Hewlett-packard Final Ppt
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Hewlett-Packard: Creating a Virtual Supply Chain
Group Members • Mirza Muhammad Qayyum Baig • Bashir Ahmad Waseem
The Case • What is Hewlett-Packard? – Global provider of computing and imaging solutions and services for business and home – 89,000 employees – Annual turnover: US$ 48.8 billion
The Case 14%
3% Printing Systems
41%
Computing Systems IT Services Others
42%
The Case • Tape Drive Business Unit HP
Imaging & Printing Systems
Computing Systems
IT Services
Storage Division
Tape Drive Unit
Other Business
• Market Situation: – Very fast expanding storage market – Market Share of HP: 55% – Product Lifecycle: 4 years (relatively short) – Qualifying Criteria of Product: Quality
Supply Chain For DDS Products • Supply Chain For DDS Products
Distribution Center (HP)
Mechanism & Head FAST PCA
Reseller Consumer
Config. OEM
• History Players in the Outsourced Supply Chain with Different Models of DDS
Model
Start
Mechanism & Head
PCA
FAST
Configuration
DDS1
1990
Sony
CM A
HP Bristol
HP Bristol
DDS2
1997
Mitsumi
CM A
CM A (Scotland)
CM A (Ireland)
DDS3
1998
Mitsumi
CM B
CM A (Scotland)
CM A (Ireland)
DDS4
1999
Mitsumi
CM A
Mitsumi
CM A (Ireland)
CM = Contract Manufacturer
Alternatives • Alternative 1: Path of Least Resistance • The Ultimate Supply Chain • Consolidation
Alternative 1 • Path of Least Resistance – Production parts that are outsourced to Philips: • FAST • Configuration • Distribution Distribution Center (HP)
Mechanism & Head FAST PCA
Reseller Consumer
Config. OEM
Alternative 2 • The Ultimate Supply Chain – Whole supply chain fulfilled by Mitsumi
Distribution Center (HP)
Mechanism & Head FAST PCA
Reseller Consumer
Config. OEM
Alternative 3 • Consolidation – Collaborating with a competitor in all steps of the production Distribution Center (HP)
Mechanism & Head FAST PCA
Reseller Consumer
Config. OEM
Evaluation Criteria
Alternative 1
Alternative 2
Alternative 3
Path of Least Resistance
The Ultimate Supply Chain
Consolidation
Flexibility
high
high
medium
Investment
low
medium
medium
Production Costs
high
low
medium
Financial Risk
low
low
medium
Loss of Know How
medium
medium
medium
Dependency
high
very high
high
Decision for HP • The Ultimate Supply Chain – Whole supply chain fulfilled by Mitsumi Criteria
Alternative 2
Flexibility
high
Investment
medium
Production Costs
Low
Financial Risk
low
Loss of Know How
medium
Dependency
very high
The Ultimate Supply Chain – Mitsumi reliable manufacturer over years – Low financial risk – No investments in machinery necessary – Know How is kept at HP – High flexibility
Group Members • Mirza Muhammad Qayyum Baig • Bashir Ahmad Waseem
The Case • What is Hewlett-Packard? – Global provider of computing and imaging solutions and services for business and home – 89,000 employees – Annual turnover: US$ 48.8 billion
The Case 14%
3% Printing Systems
41%
Computing Systems IT Services Others
42%
The Case • Tape Drive Business Unit HP
Imaging & Printing Systems
Computing Systems
IT Services
Storage Division
Tape Drive Unit
Other Business
• Market Situation: – Very fast expanding storage market – Market Share of HP: 55% – Product Lifecycle: 4 years (relatively short) – Qualifying Criteria of Product: Quality
Supply Chain For DDS Products • Supply Chain For DDS Products
Distribution Center (HP)
Mechanism & Head FAST PCA
Reseller Consumer
Config. OEM
• History Players in the Outsourced Supply Chain with Different Models of DDS
Model
Start
Mechanism & Head
PCA
FAST
Configuration
DDS1
1990
Sony
CM A
HP Bristol
HP Bristol
DDS2
1997
Mitsumi
CM A
CM A (Scotland)
CM A (Ireland)
DDS3
1998
Mitsumi
CM B
CM A (Scotland)
CM A (Ireland)
DDS4
1999
Mitsumi
CM A
Mitsumi
CM A (Ireland)
CM = Contract Manufacturer
Alternatives • Alternative 1: Path of Least Resistance • The Ultimate Supply Chain • Consolidation
Alternative 1 • Path of Least Resistance – Production parts that are outsourced to Philips: • FAST • Configuration • Distribution Distribution Center (HP)
Mechanism & Head FAST PCA
Reseller Consumer
Config. OEM
Alternative 2 • The Ultimate Supply Chain – Whole supply chain fulfilled by Mitsumi
Distribution Center (HP)
Mechanism & Head FAST PCA
Reseller Consumer
Config. OEM
Alternative 3 • Consolidation – Collaborating with a competitor in all steps of the production Distribution Center (HP)
Mechanism & Head FAST PCA
Reseller Consumer
Config. OEM
Evaluation Criteria
Alternative 1
Alternative 2
Alternative 3
Path of Least Resistance
The Ultimate Supply Chain
Consolidation
Flexibility
high
high
medium
Investment
low
medium
medium
Production Costs
high
low
medium
Financial Risk
low
low
medium
Loss of Know How
medium
medium
medium
Dependency
high
very high
high
Decision for HP • The Ultimate Supply Chain – Whole supply chain fulfilled by Mitsumi Criteria
Alternative 2
Flexibility
high
Investment
medium
Production Costs
Low
Financial Risk
low
Loss of Know How
medium
Dependency
very high
The Ultimate Supply Chain – Mitsumi reliable manufacturer over years – Low financial risk – No investments in machinery necessary – Know How is kept at HP – High flexibility
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