Deskjet Printer Supply Chain

Hewlett-Packard: DeskJet Printer Supply Chain

Note: I am not editing the case down to a page because, in this case, detailed background is interesting and some people may wish to read the whole thing. For those with limited time, please focus on Inventory and Service Crisis section.

Brent Cartier, manager for special projects in the Materials Department of Hewlett-Packard (HP) Company's Vancouver Division, clicked off another mile. It had been a long week and it looked like it would be a long weekend as well, based on the preparation that needed to be done for Monday's meeting with group management on worldwide inventory levels for the DeskJet Printer product line. The DeskJet printer was one of HP's most successful products. Sales had grown steadily, reaching a level of over 600,000 units ($400 million). Unfortunately, inventory growth had tracked sales growth closely. Already, HP's distribution centers had been filled with pallets of the DeskJet printer. Worse yet, the organization in Europe was claiming that inventory levels there needed to be raised even further to maintain satisfactory product availability.

Each quarter, representatives from the production, materials, and distribution organizations in Europe, Asia-Pacific, and North America met to discuss "the I-word"-as they referred to it - but their conflicting goals prevented them from reaching consensus on the issues. Each organization had a different approach to the problem. Production had not wanted to get involved, claiming it was "just a materials issue," but had taken the time to rant about the continued proliferation of models and options. The distribution organization's pet peeve was forecast accuracy. They didn't feel that the distribution organization should have to track and store warehouses of inventory, just because the Vancouver Division couldn't build the right products in the right quantities. The European distribution organization had even gone so far as to suggest that they charge...