1

TABLE OF CONTENTS

1) COMPANY PROFILE
2) SWOT ANALYSIS
3) GREEN INITIATIVES
4) VISION, MISSION, AND VALUES
5) COST ACCOUNTING MEASURES
5.1: LATEST FINANCIAL DEVELOPMENTS
5.2: COST TAKEOUT
5.3: XEROX PROPOSALS
5.4: VALUE CREATIONS
5.5: MARGIN EXPANSION
5.6: EXECUTION RECORDS
5.7: 3RD QUARTER (2021-22) RESULTS
5.8: NET REVENUE AND EPS
6)ASSET MANAGEMENT
7) OUTLOOK
8) SUPPLY CHAIN OVERVIEW
8.1: SCM RESPONSIBILITY
8.2: STANDARD MANAGEMENT MEASURES
8.3: SENSING RISK
8.4: ADDRESSING RISK
8.5: CAPACITY BUILDING
8.6: POLICIES AND STANDARDS
8.7: SUPPLIER SER DEVELOPMENTS
9) HP SUPPLY CHAIN INNOVATION
9.1: HP DIFFERENTIATORS
10) VALUE CHAIN
10.1: INBOUND LOGISTICS
10.2: OPERATIONS
10.3: OUTBOUND LOGISTICS
10.4: MARKETING AND SALES
10.5: INFRASTRUCTURE
11) COMPETITIVE STRATEGY
12) INVENTORY MANAGEMENT
12.1: IDENTIFIED PROBLEMS
13) TRANSPORTATION AND LOGISTICS
13.1: CHALLENGES
13.2: INNOVATION LIKE MPS OFFERING
14) CONCLUSION
15) REFERENCES
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1. Company Profile

Hewlett-Packard Company (HP) is the world's second-largest computer

manufacturer, after International Business Machines Corporation (IBM). Hardware
ranging from palmtops to personal computers to supercomputers, software,
networking solutions, printers, scanners, and support and maintenance services are
among the company's computer offerings. In 1998, HP's computer division
accounted for 84 percent of the company's revenue. Test and measurement
products and services, medical electronic products and services, electronic
components, and chemical analysis and service accounted for the remaining. To
focus on its computer activities, the business stated in March 1999 that it will spin off
these operations as an independent company by mid-2000.

HP is an American multinational information technology corporation that provides

hardware and software services to small, medium, and large organisations in a
variety of industries. It also provides a diverse selection of IT products.

HP Enterprise Business (EB) controls services such as information security, network

security, and compliance and includes HP Technology Services and HP Enterprise
Security Services. The corporate software division of HP is known as HP Software
Division. HP Labs, HP's research arm, is housed under the office of Strategy and
Technology. HP also offers consulting and managed services all around the world.
HP's financial services division offers a variety of financial value-added life cycle
managed services.

As per the Forbes list, HP is ranked 80th in the Global 2000 list and 31st in the
World's Most Valuable Brands category. HP is now one of the world's leading
technology providers, and despite its impressive track record, the corporation still
has a long way to go.
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2. SWOT ANALYSIS

Strengths

Brand Valuation: Hewlett Packard has tremendous brand equity and a whopping
19.3 billion dollars in brand valuation, far more than many other firms in the
consumer durable market. HP is ranked 50th out of the top 100 brands in the world.

Sector Rank: HP is placed tenth in the IT industry, which includes Apple, Facebook,
and Google. This demonstrates Hewlett-enormous Packard's popularity.

Production Excellence: HP's production prowess is demonstrated by the fact that

two personal computers and two printers are shipped every second. This
demonstrates its supremacy in this field. They are the world's second-largest shipper
of computer equipment. HP had a nearly 20% market share at the time. They have a
market share of 40.5 percent in the printer segment.

R&D: To keep ahead of the technology curve, they invest heavily on research. The
research at HP Labs is focused on critical growth areas such as sensing, natural
language identification, audio/video analytics, and innovative information displays.

Differentiated products: In comparison to the competition, Hewlett Packard has

consistently delivered differentiated and sophisticated goods over time. The latest
HP Spectre laptop is a terrific piece of hardware. They also have bulk printers and
bulk xerox machines that are high-performing and long-lasting.

Weakness

Demand is declining: During FY 2015, demand for printing equipment and personal
computers fell by 8.3 percent. Desktop PCs saw a 17 percent drop in net revenue,
while notebook PCs saw a 2% drop, workstations saw a 9% drop, and other net
revenue dropped by 8%. Smartphones are rapidly displacing laptops, and Hewlett
Packard is lagging behind the competition in this area.
 5

Weak Financials: Revenues fell by 7.3 percent in FY 2015 compared to FY 2014. In

comparison to FY 2014, operating profits fell by 23.9 percent.

Computer after-sales service: HP's laptops and desktops are notorious for having
terrible after-sales service, particularly in emerging markets.

Opportunities 

3D printing: 3D printing technologies are predicted to increase rapidly, according to

estimates. With a CAGR of 28.5 percent, the 3D market will reach $30.2 billion by
2022. Shipments of 3D printers increased by 103 percent globally in 2016.

