Hp Deskjet- Supply Chain

HP Deskjet- Supply Chain Group – 9

Muralikrishna Badrianth G.M. Saurabh Kumar Piramanayagam Richie Giftson Paul

About HP Supplying high quality electronic tools from

1939 Diversification with strong technological

innovations with the advent of computer technology

Retail printer market in 1990 had reached a

size of about $10 billion

The product: inkjet printers Started as an economic

alternative to laser printers in 1988 pioneered by HP and Canon in 1980s Were getting commoditized quickly, thus getting differentiated on the basis of general business criteria such as cost and availability

Role of the Vancouver division Established in 1979 by HP to consolidate all its

printer manufacturing operations Was the first US plant to successfully

implement JIT and Kanban

Operated successfully with inventory levels of

just 0.9 months- down from previous levels of 3.5 months

The DeskJet supply chain

1.PCA T

2. FAT

3.Localizati on

The DeskJet supply chain contd… No buffer inventory kept between PCAT and FAT

stage Factory cycle time: 1 week Shipping from Vancouver facility to U.S. DC: 1 day Shipping from U.S. DC to regional suppliers in Asia, Europe: 4-5 weeks Dealers kept very little inventory, hence pressure on Vancouver to maintain high levels of finished goods inventory

Problems High demand fluctuations in European markets

leading to higher levels of safety stocks Long lead times due to transport using ships

and this in turn forecasting process

adds

difficulty

to

the

Extra inventory in some cases and backorder in

others in European market

Balance between inventory level and Service

Level

Objective To Decrease inventory level while maintaining

service level ( 98 %)

Possible Solutions 1. Sophisticated safety stock calculation method 2. Air Shipment – Expensive 3. Postponement Strategy / Assemble to Order / Standardization: Stock standard subassemblies in Europe and assemble localized features according to local demand Aggregate demand – Lesser uncertainties

Possible Solutions 4. European Factory – sufficient demand ?? 5. Introducing a generic model for worldwide sales: higher prices but demand uncertainty to be very low-success in a generic market?? 5. Improve forecasting method - Difficult to implement

Postponement Strategy Vancouver Division PCAT

FAT

Vancouver Division PCAT

FAT

European D.C Localizati on

Custom er

European D.C Localizati on

Custom er

Postponement Strategy

Advantages of Postponement Reduction in Safety Stock by over 6000 units

due to lesser uncertainty in Aggregate demand Lesser carrying and transit cost due to compact packaging Localized feature can be sourced locally to further reduce costs Both Backorder and Inventory Level is reduced Better Line item Fill rate (LIFR) and Order Fill Rate (OFR)

Adjustments needed Distribution centers should have assembling

facilities Need of skilled workers Standard Design to be reconsidered taking into account:  Ease of final assembly during localization  A compact design for efficient packaging

Thank You!!!!

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