HP Deskjet Case Study

By: Mohd. Zubair Saifi (32237)

This printer was produced in Vancouver·s facility and from there was shipped to a distribution center. y HP has three distribution centers (DC) y North America y Asia Pacific and y Europe 2 Mohd. Zubair Saifi.Introduction y In 1990·s. SIBM-Pune . Hewlett-Packard faced several problems with inventory levels for the DeskJet Printer product line.

Zubair Saifi. SIBM-Pune .Deskjet Supply Chain 3 Mohd.

Zubair Saifi.Cycle time for production and distribution Factory Cycle Time US DC Europe Asia 4 Mohd. SIBM-Pune .

SIBM-Pune 5 .Problem y Satisfy customer requirements by holding minimum inventory y Bring a consensus amongst various division about inventory levels y Marketing wants 98% product availability y Distribution wants minimum inventory y Sources of uncertainties y Delivery of incoming material y Internal Processes y Demand Mohd. Zubair Saifi.

SIBM-Pune .Bad Solution .Forecasting y Forecasting is generally not reliable y Longer forecasting horizon makes forecast worse y Aggregate forecasts are much accurate y In case of HP deskjet case the problem is more serious because y Higher Inventory carrying costs in case of HP case varying from 12% to 60% y In technology products. Zubair Saifi. chances of obsolescence are higher 6 Mohd.

96 Mohd.90 838. Zubair Saifi.98 27381.17 15830.58 103.Europe Europe A AA AB AQ AU AY Europe TOTAL 7 Average Std dev Average Inventory to support 98% sales 108.41 203.83 23108.58 32.12 6243.33 420.93 5624. SIBM-Pune .62 35932.17 4208.11 42.66 518.00 306.56 4700.08 2301.96 8735.58 1168.49 2204.

78 3472.83 604.58 1005.63 265.49 23.00 448.Asia Pacific Asia-Pacific A AB AG AK AU Average Std dev Average Inventory to support 98% sales 693. SIBM-Pune 8 .71 750.50 281.52 2247.92 31. 1931.49 555.06 877.67 Mohd.39 79.27 APAC TOTALZubair Saifi.53 114.25 1589.67 331.

11 76.56 7384.79 414.North America North America Average A AB AG AK AU Std dev Average Inventory to support 98% sales 41582.00 9 .12 Mohd.06 130.33 14.52 4.84 64.03 41777.17 2.67 16.26612.12 26432.17 146.47 12. SIBM-Pune NAM TOTAL Zubair Saifi.67 7377.27 23.38 30.

SIBM-Pune 2. Zubair Saifi.886.Inventory Costs Inventory Costs total with 98% market availability Inventory Costs total with 90% market availability 10 Mohd.329 .214 1.849.

11 Mohd. SIBM-Pune . Zubair Saifi.

SIBM-Pune .Postponement y Postponement means delay in product differentiation y Supply Chain costs can be divided into two parts 1. Inventory storage etc. y Physical Costs Cost of Production. Transportation. 2. Zubair Saifi. y y Market Mediation Costs When supply exceeds demand then product is marked down and sold When demand exceeds supply then it results in dissatisfaction and lost opportunities 12 Mohd.

Zubair Saifi. SIBM-Pune .In HP deskjet case study y Basic product should be made at Vancouver plant in USA y Final Assembly and differentiation to be done at DCs y DCs should be provided with complete processes for assembly of products y It will help company fight demand variations in a better way y HP can now support more number of models 13 Mohd.

References y ´Postponement project work paperµ ² MIT center for transportation and logistics. Version: Feb 23.html. 2005 y http://www.com/freecartoons/freecartoons. Zubair Saifi. retrieved on 16th Dec.business-around-theglobe. SIBM-Pune . 2009 14 Mohd.

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