Brushing up HBR fundamentals will provide a strong base for investigative reading. Often readers scan through the business case study without having a clear map in mind. This leads to unstructured learning process resulting in missed details and at worse wrong conclusions.
Printers, Plotters, Magnetic disc and tape drivers, Terminals and Network productsPrinter Supply ChainSynopsis of the Case In the given case during the early s, the famous manufacturer of computers and peripherals, Hewlett-Packard HPfaced several severe problems concerning the inventory management of its very successful DeskJet printer.
The printer was produced in HPs production facility in Vancouver. The completely finished product was sorted there and then shipped to one of the three distribution centers in North America, Asia and Europe. To guarantee high product availability to the dealers, HP operated its distribution centers DCs in a make-to-stock mode.
Therefore the DCs acted as inventory stocking points between the manufacturing site and the dealers who sell the printers to the end-customer.
Under increasing competitors pressure the DCs were forced to hold extremely high safety stocks to ensure high service levels. Despite the high safety stock not all customer demands could be satisfied.
One of the basic causes of the crisis was the magnitude of forecast errors. Besides this, safety stock levels were determined by a judgemental rule of thumb which, together with the inaccurate forecasts, resulted in simultaneously high inventory levels and high backorders.
The inventory policy was not based on any scientific rule. Furthermore, neither the choice of inventory carrying costs nor the choice of the target line item fill rate as key figures for a sensible and rational inventory policy was defined clearly.
There was no coordination between the different divisions of HP and the inventory policy did not implement the figures accurately.
Due to the long lead time of 4 to 5 weeks caused by ocean freight, the DCs were not able to react flexible enough to unexpected changes in product mix and consumer needs. In the fast-moving computer technology market products tend to become obsolete within a short time.
The inflexible transportation mode is not able to cope with that, thereby causing high inventory levels but at the same time high backorders because the inventory stored does not correspond to the latest trends in the market.
What stroke immediately were the consequences of lost sales which reduced revenues.
The cost accounting and financial reporting were not transparent enough to dispose processes effectively. As the different markets, especially in Europe and Asia, have different requirements for the printer, the product has to be manufactured in many different variants. Although it is the same product in each country, the localization leads to variety which is another reason for high inventory levels.
The need for adding country specific power supply modules with the correct voltage and plugs as well as the appropriate manual in a specific language to the printer makes determining appropriate demand-tracking production volumes difficult.
It is easier to forecast the total demand of all three markets for a generic product than to forecast country specific demand. In order to reduce inventory and improve the service level resulting in the realization of HPs mission statement to become a Recognized World Leader in Low Cost Premium Quality Printers, countermeasures have to cover the three main uncertainties affecting the supply chain: Delivery of materials wrong parts, late shipments 2.
Internal process process yields and machine downtimes 3. Issues Significant uncertainty Too many localization option Long lead times Too much inventory in the DeskJet supply chain Some suggest pumping up more inventory European and Asian DCs cannot meet because of mismatch.
Analysis In the early s, the DeskJet supply chain consisted of a network of suppliers, manufacturing sites, distribution centers DCsdealers, and customers see Chart 4. The manufacturing process, comprising two key stages, was executed by HP in Vancouver. In the first step - printed circuit assembly PCAT - the electronic components were assembled and tested.
The second step, final assembly and test FATthen involved the assembly of other subassemblies as well as the final testing. The localization of the printers was performed in the FAT-phase at the factory, meaning the appropriate power supply module and power plug as well as the manual written in the appropriate language were added to the printer.
case study explanation, which is published at HBR, and in a book called Design & Managing Supply Chain benjaminpohle.com://benjaminpohle.com /Hewlett-Packard-DeskJet-Supply-Chain.
HewlettPackard Co DeskJet Printer Supply Chain B Case Study Solution & Analysis In most courses studied at Harvard Business schools, students are provided with a case study. Major HBR cases concerns on a whole industry, a whole organization or some part of organization; profitable or non-profitable benjaminpohle.com://benjaminpohle.com · Dr.
Laura Kopczak and Professor Hau Lee of Stanford University prepared this case as the basis for class discussion rather than Hewlett-Packard Company DeskJet Printer Supply Chain (A) INTRODUCTION Hewlett-Packard Company was founded in benjaminpohle.com deskjet supply benjaminpohle.com Hewlett-Packard Co.: DeskJet Printer Supply Chain (B) case study solution, Hewlett-Packard Co.: DeskJet Printer Supply Chain (B) case study analysis, Subjects Covered Inventory management Supply chain management by Laura Rock Kopczak, Hau Lee Source: Stanford Graduate School of benjaminpohle.com Hewlett-Packard Company DeskJet Printer Supply Chain Summary Hewlett-Packard is company dedicated to manufacture computers and peripheral products.
It was founded in by William Hewlett and David Packard.