Managed Print Services (MPS) Market: The MPS market is expected to grow at a
CAGR of 14.8 percent from $26.2 billion in 2015 to $94.9 billion in 2024.

Threats 

Product Challenges: The expansion of the personal computer product range has
stalled. There are many rivals in the printing industry, and it is seeing a fall in growth.

Competition: Lenovo, Dell, Acer, ASUSTeK, Apple, Toshiba, and Samsung are a
few competitors in the personal systems market, while Canon, Lexmark, Xerox,
Seiko Epson, Ricoh, Samsung, and Brother Industries compete in the printing
segment.

Smartphones: As the need for and popularity of smartphones grows, the PC is

slowing down. Not only will revenue be reduced, but the total volume of shipments
will be reduced as well.
 6

3. GREEN INITIATIVES

 HP is no stranger to environmental stewardship. HP's initiatives, inventions, and

designs have represented our long-standing dedication to the environment for
decades, resulting in award-winning programmes in the United States and around
the world.

As a result, in 2007, Fortune Magazine identified HP as one of the top ten corporate
"Green Giants" in the world, and Newsweek ranked HP as the No. 1 high-tech
business (8th overall) on their list of 1,800 Greenest Companies.

Energy Effeciency

Since 1992, HP has offered PCs with energy-saving features as one of the first
businesses to comply with the United States Environmental Protection Agency's
ENERGY STAR® programme. 1

HP's Power Management Technology can now reduce PC energy consumption by

up to 45 percent2, lowering total cost of ownership and promoting environmental
awareness. HP PCs now go into sleep mode faster, consuming less power, and
wake up quickly, consuming less energy and producing less noise.

HP claims that HP Power Management Technology in consumer PC products saved

350,000,000 kg of CO2 in 2008, which is comparable to removing 76,000 cars from
the road for a year.

 Design for Environment

The Design for Environment (DfE) programme at HP brings together designers,

engineers, and environmental product stewards to promote conservation while
creating value. From design, manufacture, and distribution through your personal
use, reuses, and recycling, HP addresses environmental effect throughout a
product's lifecycle.

The DfE programme encourages HP to minimise product materials and boost energy
efficiency, as well as ensuring that its vendors fulfil our high requirements. Energy
may be saved and waste can be reduced with efficient operations. Smaller, lighter
 7

goods, such as the HP TouchSmart IQ and Special Edition PCs, have enhanced
packaging that simplifies shipping and reduces CO2 emissions.

4. Mission Statement, Vision Statement, Core Values

We earn customer respect and loyalty by consistently providing the highest quality
and value. We achieve sufficient profit to finance growth, create value for our
shareholders and achieve our corporate objectives. To create technology that makes
life better for everyone, everywhere — every person, every organization, and every
community around the globe. HP core values include “customer loyalty, market
leadership, growth, and commitment to employees.”
 8

5. COST ACCOUNTING ANALYSIS: BRIEF BACKGROUND

Hewlett Packard has a new focus area for the twenty-first century, intending to
simplify technology experiences for all clients, from individual consumers to giant
corporations. HP's portfolio encompasses printing, personal computing, and IT
infrastructure, and the Company has grown to become one of the largest IT
corporations in the world. When HP completed its merger with Compaq Computer
Corporation in 2002, it marked the beginning of a new era.

HP has risen to the top of the global provider of products, technology, solutions, and
services to consumers and enterprises in its new position. IT infrastructure, personal
computing, access devices, global services, and image and printing are among the
Company's services. In 2007, HP took the bold step of stabilizing its position in the
latter half of the decade by making a series of acquisitions that influenced the
software, personal computer, and printing markets. HP also generates a stunning
$100 billion in revenue. (Hewlett-Packard Timeline, 2008).

HP has progressively ascended to 11th place in the Fortune 500 ranking of the
world's most successful corporations based on revenue and performance. HP enters
a new sector and reveals its digital entertainment industry strategy, which includes a
wide range of products and collaborations changing how consumers interact with
music, movies, television, photos, and digital entertainment.

HP announces more than 100 consumer goods as part of the strategy, making it the
Company's most significant consumer product release in history. The HP
Photosmart 7960, the world's first eight-ink consumer picture printer, is part of the
deployment. HP has announced a global push for the small and medium-sized
company (SMB) market, one of the world's fastest-growing and most important
areas. The Smart Office Initiative provides SMBs with customized support services,
local experience, and products to assist them in managing their specific business
requirements. HP announces over 100 different products, solutions, and services as
part of the launch.

It retains its top twenty aim by maintaining in the Fortune 500 firms ranking at 14th
place. HP retains its impressive sales of $91.6 billion and employs 156,000 people
across the globe, from Asia to Europe and North America. HP's sales increased
significantly in just one year, hitting $104.3 billion in 2007 and employing 172,000
 9

people from various cultures and ethnic backgrounds worldwide. (Hewlett-Packard

Timeline, 2008).

