(C7) HP Deskjet Printer Supply Chain

Hewlett-Packard :
DeskJet Printer Supply Chain
郭紋伶
郭有維
朱維禮
Kaushal Kishore (KK)
www.themegallery.com
Team Members
1 2 3 4
郭紋伶 KK
Contents
1 Introduction
2 Zero inventory
3 DeskJet supply chain
4 Distribution process
5 The inventory and service crisis
6
4 Conclusion
Company Logo
Introduction
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), in North America,
Asia Pacific and Europe that at the moment
were filled of DeskJet stock.
Company Logo
Introduction
HP need to reach an optimal solution that
balance the customers’ needs and keep a
low inventory level, getting an agreement
among the DC’s.
Company Logo
ZERO inventory
The Vancouver division and its quest for
zero inventory.
Just-in-time (JIT)
Reduced inventory from 3.5 months to 0.9
months.
The DeskJet Supply Chain
Supplier
Manufacturing sites
The DeskJet
Distribution centers
Supply Chain
Dealers
Customers
Company Logo

There were two key stages in manufacturing process:
Printed circuit board assembly and test

(PCAT)
 ASICs (application-specific integrated circuits)
 ROM (read-only memory )
Final assembly and test (FAT)
Company Logo
The Deskjet Supply Chain
No significant buffer inventories
Two key manufacturing

process
9
Localization
10
 These products were then sorted into three
groups destined for the three distribution centers:
North America, Europe, and Asia-Pacific

PCAT FAT Vancouver
1 week
1 day
U.S. DC
4~5 weeks
Europe Asia
11

 The management change
 DCs: make-to-stock mode
inventory level=forecasted sales + safety stock
level
 Manufacturing: pull mode
 3 major sources of uncertainty that could affect the
supply chain:
 Delivery of incoming materials
 Internal process
 Demand
Distribution process
Line item fill rate (LIFR)
Calculated as the total number of customer
order line items filled on time divided by the
total number of customer line items
attempted.
Order fill rate (OFR)

Based on orders completed, where an order
contains multiple line items.
Inventory level
 Safety stock (12% ~ 60%)
 Service level (98%)
Distribution cost
 Outbound freight
 salary
Company Logo
Step 4
Ship the order
by appropriate
Step 3 carrier.
Shrink-wrap the
Step 2
complete order
Pick the various and label it.
Step 1 products
needed to fill a
Receive customer order.
(complete)
products from
various
suppliers and
stock them.
Company Logo
The inventory and service crisis

Europe Problem
 Contained issues
• Safety stock
–Forecasting system
–Make-to-stock system
–Multiple products
• Long lead time


Safety Stock
Great variations in market demand,
keeping the firm’s target service level
(98% in this case), i.e., meeting
consumers’ requests with a higher
probability.
Company Logo

forecasting system
 Localization
 Inaccurate forecasts
 Uncoordinated and divided in terms of

inventory policy
Company Logo

 Make-to-stock system
Due to all the lacks in forecasts and to
long lead times, creates high levels of
inventory in the DC’s resulting in carrying
costs.
By using push system, HP has to
calculate at great length its inventory
levels avoiding stock-out and overstock.
Company Logo

Multiple products
This variety in products contributes to high
levels of inventory because there’s more
products to keep in safety stock and to
forecast expected demand.
Company Logo
Issues to be discussed
Long lead time
 Reduction in lead time, the standard deviation
of demand during lead and review time is
reduced.
 This is due to the fact that smaller lead-times
imply an absolute variation in demand,
smaller than with larger lead-times.
Air Shipment
Asian and European distribution centers
receive orders more frequently, they won’t
need to keep higher safety stocks when
compared to sea transportation.
New Plant
Another alternative would be to install a
new plant somewhere between Europe
and Asia. This would allow for smaller
transportation costs and lead times.
Company Logo
ERP System
Another proposal has to do with the
implementation of an Enterprise Resource
Planning (ERP) system
Conclusion
Improve forecasting system
Reduce the lead time and safety stock

 Air shipment
 New Plant
ERP system

(C7) HP Deskjet Printer Supply Chain

Uploaded by

Document Information

Original Description:

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

(C7) HP Deskjet Printer Supply Chain

Uploaded by

Copyright:

Available Formats

Hewlett-Packard :

DeskJet Printer Supply Chain

3 DeskJet supply chain

5 The inventory and service crisis

In 1990’s, Hewlett-Packard faced several

The DeskJet Supply Chain

The DeskJet Supply Chain

Printed circuit board assembly and test

Final assembly and test (FAT)

No significant buffer inventories

Two key manufacturing

The DeskJet Supply Chain

Order fill rate (OFR)

The inventory and service crisis

• Long lead time

The inventory and service crisis

The inventory and service crisis

 Uncoordinated and divided in terms of

The inventory and service crisis

The inventory and service crisis

Reduce the lead time and safety stock

You might also like