at DCs.

  14. What is inventory imbalance?

  15. Inventory imbalance • Start with an example: • There are 1000 DeskJet configured/packaged for France • Another 1000 for England • What is the shortage if the demand in France and England are both 1000 printers? • What is the shortage if the demand in France is 1500 while the demand in England is 500? • Inventory imbalance is having the correct amount of total inventory but the incorrect mixture

  16. Can localization at a DC avoid inventory imbalance?

  17. Can localization at a DC avoid inventory imbalance? • Continuing with the same example: • There are 2000 DeskJet ready for Europe • What is the shortage if the demand in France and England are both 1000 printers? • Shortage is ?? • What is the shortage if the demand in France is 1500 while the demand in England is 500? • Shortage is ?? • Not convinced yet, what is the effect of postponed localization on printer inventories?

  18. To convince ourselves more Consider options with monthly demand larger than 1000 in Exhibit 4. Compute the basestock levels for each product to achieve a fill rate of 98%. Note that basestock levels can be reduced if these options are aggregated into a single one. What would be the basestock level for this single product?

  19. Postponing localization to the DCs • Is the US DC manager right? • What problems are possible with localization at DCs? • How to avoid these problems?

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