LATEST FINANCIAL DEVELOPMENTS

Today, HP Inc. (NYSE: HPQ) unveiled a multi-year strategic and financial value
development plan, with non-GAAP diluted net EPS estimated to range from $3.25 to
$3.65 by 2022. HP's market leadership and track record of execution across
Personal Systems, Print, and 3D Printing & Digital Manufacturing, as well as a new
capital return program of roughly $16 billion from fiscal 2020 through fiscal 2022, all
underpin this considerable expected profits growth.

HP expects to generate the following value as part of this value creation strategy:

$4.7 billion to $5.1 billion in non-GAAP operational profit in fiscal 2022; $10.7 billion
to $11.7 billion in total free cash flow from fiscal 2020 to fiscal 2022; and $1.2 billion
in structural cost reductions in fiscal 2022, including $650 million in non-GAAP
operating profit.

Using HP's Balance Sheet to Benefit HP Shareholders

HP's Board of Directors has approved a capital return program that will return
roughly $16 billion to HP shareholders between fiscal 2020 and fiscal 2022 as part of
the Company's value development objective for shareholders. This accounts for
roughly half of HP's current market capitalization. In addition, the Company has
expanded its overall share repurchase authorization to $15 billion, up from the $5
billion announced in October 2019. HP aims to repurchase at least $8 billion in HP
stock over the next 12 months, starting after the Company's 2020 annual meeting.
HP has a long history of generating excellent free cash flow and returning money to
shareholders, with a total return of $9.1 billion over the last three years. Unless
better possibilities arise, HP raises its long-term return of capital target to 100% of
free cash flow production. HP plans to keep dividend per share growth at least in line
with profits growth.
 10

HP is dedicated to maintaining an investment-grade rating, with a gross debt-to-

EBITDA ratio of 1.5x to 2.0x as a target. HP intends to fund this capital return
program with cash and available loan capacity.

Cost Takeout

HP has unveiled a cost-cutting program intended to save $1.2 billion in gross,

annualized run-rate structural costs in fiscal 2022, with at least $1 billion in additional
ongoing productivity improvements.

HP reported today that about $650 million in structural cost savings is expected to
pass through to non-GAAP operating profit growth.

The proposal from Xerox: Faulty Value Exchange, Irresponsible Capital

Structure, and Exaggerated Synergies

HP feels that industry consolidation is beneficial, which is why it purchased Samsung

Printing in 2017. Consolidation, on the other hand, must benefit HP shareholders.
The updated Xerox proposal, which was announced on February 10, 2020,
undervalues HP significantly, poses a significant risk, and jeopardizes HP's future.

The new Xerox proposal is as follows:

1) Exchanges HP stock for cash and Xerox shares in a fundamentally flawed

value exchange that fails to repay HP owners for the value of HP executing
on its strategic plan and instead transfers value from HP to Xerox
shareholders.

2) Uses HP's balance sheet as a consideration in the acquisition, resulting in an

irresponsible capital structure that would risk the combined Company's future
value and limit its capacity to invest in development and innovation; and

3) By integrating HP's existing intentions for independent cost savings and

productivity gains, the potential synergies are exaggerated.
 11

HP is reaching out to Xerox to see if there is a way to combine the two

companies to produce value for HP shareholders that complement the
Company's strategic and financial goals.

The HP Board of Directors is dedicated to pursuing the most incredible value-

creating route and serving the best interests of HP shareholders.

In Personal Systems, Value Creation and Margin Expansion

HP has amended its long-term operating model in Personal Systems,
accounting for 68 percent of HP's Q1 2020 revenue, boosting target operating
margins to 3.5 percent to 5.5 percent.

HP has established a leadership position in the Personal Systems industry,

which is predicted to expand to over $330 billion by fiscal 2023, thanks to
breakthrough technology and intellectual property. HP plans to capitalize on
this growth opportunity by innovating computing experiences, improving the
lifetime value of devices in areas such as gaming, and extending into adjacent
sectors to accelerate services and solution development.

Improving Print Value Creation and Margin Expansion

With a 40% market share and the highest operating margins, HP is the global
leader in Print.
HP announced today that it would set a long-term operating margin target of
16 percent to 18 percent in the print sector.
HP is following a consistent approach to expand its Print business model to
provide consumers with more choice, convenience, and value while also
increasing the recurring nature of print revenue. This includes following its
playbook to gain supply share, growing contractual revenues in consumer
and enterprise, optimizing system profitability to shift system value back to
hardware, and expanding its graphics and 3D portfolio to lead the analog to
the digital revolution. HP's decades of innovation investment in 3D printing
and digital manufacturing have resulted in new businesses for the Company
and an excellent track record of growth. HP is moving beyond hardware to
revolutionize manufacturing and establish a holistic solutions ecosystem to
 12

capture significant market opportunities and unlock new streams of wealth by

monetizing its highly unique IP.

Record of Execution and Continuing the Momentum

HP has met or exceeded non-GAAP diluted net EPS guidance for all 17
quarters as a standalone company, including excellent profits growth as
announced separately today, and has met or exceeded free cash flow
guidance for four of the past four years.

