Hewlett-Packard Company:

Network Printer Design For

Universality

Presented by: Waqas Iqbal & Cao ZhiChao

The Hewlett-Packard
Company
HP was one of the silicon valleys legends.
Innovation was the key to HPs strategy & brought the
world products such as- Hand held calculator
- Ink-jet printers etc.
HP spends about 10% of its revenue on R&D.
In 1990, HPs revenue was 13.2b$ and profit was
739m$.
HP held a dominant 57% of the worldwide laser printer
market.

Network Laser Printer Division

Wants to introduce a new
product (Rainbow).
Having Universal power
supply.
Next generation printer.
High end printer with
special configuration
options.
High customization
variety.

HP Company Main Issues The power specification for printer is different in North
America(110 volt) and European (220 volt). This
difference brings a big challenge in HPs market
forecasting, Stock out and transshipment between
regions.
Long Lead time for engine manufacturing (at least 14
weeks).
If universal power supply is used then increase of 30$
cost for each printer.

Universal Power Supply

Cost and Benefits over Product Life

cycle
At the beginning of the life cycle, cost of stock out
would be high.
At the maturity stage, extra cost can be a real
disadvantage. However better forecasting of demand
helps lower the level of inventory.
At the ending life cycle, cost of stock out is lower than
compared to at beginning because there is less fear of
losing sales.

Postponement Strategy
Delay the point of differentiation
Under postponement certain part of the supply chain
are undertaking a push strategy while other parts
perform a pull strategy- Upstream suppliers provides commodity parts
using a push
strategy
- Downstream supplier employ a pull strategy &
do not
customize products or services until an order

Cost Impact Of Postponement

Decrease

Inventory carrying cost

Inventory holding cost

Stock out cost

Standardization decreases admin cost

Additional cost of transshipping

Increase

$30 material cost

Product/Process redesign for standardization may increase

system cost

Benefits Of Postponement
Lower risk of unsold items.
Easier upgrade, service at customer location.
Increased order fulfillment.
Faster response to customer.

Learning
Postponement is the key strategy for providing multiple
configurable products at low cost.
If the design of a product is modular than we can
manufacture modules separately and at the same time.
This shorten the total time required for production.
Modular design also helps in late product life cycle.

Questions
1. In what way is a universal power supply a
postponement strategy?
Sol:
1, Manufacturing is the foundation of core production stage.
2, Integration is the core part of product and key components
together.
3, Custom is further with different accessories together to
form a significant differences between the products.
4, In local, for product localization measures to adapt to the
local requirements of different countries and regions.

Questions
2. What are the costs and benefits of a universal power supply?
Sol:
Costs:
higher cost per units=$50
lengthen Break-Even Time
problems allocating supply

Benefits:
increase forecast accuracy
less safety stock required
fewer lost sales
fewer stock out

Questions
How would such costs and benefits be different over the product
life cycle?
Sol:
Over the product life cycle, both costs and benefits are different.
At the beginning life cycle of product, the cost of stock out would be high.
Every order lost would not only result in lost in revenue but also future
revenue.
At the ending life cycle, cost of stock out is lower than compared to at
beginning.
There is less fear of losing future sale.

Questions
4. Besides deciding on a universal power supply,
what other operational improvements can you
suggest to HP Boise?
Sol:
1, HP should consider is improving forecasting
ability to ensure appropriate demand is met in all sector
while optimizing inventory level.
2, HP should look into creating similar
standardization of power supply in other product offering

Questions
5. What would be your recommendations about the
adoption of a universal power supply?
Sol:
Recommendations:
Recommend HP to adopt universal power supply as the
potential outweigh the costs.
It will add value to customer in sense HP may be the only
company that offers universal power supply.

THANK YOU