Hewlett-Packard : DeskJet Printer Supply Chain

郭紋伶 郭有維 朱維禮 Kaushal Kishore (KK)

www.themegallery.com

Team Members
1 2 3 4

郭紋伶

郭有維

朱維禮

KK

themegallery.com Contents 1 2 3 4 5 4 6 Introduction Zero inventory DeskJet supply chain Distribution process The inventory and service crisis Conclusion Company Logo .www.

Asia Pacific and Europe that at the moment were filled of DeskJet stock. in North America.www. HP has three distribution centers (DC).com Introduction In 1990’s. This printer was produced in Vancouver’s facility and from there was shipped to a distribution center. Company Logo .themegallery. Hewlett-Packard faced several problems with inventory levels for the DeskJet Printer product line.

www.com Introduction HP need to reach an optimal solution that balance the customers’ needs and keep a low inventory level. getting an agreement among the DC’s.themegallery. Company Logo .

9 months.www. Just-in-time (JIT) Reduced inventory from 3. .com ZERO inventory The Vancouver division and its quest for zero inventory.themegallery.5 months to 0.

themegallery.www.com The DeskJet Supply Chain Supplier Manufacturing sites The DeskJet Supply Chain Distribution centers Dealers Customers Company Logo .

www.themegallery.com The DeskJet Supply Chain There were two key stages in manufacturing process: Printed circuit board assembly and test (PCAT)  ASICs (application-specific integrated circuits)  ROM (read-only memory ) Final assembly and test (FAT) Company Logo .

The Deskjet Supply Chain No significant buffer inventories Two key manufacturing process 9 .

The Deskjet Supply Chain Localization 10 .

and Asia-Pacific  FAT PCAT Vancouver 1 week 1 day U.The Deskjet Supply Chain  These products were then sorted into three groups destined for the three distribution centers: North America. DC 4~5 weeks Europe 11 Asia . Europe.S.

www.themegallery.com The DeskJet Supply Chain  The management change  DCs: make-to-stock mode inventory level=forecasted sales + safety stock level  Manufacturing: pull mode  3 major sources of uncertainty that could affect the supply chain:  Delivery of incoming materials  Internal process  Demand .

Order fill rate (OFR) Based on orders completed.com Distribution process Line item fill rate (LIFR) Calculated as the total number of customer order line items filled on time divided by the total number of customer line items attempted.www.themegallery. where an order contains multiple line items. .

com Distribution process Inventory level  Safety stock (12% ~ 60%)  Service level (98%) Distribution cost  Outbound freight  salary Company Logo .www.themegallery.

themegallery.www. Company Logo .com Distribution process Step 4 Step 3 Step 2 Ship the order by appropriate carrier. Step 1 Receive (complete) products from various suppliers and stock them. Pick the various products needed to fill a customer order. Shrink-wrap the complete order and label it.

com The inventory and service crisis Europe Problem  Contained issues • Safety stock –Forecasting system –Make-to-stock system –Multiple products • Long lead time .www.themegallery.

www.e.themegallery.com The inventory and service crisis Safety Stock Great variations in market demand. i.. keeping the firm’s target service level (98% in this case). Company Logo . meeting consumers’ requests with a higher probability.

themegallery.com The inventory and service crisis forecasting system  Localization  Inaccurate forecasts  Uncoordinated and divided in terms of inventory policy Company Logo .www.

By using push system.www. HP has to calculate at great length its inventory levels avoiding stock-out and overstock.themegallery. Company Logo . creates high levels of inventory in the DC’s resulting in carrying costs.com The inventory and service crisis  Make-to-stock system Due to all the lacks in forecasts and to long lead times.

www.com The inventory and service crisis Multiple products This variety in products contributes to high levels of inventory because there’s more products to keep in safety stock and to forecast expected demand.themegallery. Company Logo .

 This is due to the fact that smaller lead-times imply an absolute variation in demand. .themegallery. the standard deviation of demand during lead and review time is reduced.www.com Issues to be discussed Long lead time  Reduction in lead time. smaller than with larger lead-times.

they won’t need to keep higher safety stocks when compared to sea transportation. .Issues to be discussed Air Shipment Asian and European distribution centers receive orders more frequently.

This would allow for smaller transportation costs and lead times. Company Logo .Issues to be discussed New Plant Another alternative would be to install a new plant somewhere between Europe and Asia.

Issues to be discussed ERP System Another proposal has to do with the implementation of an Enterprise Resource Planning (ERP) system .

Conclusion Improve forecasting system Reduce the lead time and safety stock  Air shipment  New Plant ERP system .

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