HP has increased sales by $10.5 billion, increased GAAP diluted net EPS by
45 percent, generated $12.9 billion in cumulative cash flow from operations,
and returned $9.1 billion, or 80 percent of free cash flow, to shareholders
during the last three years.
HP's board of directors and management team are committed to maintaining
the Company's track record of profitable growth, robust cash production, and
capital return. The Company's strategy focuses on strengthening its
leadership in Personal Systems and Print, disrupting industries with
breakthrough technologies in Graphics and 3D Printing & Digital
Manufacturing, and reforming its business model to continue to reduce costs.
 13

HP Inc. Reports Fiscal 2021 Third Quarter Results

HP Fiscal 21, 3rd quarter performance

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 14

HP INC.'s 3rd quarter EPS performance

1.2

0.8

0.6

0.4

0.2

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Q3 FY21 Q3 FY20

GAAP diluted net EPS Non-GAAP diluted net EPS

Net revenue and EPS results

HP Inc. and its subsidiaries ("HP") reported net revenue of $15.3 billion in the third
quarter of fiscal 2021, up 7.0 percent (4.1 percent in constant currency) from the
prior-year period, which shows the strong and sustained demand for HP
technologies. The evolving world is driving innovation, and the market expansion
shows how well the Company is capitalizing on the market.

Now looking for the results, The third quarter GAAP diluted net EPS was $0.92, up
from $0.52 in the prior-year period and beyond the $0.77 to $0.81 guidance set
before. Non-GAAP diluted net EPS for the third quarter was $1.00, up from $0.49 in
the prior-year quarter and beyond the previously disclosed guidance of $0.81 to
$0.85. The reduction in previously estimated sales and marketing program
incentives was partially offset by discretionary investments in, among other things,
R&D, marketing, and investing in our hybrid work strategy, resulting in a net benefit
of $0.13 per diluted share in GAAP and Non-GAAP diluted net EPS. After-tax
adjustments of $90 million, or $0.08 per diluted share, were excluded from third-
quarter non-GAAP net earnings and non-GAAP diluted net EPS due to restructuring
and other charges, acquisition-related charges, amortization of intangible assets,
non-operating retirement-related (credits)/charges, debt extinguishment costs, and
tax adjustments.
 15

6. Asset management

In the third quarter of fiscal 2021, HP generated $1.1 billion in net cash from
operations. Accounts receivables were $4.9 billion at the end of the quarter, up one
day from the previous quarter to 29 days. Inventory was $8.2 billion at the end of the
quarter, up eight days from the previous quarter to 62 days. Accounts payable were
$15.9 billion at the end of the quarter, up ten days from the previous quarter to 120
days.

In the third quarter, HP produced $1.0 billion in free cash flow. To get at free cash
flow, the $1.1 billion in net cash generated by operating operations is adjusted for
net lease investments of $40 million and net investments in property, plant, and
equipment of $158 million. HP paid a $0.1938 per share dividend in the third quarter,
resulting in a cash outflow of $230 million. HP used $1.5 billion in cash to
repurchase roughly 50 million shares of common stock on the open market during
the quarter. As a result, HP returned 178 percent of its free cash flow to
shareholders in the third quarter. HP ended the quarter with $3.4 billion in gross
cash, which includes $8 million in short-term investments and $3.4 billion in cash
and cash equivalents.

Fiscal 2021 third quarter segment results

Personal Systems' net sales were $10.4 billion, unchanged year over year (down 3%
in constant currency), with an operating margin of 8.4 percent. Consumer net
revenue climbed by 3%, while commercial net revenue fell by 1%. The total number
of units remained the same, with Notebooks up 2% and Desktops down 7%.

With a 17.6 percent operating margin, printing net sales were $4.9 billion, up 24
percent year over year (up 22 percent in constant currency). Overall, total hardware
units decreased by 4%, with consumer units falling by 8% and commercial units
rising by 29%. Consumer net sales increased by 15%, while commercial net revenue
increased by 46%. Net revenue from supplies increased by 20%. (up 19 percent in
constant currency).
 16

7. Outlook

HP expects GAAP diluted net EPS to be in the range of $0.82 to $0.88 in the fourth
quarter of fiscal 2021, and non-GAAP diluted net EPS to be in the range of $0.84 to
$0.90. Restructuring and other costs, acquisition-related charges, amortization of
intangible assets, non-operating retirement-related (credits)/charges, tax
adjustments, and the relevant tax effect on these items are all excluded from fiscal
2021 fourth quarter non-GAAP diluted net EPS projections.

HP expects GAAP diluted net EPS to range from $3.56 to $3.62 in fiscal 2021 and
non-GAAP diluted net EPS to range from $3.69 to $3.75. Non-GAAP diluted net EPS
projections for fiscal 2021 remove restructuring and other charges, acquisition-
related charges, amortization of intangible assets, non-operating retirement-related
(credits)/charges, debt extinguishment expenses, tax adjustments, and the relevant
tax effect on these items. HP expects to generate at least $4.0 billion in free cash
flow in fiscal 2021.
 17

8. SUPPLY CHAIN OVERVIEW

HP uses a large number of outsourced manufacturers ("OMs") worldwide to make

HP-designed goods. The use of OMs is intended to improve cost efficiency and
reduce time to market for HP-designed products. It employs numerous OMs to keep
its supply chain and production processes flexible. Third-party vendors occasionally
produce items that are purchased and resold under the HP brand. In addition to the
usage of OMs, HP has occasionally created a limited number of goods for their use
rather than relying on third-party providers (hp.com, 2017). Hp uses Leagile
techniques to respond to client requests for goods. This is because Hp creates
products to make use of its industrial and logistics capabilities by mass-producing
elementary product forms in large quantities. Otherwise, ordering items allows units
to be customized to a client's hardware and software needs (hp.com, 2017).

