HP Deskjet Case Study

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HP Deskjet case study solution


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HP Deskjet Case Study : 

By: Mohd. Zubair Saifi (32237) HP Deskjet Case Study

Introduction : 

Introduction Mohd. Zubair Saifi, SIBM-Pune 2 In 1990’s, Hewlett-Packard faced several problems with inventory levels for the DeskJet Printer product line. This printer was produced in Vancouver’s facility and from there was shipped to a distribution center. HP has three distribution centers (DC) North America Asia Pacific and Europe

Deskjet Supply Chain : 

Deskjet Supply Chain Mohd. Zubair Saifi, SIBM-Pune 3

Cycle time for production and distribution : 

Cycle time for production and distribution Mohd. Zubair Saifi, SIBM-Pune 4 Factory Cycle Time US DC Europe Asia 1 Week 4 – 5 Weeks

Problem : 

Problem Mohd. Zubair Saifi, SIBM-Pune 5 Satisfy customer requirements by holding minimum inventory Bring a consensus amongst various division about inventory levels Marketing wants 98% product availability Distribution wants minimum inventory Sources of uncertainties Delivery of incoming material Internal Processes Demand

Bad Solution - Forecasting : 

Bad Solution - Forecasting Mohd. Zubair Saifi, SIBM-Pune 6 Forecasting is generally not reliable Longer forecasting horizon makes forecast worse Aggregate forecasts are much accurate In case of HP deskjet case the problem is more serious because Higher Inventory carrying costs in case of HP case varying from 12% to 60% In technology products, chances of obsolescence are higher

Europe : 

Europe Mohd. Zubair Saifi, SIBM-Pune 7

Asia Pacific : 

Asia Pacific Mohd. Zubair Saifi, SIBM-Pune 8

North America : 

North America Mohd. Zubair Saifi, SIBM-Pune 9

Inventory Costs : 

Inventory Costs Mohd. Zubair Saifi, SIBM-Pune 10

Slide 11: 

Mohd. Zubair Saifi, SIBM-Pune 11

Postponement : 

Postponement Mohd. Zubair Saifi, SIBM-Pune 12 Postponement means delay in product differentiation Supply Chain costs can be divided into two parts Physical Costs Cost of Production, Transportation, Inventory storage etc. Market Mediation Costs When supply exceeds demand then product is marked down and sold When demand exceeds supply then it results in dissatisfaction and lost opportunities

In HP deskjet case study : 

In HP deskjet case study Mohd. Zubair Saifi, SIBM-Pune 13 Basic product should be made at Vancouver plant in USA Final Assembly and differentiation to be done at DCs DCs should be provided with complete processes for assembly of products It will help company fight demand variations in a better way HP can now support more number of models

References : 

References Mohd. Zubair Saifi, SIBM-Pune 14 “Postponement project work paper” – MIT center for transportation and logistics, Version: Feb 23, 2005 http://www.business-around-the-globe.com/freecartoons/freecartoons.html, retrieved on 16th Dec, 2009

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