In What Way Is a Universal Power Supply a Postponement Strategy?

Previously printers that were launched in North American and European market have distinct power supplies, North Americans, a 110 volts and for Europeans printers, a 220 volts power supply was added.

Postponement strategy allows business to take benefit of offshore capacity to local finish centers for final assembly, packaging and distribution.

The universal power supply was a postponement strategy by delaying the regional allocation decision by two and a half months. If a universal power supply is used, then HP would have the flexibility of postponing the specification of the printer engine by at least two months in planning process.

Cost

1. Universal supply would increase cost by $30 per unit

2. I think changing to a universal power supply is a fantastic idea if it does not add cost to the product. Customers will not pay for features that they don’t need, and universal power supply is irrelevant to them.

3. Reconfiguring the product with a different power supply is a real pain. HP have to purchase new power supplies rated at the correct voltage, ship the printers across the Atlantic from the undersold region, swap the power supply, change the fuser electronic circuit and the fuser bulb, and, finally, distribute the product to retailers.

4. Approximately $13.5 million in additional material costs.

Benefits

1. Improvement in order fulfillment will strengthen HP's competitiveness

2. Increase customer satisfaction and reduce expenses, so this is an area of great urgency. Along with improving profitability, it’s our top priority.

3. Fewer stock outs

4. Fewer Lost Sales

5. Less safety stock required

6. Fewer expedited shipments

7. Eliminate re-configuration work

Product life cycles were continually shrinking, the entire life cycle of the product is at most 18 months. Four and a half months lead time in an 18 month market

The product life cycle of printers can be divided into three stages; ramp-up, maturity and end-of-life, the Cost and benefits will be keep changing over the different stages of product life cycle

The ramp-up period is the time from the initial introduction of the product until HP's production volume levels off. During this stage the product is usually the only printer on the market providing its distinctive features. The maturity stage reflects a period of increasing competition. Comparable printers will be introduced and price will become a more influential aspect of the product market. In the end-of-life stage, there is fierce competition on all fronts.