In both construction and organizing items to order, HP stock administration and

distribution methods aim to reduce stock holding phases by seizing inventory and
producing it as soon as possible before the sale or distribution of goods to the
customer (hp.com, 2017).

SCM RESPONSIBILITY

HP's supply chain responsibility program aims to protect and empower employees
and lessen global and community environmental effects while also benefiting HP
and our customers.

Policies, standards, and management system

HP wants to define SER performance requirements for significant suppliers
and encourage them to follow them. While we seek to align our standards and
expectations with those of our industry, we also acknowledge that suppliers
often lack clear direction on how to solve some of the most severe SER
challenges. HP makes leading policy and standard changes when these gaps
are uncovered, effectively communicating our expectations to our vendors.
 18

Their management system is meant to enhance our supply chain's SER

performance continuously. Social Accountability International (SAI) evaluates
our management system against their stringent Social Fingerprint benchmark
regularly to assist us in tracking our progress.
Sensing risk
HP tries to identify and analyze sources of risk and their context before taking
action to rectify potential or existing issues at any step in our supply chain.
Risks are identified at a global or regional level and the level of individual
suppliers. We accomplish this through the following avenues:
Stakeholder engagement: To research and better understand issues of
concern regarding SER in our supply chain, HP engages with a wide range of
stakeholders, including workers (via interviews, surveys, capability building
programs, and our ethics concerns reporting system), industry bodies,
governments, socially responsible investors (SRIs), and non-governmental
organizations (NGOs). Stakeholder participation is crucial in developing a
coordinated and effective response to significant human and environmental
concerns.
Supplier risk profiling: HP keeps track of the risks associated with its supply
chain. They use this information to find the most efficient way to deploy
resources and engage suppliers.
External data: HP draws on data from various external sources to inform the
design of its supply chain accountability program. Research, studies, and
indexes from industry associations and other sites are among these sources.
Performance monitoring: HP tracks supplier performance to understand
better supplier concerns and spot patterns across their whole supplier
network. They keep track of supplier concerns and trends through their
assurance program, including comprehensive audits utilizing HP's Supplier
Code of Conduct and targeted evaluations in high-risk areas like using foreign
migrant labor. They also employ supplier key performance indicator (KPI)
monitoring, which collects data on essential topics, including working hours
and student worker utilization.
Addressing risk
 19

Risk sensing initiatives at HP give extensive data that helps us identify and
prioritize current and new areas of concern in our supply chain. Their program
tackles the following threats to employees and the environment:
Multi-industry collaboration: HP collaborates with industry peers and
consortia to impact industry alignment and direction, including broad best
practices sharing and more particular types of collaboration, such as
establishing the EICC Code of Conduct. They also take part in cross-industry
collaboration to help promote and support change outside of the IT sector.
Remediation: HP optimizes SER performance using information from
sources such as audits and evaluations, as well as initiatives aimed at
addressing known and prospective issues at suppliers, such as:
• Escalated remediation for zero-tolerance findings and instances where effort
above regular corrective action is required • Defined corrective action plans
with focused follow-up assurance actions
Capability building
HP works with NGOs, training partners, governmental agencies, and
suppliers to enhance SER performance through initiatives and partnerships
concentrating on worker empowerment and management system
improvement.
Business integration: HP's procurement operations tasks include frequent
supplier business assessments and day-to-day interaction to motivate and
incentivize suppliers through ongoing partnerships. Their procurement
operations staff has been taught to evaluate, educate, and mentor SER
performance.
The team reviews major new suppliers against SER performance
requirements as part of their onboarding process, which engages suppliers
early and highlights the link between SER and procurement. The procurement
team integrates HP SER criteria in business contracts with vendors after
choosing a provider for business. HP's SER scorecard connects ongoing
procurement choices to supplier SER performance and engagement in
capability development, ensuring that SER is a top priority in business
decisions. The SER score of a supplier is multiplied by its overall supplier
management score. This gives suppliers with high SER ratings more
prospects for new or expanded business with HP. However, suppliers with
 20

consistently low SER scores will have considerably lower total scores and
may experience significant losses in our business.

