Hewlett Packard Group 4

7/28/2019 Hewlett Packard Group 4

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Group- 4

Chetan Mehta (12EX-013)Himanshu Shekhar(12EX-021)Madhumanti (12EX-023)Nitin Gera (12EX-030)Sreekant Sukumar (12EX-049)Vivek Kumar (12EX-056)



Founded in 1939 by William Hewlett & David Packard

Headquarters in Palo Alto, CaliforniaStarted with electronic test & measurement equipment

Now into computers & peripherals

50 worldwide operations with $13.2 billion revenue andmillion net income in 1990

Organized partially by product group and partially by fThe peripherals group is HP’s 2nd largest among six prodwith $4.1 billion revenue at 1990

The peripheral group identifies new market opportunitiexploits it like disposable print-head in Ink-jet printers &

paper plotters



Production

Materials

Distribution

Europe

Asia-Pac

North AmI

-

Word

Customer needs

–

Product Availability

Agreement on rig

level of Invento



Small workgroup/ personal printers – worldwide sales a

million units in 1990 amounting $10 billionHP introduced Desk-Jet in 1988 and in 1990 it reached 60about $400 million

Three major markets:

United StatesEurope – western & easternAsia Pacific



Company Market Year of la

HP (ink-Jet) United States Late 1980s

Canon Japan 1990

Epson,Mannesmann-Tally, Siemensand Olivetti

Europe 1991



Established in 1979

HP consolidated personal printer activities from four sit

Boise, Sunnyvale & Corvallis) to VancouverAt 1979 manufacturing cycle time was 8- 12 week and inlevel was 3.5 months

• Came out with “Kanbain-Time

•

Reduced inventory fromonths to 0.9 months• Early models were not

total designed capacity• In 1988 with Desk-Jet V

reached excellence



PCAT

FAT

Supplier

Supplier

IC

Mfg

Supplier

Print

Mech

Mfg

Supplier

US DC

European

DC

Far East

DC

IC Mfg = Integrated Circuit ManufacturingPCAT = Printed Circuit Assembly & TestFAT = Final Assembly & Test

Print Mech Mfg = Print Mechanism Manufacturing

Loca



PCB

DeskJet

Printer

Raw PCB

Raw

Wafers

ASIC

Raw Head

Driver Board

Cables

Keypad

Motors

Plastics

Power

Supply

Print

Mechanism

Manuals

Versions:A, AA, AB, AQ, AU, A



Inventories were kept for the components & raw materia

No inventories between PCAT & FAT and no finished go

inventories were keptTotal factory cycle through PCAT & FAT was about a we

Transportation time from Vancouver to US DC at San JoCalifornia was about a day whereas for Europe & Asia itfive weeks

Transportation was through ocean to Europe & AsiaResellers were not willing to carry high level of inventor

DCs had to keep “Target Inventory Levels” ( forecasted safety stock)

Europe & Asian DCs had to maintain more safety stock

their product available at any point of time



Delivery of Incoming materials(lateshipments, wrong parts)

Internal Process

Demand

Delamanufacttime to rep

stocks

Inve build back



Vice PresidentMarketing HP

WorldwideDistribution

Manager

DC OperationsManager

D

D

M

PeripheralGroup Manager



Two main performance measures

Line Item Fill RateOrder Fill Rate

Secondary performance measures included inventory leper gross shipment dollar

Two major costs were freight & salaries

Freight and Percentage of Effort to support a particular pwere charged back to that product line

DeskJet fit well into standard process whereas other prorequire “integration”

Total number of customer ordetime/total number of customer

Total number of customer order mulfilled in time/total number of custom



The process has four steps:

1. Receive complete products& stock

2. Pick various products asper customer order

3. Shrink-wrap the order &label it

4. Ship the order throughappropriate carrier

DC’s material man

system supporteddistribution

“Integration” needassembly processeMaterial Resource

& Bill Of MaterialThis hampered staprocess and createconfusion



Vancouver worked on supplier management, improving

yields and reducing downtimes at the plantThe main problem was demand forecasting especially in

Calculation of “safety stock” to be revised to make it resforecast errors and replenishment lead times

A team was formed to calculate “safety stock” scientifica

Two major issuesChoice of inventory carrying cost to

be used in Safety Stock

Choice of target Line Item Fill Rate

Company12% to 6

Com98%



Option Nov. Dec. Jan. Feb. Mar. Apr. May June July Aug.

A 80 0 60 90 21 48 0 9 20 54

AA 400 255 408 645 210 87 432 816 460 630

AB 20572 20895 19252 11052 19864 20316 13336 10578 6096 1449

AQ 4008 2196 4761 1953 1008 2358 1676 540 2310 2046

AU 4564 3207 7485 4908 5295 90 0 5004 4385 5103

AY 248 450 378 306 219 204 248 484 164 384

Total 29872 27003 32344 18954 26617 23103 15692 17431 13405 2269



Vancouver’s setting up a sister plant in Europe

Would the volume in Europe large enough to just

site?Where should it be located?

Let us have required levels of inventory as it does nointo P&L statement when converted to sales; but lossdecreases revenue

Use of air transportation to Europe to reduce lead timrespond to customer need of availability of product

Air freight is expensive, would it worth?

How to address the problem in demand forecasting?



Thank You..

Pro

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Hewlett Packard Group 4