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(case explanation)


• Hewlett-Packard Company was founded in 1939.

• Founders were William Hewlett and David Packard.
• Headquarters in Palo Alto, California.
• Diversifying from its base in electronic test and measurement
equipment into computer and peripherals production, Which
now dominated its sales.

• DeskJet printer was introduced in 1988 and had become one of

HP’s most successful products.
• Sales had grown steadily, reaching a level of over 600,000
units in 1990($ 400 million).
• The inventory problems in the European distribution center. HP faced long delivery lead
time of about four to five weeks from its production facility in Vancouver, Washington, to
Europe. The Vancouver plant is a high speed, high- volume facility where manufacturing
takes about a week.

• HP concerned with high inventory levels and inventory imbalance in Europe. One of the
characteristics of the DeskJet product line is that it is customized for local markets, a
process called localization. This involve adding labeling and documentation in the correct
language and customizing the power supply for the correct voltage level and plug.

• Customization is done in Vancouver many weeks before the products arrive in Europe.
Furthermore, once the printers arrive in Europe, inventory imbalance might occur in the
following sense:
the European DC often finds itself with too much inventory of printer customized for certain
markets, and not enough inventory of printer customized for other.
• What are the cause of these problem?
uncertainty about how to set the correct inventory level.
different localization options makes inventory difficult to manage.
long lead time to difficulty in forecasting.
high safety stock.
uncertainty in many local market makes forecasting difficult.
maintaining co-operation between the various HP divisions.

There were four process steps:-

• Receive (complete) products from various supplier and stock
• Pick the various products needed to fill a customer order.
• Shrink-wrap the complete order and label it.
• Ship the by the appropriate.
What are the frameworks, tools and concepts that companies can use as they
think about the product engineering process and its impact on supply chain

The supply chain: which focuses on the flow of physical products from
supplier through manufacturing and distribution all the way to retail outlets
and customers, and
The development chain: which focuses on new product introduction and
involves product architecture, make/buy decisions, earlier supplier
involvement, strategic partnering, supplier footprint, and supply contracts.
These two chains will intersect as products move from development to
production, and just as clearly, decision made in the development chain
will impact the efficiency of the supply chain.
How can design for logistics concepts be used to control logistics costs and
make the supply chain more efficient?

DFL addresses ,using the following three key components:-

• Economic packaging and transportation.
• Concurrent and parallel processing.
• Standardization.
What is delayed differentiation and how can Hewlett-Packard use delayed
differentiation to address the problem described in the case above? How
can the advantage of delayed differentiation be quantified?
• when should supplies be involved in the new product
development process ?

This involvement of suppliers on design ideas to making

suppliers fully responsible for the design of components or
systems they will supply. Moreover, suppliers may be
involved at different stages of the new product development
process. Early supplier involvement is a key coordinating
process in supply chain design, product design and process
What is mass customization?
• Mass Customization is an operational strategy focused on inducing
velocity and flexibility in a make-to-order production process, with
the capability of producing at a minimum, a quantity of one, or
large quantities with minimal changeovers and interruptions. Mass
Customization products compete directly with standard products,
providing a company a competitive edge by having the capability
to manufacture specialized or custom products at the speed,
volume, cost, and quality as standard products.
• Mass Customization requires an agile supply chain to function
optimally. Supply chain agility is the extent of network capability
that the organization possesses. Key to the success of an agile
supply chain is the speed and flexibility with which these activities
can be accomplished and the realization that customer needs and
customer satisfaction are the very reasons for the network.