Policies and standards

HP's Supplier Code of Conduct: HP's Supplier Code of Conduct, based on
the Electronic Industry Citizenship Coalition (EICC) Code of Conduct, the
industry's worldwide supply chain standard, is the highest degree of SER
requirements for suppliers. They collaborated on the formulation of the EICC
Code of Conduct in 2004. HP fully supports the EICC code and has worked to
enhance and expand it over the years to promote workers' rights best and
safeguard the environment. HP has enhanced its Supplier's Code of Conduct
to give more detail on their standards for managing vulnerable worker groups,
rules for chemicals used in goods and manufacturing processes, and product
recycling and reuse to accomplish these aims. The HP Supplier Code of
Conduct and accompanying standards must be followed by all HP goods and
services suppliers. In addition, suppliers must communicate these standards
to their next-tier suppliers and keep track of compliance.
HP General Specification for the Environment: HP's General Specification
(GSE) defines the substance and materials requirements used in HP
products, packaging, and manufacturing processes. HP requires all suppliers
to conform to HP's Supplier Code of Conduct and comply with our GSE,
which includes substance and materials requirements for parts and
components used in HP products, packaging, and manufacturing processes.
HP Reuse and recycling: HP's reuse and recycling guidelines specify how IT
gear and printing materials should be transported, treated, and disposed of on
our behalf. HP expects its vendors to act responsibly and with regard for the
environment and human health and safety.
The purpose is to increase reuse and recycling, reduce waste, and protect
information. To be successful, suppliers must agree to comply with HP
standards and applicable legislation and demonstrate management systems.

Supplier SER development

 21

Source: http://www.hp.com/sustainability
 22

9. HP Supply Chain Innovations

What Sets HP's Supply Chain Apart?

Operational Effectiveness & Efficiency: • Strive for continuous
improvement in the Supply Chain cost structure; • Encourage uniformity and
simplicity; and • Maintain high levels of customer satisfaction.
Partner for Success: • Creates alignment around similar corporate goals by
focusing on open, collaborative business alliances. • Delivers seamless data
and process integration to serve customers better.
Supply Chain Innovation: • Create efficiency and increase performance by
inventing new methodology, tools, and processes • Continuously improve
Supply Chain operations • Delivers competitive advantage and distinction

Procurement Risk Management

Value: • Prevents pricing and supply volatility from affecting margins,
earnings, and supply.
• Improves price predictability and consistency
Capabilities: Uncertainty management • Risk reallocation between customer
and supplier • Contract alternatives evaluation

Buy/Sell
Value: • Lowers material prices • Increases cash flow • Lowers inventory
levels
Capabilities: • Price concealment • Contractual agreement adherence •
Spend aggregation • Supply assurance

E-Sourcing
Value: • Increases negotiated cost savings • Lowers total cost of ownership •
Increases procurement staff productivity • Shortens time-to-market
Capabilities: • Enables supplier connections and interactions management
(eRFI, eRFP, eRFQ, auctions, bid optimization) • Provides strategic sourcing
and negotiation management (eRFI, eRFP, eRFQ, auctions, bid optimization)
 23

• Improves team cooperation by providing strategic sourcing information,

sharing, leverage, and visibility (Engineering, SC, Procurement)

Dynamic Replenishment
Value: • Ensured supply • Improved inventory management •
Responsiveness of the supply chain
Capabilities: • Inventory targeting logic based on statistics • Supply/demand
matching optimization based on rules • Automated replenishment process

Supply Chain Visibility

Value: • Upstream and downstream monitoring • Proactive company
performance management • Informed decision-making
Capabilities: • Comparison of many scenarios
• Fixed factors (e.g., lead time, holding costs, demand fluctuation, and service
performance) • Inventory optimization • Centralized training

Warranty Chain Management Early Warning Solution

Value: • Cost savings from reduced "poor" manufacturing and warranty
expenses • Improved brand image • Improved quality and serviceability of
future designs
Capabilities: • Issue extraction from structured and unstructured data •
Analysis, reporting, and scorecards
• The ability to see trends and problems
• Closed-loop method for issue resolution • Issue tracking and resolution

Social Environmental Responsibility

Value: • Leadership in the establishment of the Electronic Industry Code of
Conduct (from sourcing to recycling) • Extensive industry benchmarking
Capabilities: • Extends HP's social responsibility to HP's worldwide supply
base • Defined SER supplier compliance
 24

10. HP’s Value Chain

 Inbound logistics: –
Only a small portion of HP's branded product range is manufactured in-house,
with the rest being procured from outsourced manufacturers (OMs). In certain
circumstances, HP simply resells products produced by third-party vendors.
HP's inventory management and distribution techniques have enabled them
to keep inventory holding periods to a bare minimum. Like other IT industry
stakeholders, HP generally procure materials and components using a
combination of blanket and scheduled purchase orders to satisfy customer
demand requirements for periods averaging 90 to 120 days. HP does not
maintain items shipped from its suppliers for long periods of time since
inventory holding times are short. They'll be delivered to resellers and other
customers as quickly as possible from the company's distribution facilities.
We focus our resources according to identified risks posed by supplier
activities, and aim to improve long-term SER performance by building
suppliers’ capabilities through sustained, long-term engagement. (Hewlett-
Packard Timeline, 2016).
 Operations:
Hewlett Packard, or HP, is a technology corporation that serves individuals,
businesses, and all types of institutions across the world. The corporation
eventually developed its offerings to include IT infrastructure, personal
computers and access devices, worldwide services, and image and printing.
The supply chain did not reflect the fact that printers were transitioning from
an inventive to an utilitarian product. HP sourced components from OEMs and
then assembled them themselves. The printer served as a conduit for HP's
high-margin cartridges. HP's success in Europe was beginning to rival its
success in the United States, posing additional challenges due to the need to
adapt power sources and languages for different markets. The company is
well-known throughout the world, as it operates in more than 170 countries.
HP is a worldwide company with offices all over the world. Apart from the
United States, it is taxed in 58 other countries. Its largest market is the United
States. It has offices across Africa, the Americas, Asia Pacific, Europe, and
the Middle East.
 25

