HEWLETT- PACKARD: SUPPLYING THE DESKJET PRINTER IN EUROPE

SUBMITTED TO DR. P.K. DASH ASSOCIATE PROFESSOR OM 2 IMI BHUBNESWAR

SUBMITTED BY GROUP 2 2012-2014 BATCH PGDM

CASE INTRODUCTION The DeskJet printer was introduced in 1988 and has become HPs most successful product. Currently, the management is facing increasing difficulty of getting accurate forecasts. Therefore, it needs to revisit the inventory model and safety stock rules. The supply chain includes the suppliers, manufacturing sites, DCs, dealers and customers. The 2 key stages in manufacturing are PCAT and FAT. All the manufacturing and integration is done before the product reaches DC. Our objective is to implement a scientifically based safety stock system that will be responsive to forecast errors and replenishment lead times.

Compare the results from the new inventory model to the current policy of carrying one months average inventory at DC. After analysing the initial given data, it was found that the chances of stock out are high in the company if it continues with the current policy of carrying one months average inventory at the DC. Considering the varying demand, it will be easier to manage the demand for different models if the Q model is adopted. The time consumed at the manufacturing unit will also be reduced, in turn reducing the lead time.

Evaluate the idea of providing generic products to DC and integrating the product by packaging the power supply and instructions manual at DC just prior to delivery to the European reseller. The model of providing generic product to DC is a practical one. Instead of integrating everything at FAT and then sending 6 different models of the product to different parts of Europe, it is better to localize the machine at the DC itself. This will help HP reduce its cost as there will be no shipping charges for the subassemblies. To execute this model, HP should keep in mind that the DC should be capable enough to integrate the required products. That is, the DC has to be converted into a unit that can both store and assemble the product. It will certainly have some cost implications.

What are your recommendations to HP? The company can start Distribution Centers (DC) localization in Europe itself. Provide extra benefits to members of the distribution channels to improve their efficiency. Through information flow H.P can improve coordination in all the distribution channels. Improve forecasting through different strategies. They can visit the markets of Europe to better understand the customer needs and demand analysis.