Hewlett Packard Company Deskjet Printer Supply Chain

HP Co. Deskjet Printer Supply Chain Case

Introduction:

The company was founded in a one-car garage in Palo Alto by William Bill Redington Hewlett and David Dave Packard starting with a line of electronic test equipment. HP was the world’s leading PC manufacturer from 2007 to Q2 2013, after which Lenovo remained ranked ahead of HP. It specializes in developing and manufacturing computing, data storage, and networking hardware, designing software and delivering services. Major product lines include personal computing devices, enterprise and industry standard serves, related storage devices, networking products, software and a diverse range of printers and other imaging products. HP markets its products to households, small-to medium-sized businesses and enterprises directly as well as via online distribution, consumer-electronics and office-supply retailers, software partners and major technology vendors. HP also has services and consulting business around its products and partner products. On October 6, 2014, Hewlett-Packard announced plans to split the PC and printer’s business from its enterprise products and services business. The split is expected to close by October 2015 and will result in two publicly traded companies: Hewlett-Packard Enterprise and HP, Inc.

Background:

• HP was founded in 1939.

• Founded by William Hewlett and David Packard

• In 1990, 50 operations, Revenues of $13.2 billion and Net income of $739 million

• Six Products Groups

• The Peripheral Group was the 2nd largest

• Printers, Plotters, Magnetic Disks, Terminals.

• Printer Market: In 1990, 17 million units of workgroup and personal printers, $10 billion

• 40% impact/dot matrix

• 40% laser

• 20% inkjet

• By 1990, customers became aware of inkjet printers (cheap and high quality)

• HP and canon pioneered the ink-jet technology

• The Desk-Jet Printer: Introduced in 1988

• In 1990, sold 600,000 units, $400 million

• Mission statement: To become the recognized world leader in low cost premium quality printers for offices and homes.

• Main division is located in Vancouver

• Consolidating of four divisions 1) Colorado 2) Idaho 3) California 4) Oregon.

• Manufacturing Printer: In 1979, Manufacturing Cycle is 8 to 12 weeks

• 3.5 months of inventory

• In 1981, just-in-time strategy had been introduced

• Reduced inventory from 3.5 months to 0.9 months

• However, this strategy and production system was not used efficiently.

• In 1988, this innovative product line was used effectively, with new model “Deskjet printer”

• With this new model, nearly-letter-quality resolution is obtained and standard paper was used.

• HP has already had knowledge and implementation for the ink-jet technology and also streamlined manufacturing process

• All these capabilities gave the HP chance become the market leader in the ink-jet printer market.

Problems and Issues:

In the case of HP so as to address the issue related to European factory, better forecasting and more inventory 3 Proposals have been identified which includes:

1) Air-freighting printers to Europe

2) Developing more formalized inventory planning processes

3) Building a factory in Europe.

The Pros & Cons of the 3 Proposals are:

- Air-freighting printers to Europe:

Pros: This can be considered as the fastest means of transporting the inventory. To maintain high level of inventory continuous and fastest means of supply of the product is essential. Through this availability of the product can be guaranteed without any wastage of time.

Cons: The changes in the weather can affect this method of inventory transportation. The rise in the airfreight charges can also affect the cost of the goods.

- Developing more formalized inventory planning processes:

Pros: Inventory planning process can provide the organization a long-term inventory