 Outbound Logistics:
HP has a global network of brand resellers and distribution partners who
resale HP's products to clients all over the world. HP does not keep its
inventory for long periods of time. It satisfies demand in two ways: by building
things to order and configuring products to order. By generating large
quantities of basic product configurations, it has been able to maximise
production and logistics efficiencies. It receives its items just before delivering
them to customers all over the world through its distributors. Only a few year
after their merger with Compaq they made about 99.2 % of their spend and
their movements of good was outbound. It also spends a lot of money on
research and development. It has spent roughly 1.2 billion dollars on research
and development over the last three years. With increasing rivalry, investing
in technical innovation has become necessary to stay ahead of the
competition.
 Marketing and Sales:-
HP have product portfolio focusing on satisfying the needs of the individual
customers and enterprises. It caters to the enterprises ranging from the small
& medium enterprises to private companies to government institutions. Since
the computing business has become increasingly competitive, companies are
investing more on product marketing. HP, like many other companies, spends
a lot of money on marketing and promotion of its products. It promotes its
brand through both digital and traditional media. It spent 578 million dollars on
advertising in 2017. A corporation does not achieve this degree of brand
value without making strategic marketing investments. Hewlett Packard is
regarded for being a clever marketer, and its advertising are always bright
and vibrant, showcasing the capabilities of its printer while also exuding an air
of elegance.
 Infrastructure
The physical and digital infrastructure at the firm also plays a vital role in the
management of the businesss and a brand. In the management of a business
and a brand, firm infrastructure is indeed essential. HP has cultivated a
learning and innovation culture. In 2015, HP was split into two companies. HP
is now in charge of the computer and printing industries. Personal Systems,
 26

Printing, and Corporate Investments are the three segments of the company's
operations. HP is a technology business that sells technology products and
extensively relies on technology in its manufacturing, distribution, and
marketing operations. In the technology industry, skilled human resources are
a must for every brand that wants to grow quickly. It employed 53000 workers
as of 2020. It also invests much in personnel recruitment, retention, and
training. HP has implemented advanced training programmes for its staff, as
HR management has become vital to the growth of a technology business.
Hence we can see that HP extensively evolved their physical, digital and
human infrastructure to maximise efficiency and effectiveness.

11. Competitive Strategy

Target Audience – People who prefer innovative and well-crafted gadgets that adds
to their personality besides fulfilling specific technological needs.

Distribution Strategy – In order to make their products widely available, which is in

accordance with their vision of ‘creating technology that makes life better for
people/community around the globe’, HP uses a mixed distribution model comprising
multiple distribution channels:

1. Direct – Online through their omni presence & own outlets

2. Indirect – Retail stores and authorised showrooms, original equipment

developers and resellers

Supply chain uncertainties arise both because of the excessive inventory costs
triggered by risk aversion about meeting client deliveries, and convoluted visibility
due to multi-tiered manufacturing network. High inventory levels lead to a deficit in
cash flow resulting in lower working capital while convoluted visibility requires
multiple reconciliations especially for a company like HP with global presence having
different accounting standards in different countries.
 27

Strategic Fit: HP overcomes the above mentioned challenges by reducing the

supply chain nodes, consolidating multiple facilities, and adopting Just-in-time
model. Essentially, they work on a demand-pull basis increasing production for in
demand items and reducing production for slow movers. It also strongly monitors its
partners to improve demand forecasting to curb uncertainties.

12. INVENTORY MANAGEMENT

HOW INVENTORY WAS A PROBLEM FOR HP?

The problem was identified way back In 1997, and certain Hewlett-Packard product
lines had not made a profit since 1993. They examined their operations and
determined that growing PC expenses were being driven by surplus inventory.
Inventory-related expenditures were dispersed over various functions and
geographies and were reported using a variety of accounting methods.

IDENTIFIED PROBLEMS

1) In today's economy, stock-outs are unacceptable, so if Company cannot

satisfy your customer's demand, they will most likely switch to a rival. Fearing
this scenario, decision-makers fall for the ruse of significant inventory levels,
providing a false sense of security.
2) A lack of visibility is another reason for excess inventories. HP has a
multitiered, complicated production network made up of several businesses.
When corporations combine or acquire other companies, visibility gets
considerably more complicated, especially when they become worldwide and
must reconcile financials in several currencies and accounting standards.
3) HP also has to deal with various traditional and hidden costs involved that
was the building of the inefficient inventory management
HP classified the Hidden costs into separate divisions and came up with
solutions for each in order to manage their inventory effectively
A) Component devaluation cost
 Issue: a steep drop in the price of critical components and
maintaining inventory in several locations
Solutions:
 28

