HP Deskjet Printer Supply Chain

Place your screenshot here

Ranjith P - 19MBMA05
Ameer Ahammed - 19MBMH13
Mohamed Ashik A S - 19MBMA11
Muhammad Shanif - 19MBMH21
 INTRODUCTION
● HP was founded in 1939
● Bill Hewlett and David Packard
● In 1990, 50 operations, Revenues of

$13.2 Billion and Net income $739 Million

● The Peripheral Group was 2nd Largest one
2
 PRODUCT GROUPS
1. Printers
2. Plotters
3. Magnetic Disc
4. Tape Drivers
5. Terminals
6. Network Products
3
 Deskjet Printer
● Introduced in 1988
● Main division is located in Vancouver
● In 1990, sold 600,000 units, $400 million
● Letter quality resolution, using standard paper
● Mission statement:
‘To become the recognized world leader in low cost
premium quality printers for offices and homes’
Other Printers:
1. Ink-jet
2. Laserjet Printer
3. Impact/Dot matrix
4. Thinkjet Printer
 Problems and Issues
● Determine the right level of inventory
● Find the best way to satisfy customer while minimizing
inventory
● Reduce the uncertainty caused by delivery of incoming
materials
● Improving manufacturing and equipment efficiency
● Reduce downtimes

6
 Problems and Issues
Transportation
● It takes long time to ship products from US to Europe and Far
East
● If there is a shortage in Europe and Far East, it is hard to fix it
● Reduce transportation lead time in order to diminish long
replenishment lead time

Forecast errors, especially in Europe

● Product shortages and piled up inventory
● Inconsistent inventory level causes unsatisfied customer and
loss of sales
● Various demands from the three regions (US, Europe and Far
7
East)
8
 Demand Analysis

Europe
North America

Asia-Pacific

Europe
North
Americ
a

Asia-Pacific 9
10
11
Product Portfolio - Europe
%
LH HH

Variance
LL HL

Demand
❖ High Demand and High Variability (HH)
❖ Low Demand and High Variability (LH)
❖ High Demand and Low Variability (HL)
❖ Low Demand and Low Variability (LL)
12
 %

Asia-
Pacific

North
America

13
 The Vancouver Division
● Established in the year 1979,Vancouver,Washington

● Issues during the initial times

○ Manufacturing cycle time- 8 to 12 weeks

○ Months of inventory - 3.5 months

14
 The Kanban Process

● Developed by Taiichi Ohno

● Commonly known to automotive sector as “Toyota Nameplate System”
● Kanban process is a scheduling system for Just in time manufacturing(JIT)

15
● Improvements after implementing Kanban process

○ Manufacturing cycle time reduced to 1 week

○ Months of inventory reduced to 0.9month

● