hewlett packard group 4
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7/28/2019 Hewlett Packard Group 4
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Submitted by:
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)
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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
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Production
Materials
Distribution
Europe
Asia-Pac
North AmI
-
Word
Customer needs
–
Product Availability
Agreement on rig
level of Invento
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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
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Company Market Year of la
HP (ink-Jet) United States Late 1980s
Canon Japan 1990
Epson,Mannesmann-Tally, Siemensand Olivetti
Europe 1991
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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
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PCAT
FAT
Supplier
Supplier
IC
Mfg
Supplier
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
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PCB
DeskJet
Printer
Raw PCB
Raw
Wafers
ASIC
Raw Head
Driver Board
Cables
Keypad
Motors
Plastics
Power
Supply
Mechanism
Manuals
Versions:A, AA, AB, AQ, AU, A
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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
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Delivery of Incoming materials(lateshipments, wrong parts)
Internal Process
Demand
Delamanufacttime to rep
stocks
Inve build back
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Vice PresidentMarketing HP
WorldwideDistribution
Manager
DC OperationsManager
D
D
M
PeripheralGroup Manager
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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
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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
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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%
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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
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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?