Hewlett Packard Case Study

Hewlett-Packard Case Study

Operations and Project Management

ABSTRACT

Many organizations struggle with minimizing inventory costs, while attempting to properly forecast to meet an often changing demand. Organizations have implemented systems, approaches or inventory models in hopes to create a standardized process that will ensure their product is readily available for the ever changing customer demand, and to reduce or eliminate inventory costs.

Hewlett-Packard Case Study

1. Introduction

Hewlett Packard (HP) introduced the DeskJet printer in 1988. The product was very popular and as the demand increased there was also a need to increase the supplies in order to meet the demand. The supply to the European market was complicated by the different conditions of each market requiring the printers to be customized to meet the needs of the different users. While the core aspects of each printer model were the same, there were a number of variations for the different markets. The printers had to be equipped with the correct power supply for the destination; either 110v or 220v along with the correct plug type. There was also the need to accommodate the different languages with variations for the packaging and instruction leaflets. This resulted in six different printer variants to account for the power and language differences.

There were also problems with forecasting the demand, which could fluctuate significantly over different months and between different countries. While some countries had shortages of a particular printer, others may have had a surplus. The different variances on the inventory meant that surplus inventory from one country is not easily transferable to another country.

In the printer market it was important that HP had sufficient stocks to supply demand when it emerged, especially as the market develop, if HP printer was not available then a consumer may have purchased from another company. Therefore, stock outs resulted in...