Hp Supply Chain

pTable of Contents

I. Executive Summary ……………………………………………………………………………………………….2

II. Company and Industry Background……………………………………………………………………….3

III. Issues and Impact Analysis……………………………………………………………………………………4-6

IV. Environmental and Root Cause Analysis………………………………………………………………6-8

V. Alternatives………………………………………………………………………………………………………….8-9

VI. Recommendations……………………………………………………………………………………………..9-10

VII. Implementation Plan……………………………………………………………………………………….10-11

VIII. Conclusion…………………………………………………………………………………………………………….11

I. Executive Summary:

Hewlett Packard has been experiencing problems with their inventory in Europe. While the new DeskJet printer has seen much success in the US market, HP could not solve the main issue of rising inventory levels, which closely matched sales. The systematic issues that have emerged during the analysis of this company are as follows: a) Inefficient Demand Forecasting System, b) Long Lead Time, c) Lack of Cohesiveness and Communication between divisions, d) Differing Inventory Management principles, e) Rise of Models and Options, f) Product Localization, g) Inefficient Shipping method, h) marketing efforts, and i) decreasing consumer loyalty.

The alternatives that are discussed in this report, include the following: 1) Improve Forecasting, 2) Open New Plant, 3) Air Shipping, and 4) Postponement and Model Option Minimization. HP is recommended to make use of the air shipping method, rather than continuing to ship product via ocean. This method will help reduce lead time from 4-5 weeks, down to approximately 2 days – 1 week. Postponement is another key recommendation. The introduction of Universal Power Supply (UPS), and reduction of model options will help HP reduce lead time. The following forecasting methods are discussed: Judgment, Causal Analysis, and Time-Series Analysis. It is recommended for HP to employ a combination of Causal and Time series analysis.

HP must adopt a way to deliver...