Purpose of HP DESKJET PRINTERS & SUPPLY CHAIN is to propose a solution for HP for keeping low inventory levels of DeskJet printers and getting an agreement among the DC’s in order to meet customer needs, especially in the European region. For effective inventory management throughout the DeskJet printers’ supply, HP’s Vancouver Division faced multiple challenges of the poor forecasting system, a make-to-stock system of distribution and multiple products. These challenges had created inefficient demand forecast, longer lead time and disagreement on the right level of inventory among distribution centers. To combat this crisis of inventory and service there alternatives were proposed; air shipment, new plant and improved forecasting system accompanied by MRP (material resource planning) and BOM (bills of material). Each of the alternatives had advantages and disadvantages. After evaluation of each alternative, improved forecasting system and localization at European distribution center were thought to be most appropriate for Vancouver Division. With improved forecasting system, the Vancouver Division may be able to make accurate safety stock calculations to avoid overstock and backdoor problems at European Distribution. MRP and BOM at distribution centers may provide the needed support to the manufacturing process at Vancouver Division. The better safety stock management would lead to reduced lead time and lower inventory carrying cost at European Distribution Center. Further, the service mess could be resolved by shifting the localization process from Vancouver division to European Distribution Center. This may also enable the management to easily meet the fluctuations of DeskJet printer demand in the European region.
HP DESKJET PRINTERS & SUPPLY CHAIN:
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In 1939, the foundation of Hewlett-Packard Company, also known as HP, took place by William Hewlett and David Packard. HP headquartered in Palo Alto, California was structured by product group as well as functions. It had six divisions which acted as SBUs for a specific set of products which included printers, plotters, magnetic discs, tape drives, terminals, and network products. Among these SBU’s Peripherals Group was the 2nd largest with revenues of $4.1 billion in 1990. The peripherals Group was admired and recognized for bringing innovations in the company and exploiting new market opportunities such as the LaserJet printer, which was its most successful product. HP, by commencing as an electronic test and measurement equipment, had diversified successfully into computers and peripherals products. Having operations in more than 50 countries worldwide, HP’s revenues were $13.2 billion with net income $739 billion in 1990.