1 / 18

Hewlett-Packard: DeskJet Printer Supply Chain

Hewlett-Packard: DeskJet Printer Supply Chain . Coordinated Product and Supply Chain Design. 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

liuz
Download Presentation

Hewlett-Packard: DeskJet Printer Supply Chain

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Hewlett-Packard: DeskJet Printer Supply Chain Coordinated Product and Supply Chain Design

  2. HP wasfounded in 1939 • William HawlettandDavidPackard • In 1990, 50 operations, Revenues of $13.2 billionand Net income of $739 million • SixProductsGroups • ThePeripheralGroupwasthe 2nd largest • Printers, Plotters, MagneticDisks, Terminals BACKGROUND

  3. In 1990, 17 millionunits of workgroupandpersonalprinters, $10 billion • 40% impact/dotmatrix • 40% laser • 20% inkjet • By 1990, customersbecameaware of inkjetprinters (cheapandhighquality) • HP andCanonpionereedink-jet technology PRINTER MARKET

  4. Introduced in 1988 • In 1990, sold 600,000 units, $400 million • Missionstatment: • Tobecometherecognizedworldleader in lowcostpremiumqualityprintersforofficesandhomes • Maindivision is locatedVancouver • Consolidatingfourdivisions • Colorado, Idaho, California, Oregon TheDeskJet Printer

  5. In 1979, ManufacturingCycle is 8 to 12 weeks • 3.5 months of inventory • In 1981, Just-in-Time strategy had beenintroduced • Reducedinventoryfrom 3.5 monthsto 0.9 months • However, thisstrategyandproductionsystemwere not usedefficiently. • Bob Foucoult: “Wewerealldressedup but no onetotake us tothedance”” Manufacturing Printer

  6. In 1988, thisinnovetiveproductlinewasusedeffectively, withnew model “DeskJet printer” • Withthisnew model, nearly-letter-qualityresolution is obtainedandstandardpaperwasused. • HP has already had knowledgeandimplementationfortheink-jet technologyandalsostreamlinedmanufacturingprocess • Allthesecapabilitiesgavethe HP chancebecomethe market leader in theink-jet printer market. Manufacturing Printer

  7. Supplier, manufacturing facility, distribution centers, dealers, andcustomers • Manufacturing is done by HP, in Vancouver • Twostages of manufacturing • Printedcircuit board assemblyand test (PCAT) • Final assemblyand test (FAT) • ThreeDistributionCenters • US, Europe, Far East (shippingtoEuropeand Far East byocean) • Localization • ForEuropeand Far East, printer has to be customized (languageandpowersupplyreq.) TheDeskJetSupplyChain

  8. FactoryCycle Time • Through PCAT and FAT, about a week • Transportation • FromVancouverto US DC, about a day • FromVancouverto Far East DC andEurope DC, 4-5 weeks • Just-in-Time strategy • Make-to-Stock • Targetinventorylevel=ForecastedSales+SafeStock TheDeskJetSupplyChain

  9. Threemajorsources of uncertaintyaffectingsupplychain • Delivery of incomingmaterials (lateshipment, wrongpart) • Internalprocess (EquipmentEfficiency, MachineDowntimes) • Demand • Delivery of incomingmaterialsandinternalprocesshave an impact on manufacturinglead time • Demand has an impact on inventory TheDeskJetSupplyChain

  10. TheDistributionProcess • PerfomanceMeasures: InventoryLevelandDistributionCostpergrossshipmentdollar • MajorCosts: OutboundFrieghtandSalaries • DistributionCenter’sProcess • Receive final productsfromsupplierandstorethem • Retrieveproductswhich is neededtosatisfytheorders of customer • Arrangeandpacktheorder, make it readyto be sent tocustomer • Shiptheorderwithpropertransportationvehicle • TheMainissue is ifthe DC is operated as warehousingorintegration TheDeskJetSupplyChain

  11. Determinetherightlevel of inventory (bestsafetystockamount) andprovidehighlevel of service is a bigchallenge • Findthebestwaytosatisfycustomerwhileminimizinginventory • Reducetheuncertaintycausedbydelivery of incomingmaterials, impovingmanufacturingandequipmentefficiency, reducedowntimes • Improvetheforecastaccuracy ProblemsandIssues

  12. Forecasterrors, especially in Europe • Productshortagesandpiledupinventory • SafetyStockRules fail a lot, not meetthetargetinventory • Inconsistentinventorylevelcausesunsatisfiedcustomerandloss of sales • Variousdemandsfromthethreeregions (US, Europeand Far East) andanalyze/consolide/interpratedemandsandcustomerbehaviour ProblemsandIssues

  13. Transportation • Ittakeslong time toshipproductsfrom US toEuropeand Far East • Ifthere is a shortage in Europeand Far East, it is hard tofix it • Reducetransportationlead time in ordertodiminishlongreplenishmentlead time • Inventory • Increaseorutilizethecurrentcapacity • Similartoestablishingnewinventory, analyzewhether a plant is set up in Europeor not ProblemsandIssues

  14. Make the forecast more accurate • Collecting relateddata month by month for every single product, andalsoexamineaggregatedemand • To be praparedtomanufacturecustomizedpowersupplyandmanual • Anaylze HP andcompetitor’ssales of previousyears • Define an averagesale of eachmonth, calculatestandarddeviation, be aware of trends • Similarly, data loss of sales, stockouts, andbackordershaveto be examined • This research has to be done especially for Europe Market and European customer behavior • Customersurveysandanalyzeexpectation/satisfaction Solutions

  15. Making the forecast more accurateprovidessomebenefits • More accurate forecast provides more reliably safety stock level and reduce amount of unnecessary productsstocked in inventory • Reducethereplenishmentlead time • Reduceunsoldproducts, it is crucialbecauseproduct’stechnologicclockspeed is high • Reduceinventory holding costandcost of unsoldproducts • Avoidstockouts, unsatisfieddemand, loss of customer Solutions

  16. 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 diminishesthe lost sales and it ismoreprofitable • Revisesafetystockrules, sothetargetinventorylevelsthat is sum of safetystockandforecast Solutions

  17. Establishing a newfacility • Since thetransportationlead time is long, in ordertosatisfycustomer’sdemand, settingup a plantmight be a solution, similarto set up a newinventory • Since theforecast is not good in Europe, todecidewhetherfactory is openedor not, Europeansalesand market haveto be examinedpreciselyandvolume of productionshould be worth it • It is possibletorevisethe DC that is operatedtocompletetheintegration of printers, not tomanufacture a printer from a rough Solutions

  18. Transportion • It is verylong time to transport productsfrom US toEuropeand Far East • Vesselsarechosen as transportationvehicle • Airtransportationwouldshortenthelead time andmakethecompanyreadytosatisfycustomer Solutions

More Related