 Inventory control of the amount held

 Possession of parts on JIT Basis
 Pay by parts
 Working with suppliers on a real-time basis to minimize
inventory
B) Price protection Cost
 Issue: Dropping price leads to distributor reimbursement;
mismatched inventory, and value of parts
Solutions:
 Minimizes excess inventory
 Controlled Channel partner inventory
 Offers an incentive to channel partners
C) Product return cost
 Issue: Returning unsold goods for a full refund, shipping
handling and retesting and Time spent in supply chain
Solutions:
 Delivery expectations
 Inventory level agreements
 Reduce inefficient inventory in the channel
D) Antiquation cost
 Issue: Holding worthless goods and end-of-life write-offs
Solutions:
 Managing product introductions
 Launching new models as remaining units of old models sold
out

E) INVENTORY DRIVEN COST BENEFITS:

 Profitability of value chain became more sophisticated
 Global ITC Metrics were set up for HP
 Managers were able to make decisions that improved the
overall total costs
 Worldwide inventory declined by more than 50%
 29

 The cost associated with inventory also dropped by more than

70%

INNOVATIVE SOLUTIONS TO DEAL WITH TRANSPORTATION AND LOGISTICS

Logistics providers avidly followed product businesses and shippers as their

activities expanded across markets and continents. Due to acquisitions, service
portfolio expansions, expanded transportation and storage, and vast supplier bases,
logistics providers have increased in size and reach. The number of firms
participating in global logistics is growing, as is the number of touchpoints.

Supply networks have become more complicated and less nimble as a result of
several factors:

• As the number of trading partners, shippers, and carriers has grown, integration
and communication have become more difficult.

• A plethora of business processes, supporting infrastructures, and technology have

evolved from several mergers and acquisitions.

• Other legislation, customs laws, governing bodies, languages, packaging specs,

shipper possibilities, and fuel choices provide unique hurdles when expanding
operations into new nations.

CHALLENGES

Reduced operational expenses are one of the most challenging difficulties facing
transportation and logistics organizations. The transportation and logistics business
is affected by oil price volatility and swings induced by geopolitical upheaval. The
cost of manufacturing and delivering things rises as energy expenditures grow.
Rising gasoline prices strain short-term operational costs, forcing logistics and freight
businesses to divert working capital to more significant fuel purchases, reducing
operating cash flows. As a result, industrial capacity is reduced, and transportation
costs rise.
 30

At the same time, rising regulatory and security costs result from terrorist worries,
consumer spending is down due to the recession, and it is uncertain what will
happen next.

Furthermore, transportation and logistics firms are dealing with changing and varied
volume growth.

Falling international commerce and worsening economic conditions can substantially

influence the load factor, resulting in a significant drop in freight volumes. Customer
expectations and service standards, on the other hand, have risen dramatically in
recent years, compelling firms to respond to market demand faster and placing their
time-to-market response capabilities under strain. Companies in the transportation
and logistics industry must also enable new markets and seek new income
possibilities while focusing on added value and process excellence in existing
markets. New and innovative rivals, satisfying the requirements of more demanding
customers, and adopting progressively stricter business and safety rules are among
the other problems. Furthermore, transportation and logistics firms must adhere to
industry requirements and laws, which can influence their bottom line and efficiency.
Sustainability and corporate responsibility are also essential factors in the strategy of
transportation and logistics organizations. A combination of aging assets and
infrastructure and rising environmental demands to "go green" is spreading
sustainability responsibilities throughout the value chain.

HP Innovation

The concrete costs of inefficient or poorly built image and printing infrastructure are
transparent, and they are the first thing significant companies try to fix. The
expenses of printing and printing fleets are often high, but they are largely
concealed. HP utilizes advanced fleet planning tools to solve this as part of a
Managed Print Services (MPS) contract. HP offers a unique collection of corporate
evaluations to examine the current environment and define best-in-class
infrastructure to assist firms in achieving an optimum imaging and printing
infrastructure state. HP MPS also provides adaptable image and printing services
that can assist businesses in swiftly adapting to changing business and
technological environments.

HP's comprehensive MPS offering

 31

Furthermore, as a long-time environmental leader in the technology industry, HP is

making it easier for large organizations to use less energy, recycle more, and reduce
the impact of imaging and printing—all to help you save money, resources and
deliver results that are good for business and the environment.
 32

Source: HP Business White Paper

HP is a solid provider choice because of its deep technological and innovation roots
in computing/IT and imaging/printing disciplines, giving it the unique ability to help
clients control the cost and the business effect of documents throughout the whole
organization.
 33

Conclusion
 34

HP's competitive edge should be based on activities in which it has access to

rare or scarce resources. Intellectual capital, assets, talents, and a distribution
network are examples. HP can use the Value Chain Analysis to identify and
develop those activities in order to gain a competitive advantage over
competitors. Many companies (such as Toshiba and Sharp) use Value Chain
Analysis to gain a competitive advantage and invest extensively in research
and development operations throughout their value chain network. Porter's
generic competitive advantage techniques and the value chain model can be
combined to create a strong competitive advantage foundation.
 35

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