Hp Deskjet Case Vancouver
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Executive Summary
As a trusted advisors to Manager of Special projects in the materials department of HP, we will be advising to Brent Cartier related to supply chain management issues of the company. This report exhibits the detailed analysis of the various operations of the company and also suggest some solutions to overcome from supply chain problem in different regions. Our ultimate objective is to recommend a viable solution which can help HP for long term.
HP is using differentiation as their main competitive strategy. The following are some critical factors which are responsible for their success:
Technical Standards: To distinguish the products from the rivals HP group always maintain and establish their technical standards. They have a deal with Peripheral Group related to the disposable print headsets.
Old Goodwill: HP was founded in 1939 by William Hewlett and David Packard diversifying from its base in electronic test and measurement equipment into computers and peripheral products. In 1990, HP had over 50 operational units across the world with revenues of $13.2 billion.
Strategic Business unit: Each division of the group act as SBU and independently handle their operations. All SBUs deal in numerous kinds of products like printers, plotters, magnetic discs, tap drives and terminal and network products.
By analysing the current situation in detail, I would like to recommend that to decrease lead time in the Europe, the company should use Air transportation which will decrease lead time to one week. It would have following effect.
Options
Lead Time (in weeks)
Safety Stock
Reorder Point
41.9
200.4
297.0
5528.4
9167.5
1148.5
1677.5
2166.9
3134.5
101.4
171.9
It is clear from the table that the level of safety stock and reorder point will be decrease by 75%. Hence, inventory holding cost will be decrease by 25% per annum.
Cost: It would cost to company $ 1 million annually on the basis of forecasting (Air freight , n.d.).
Benefit:
Inventory level would be improved by air freight (21523 units to 9177.5 units)
Decrease in lead time.
Justification: I would like to justify my recommendation by highlighting below mention points:
This solution is easy to implement for the company at this present situation.
This solution addresses the root cause of the problems of HP.
This solution is cost effective.
This solution is long lasting and it would take less time to implement this.
The below implementation plan should be followed step by step to implement the recommended solution.
On Monday morning Brent has to review the recommended inventory levels in the meeting at 11 am with Billy, Laura, Jim and Jose
On Monday afternoon he has to discuss the recommended inventory levels with his materials manager and manufacturing manager.
Any issues or recommendations should be analysed.
At 2 pm Brent should share the report with US DC materials manager.
In next one week Brent should get approval from every manager who is responsible.
After that, for 10 days the top management should discuss about the air shipments and finalize the shipment company.
Next, within 5 days the HP Company has to document all the report.
Once the documentation is done the new project should be signed off legally and the operations should be executed accordingly.
Figure 1: Gantt chart
HP Company has to reduce the lead time to 8 days with the help of air shipments in order to minimize the inventory and at the same time maintain high availability of printers to the consumers. The recommended solution should be executed as per the implementation plan provided to overcome the current challenges.
Introduction
As a trusted advisors to Manager of Special projects in the materials department of HP, we will be advising to Brent Cartier related to supply chain management issues of the company. This report exhibits the detailed analysis of the various operations of the company and also suggest some solutions to overcome from supply chain problem in different regions. Our ultimate objective is to recommend a viable solution which can help HP for long term.
Critical Success Factors
HP is using differentiation as their main competitive strategy. The following are some critical factors which are responsible for their success:
Technical Standards: To distinguish the products from the rivals HP group always maintain and establish their technical standards. They have a deal with Peripheral Group related to the disposable print headsets.
Old Goodwill: HP was founded in 1939 by William Hewlett and David Packard diversifying from its base in electronic test and measurement equipment into computers and peripheral products. In 1990, HP had over 50 operational units across the world with revenues of $13.2 billion.
Strategic Business unit: Each division of the group act as SBU and independently handle their operations. All SBUs deal in numerous kinds of products like printers, plotters, magnetic discs, tap drives and terminal and network products.
Problem Statement
HP is facing following problems related to DeskJet supply chain problems:
Poor Forecasting System: The major issue faced by the company is that they do not have reliable forecasting system. Due to this, they are facing various problems in their different regions.
Improper Safety Stock Methodology: All the regions are not giving required importance to safety stock and hence they are facing problems because of this. There are fluctuations in inventory level in all the regions as