HP Deskjet Printer Supply

Topics: Supply chain management, Inventory, Inkjet printer Pages: 21 (6438 words) Published: February 10, 2014
Table of Contents
Executive Summary
Issue & Issue Analysis
Recommendation & Implementation
Monitor & Control
Executive Summary
As Manager of Special Projects, Material Department at HP Vancouver division, it is my decision to move towards to postponement of Product Differentiation. The decision regarding the postponement strategy is of very strategic importance to future growth of HP. I recommend full review of inventory management system for desk jet printers & design a strategy to implement processes leading to postponement of product differentiation, in order to reduce inventory imbalance & satisfy customer demands. The short term strategy will include recalculation of safety stock, reorder points & reorder quantity, Identification of certain models that needs to discontinued and improvement in demand forecasting system. New Key Performance indices (KPI’s) reflecting performance of entire supply chain will be developed. We will have to design the product & realign the manufacturing & distribution activities so that customization step leading to product variation occur at most efficient point in the supply chain, giving lowest supply chain cost . In long term the design of printers & subsequently manufacturing process will be changed to enable installation of power supply unit at final DC levels. We would be moving towards Design for Localization. Finally possibility of developing universal power supply will be explored. A time line will be setup to implement postponement strategy & development of universal power supply. This report will be used for further discussion with Operation Manager & Worldwide Distribution Manager Issue & Issue Analysis

Inventory Imbalance & Customer Service Levels
The European Distribution center was overflowing with inventory of printers for which they had no customers, while inventory of in demand printers had reduced to very low levels. Senior corporate management had expressed concern on high levels of inventory levels and low customer fill rates. Lack of Common Supply Chain Metrics & Organizational Barriers Though the overall performance of entire supply chain depends on the joint performance of all the channel members, the objective of each member have little to do with supply chain’s performance. Each entity of supply chain (design, factory, dc etc) has their performance measures & evaluation responsibilities. There is no performance measure for the complete supply chain. Vancouver plant has its quest for zero inventory & high production rate. The DC’s have their own index for customer fill rate. Competition & Marketing Channel

The printer industry is highly competitive. The low quality printers like dot matrix are getting outdated in favor of inkjet & laser printer. With increase in demand of computers, the peripheral products like printers were becoming commodity products. The customers wanted these products off the shelf. The brand name was no guarantee of sale. Customers used criteria like cost, reliability & availability to make the decision. More & more sale was generated by retailers, who wished to carry no inventory & expected HP to provide high levels of product availability. The computer dealers were no longer important part of marketing channel. Inventory Management System

The manufacturing plant at Vancouver worked on safety stock & replenishment level set arbitrarily. The current parameters were set up when dot matrix models ruled the market & others printers were either non existent or being developed. As result they made & shipped more of old version & few of laser & inkjet printers. This left DC with high inventory of slow movers while in demand printers were often out of stock. Inventory stocking policies have never been adjusted to reflect the market realities. Product-Process Design

The current design of manufacturing process though very efficient & geared for...
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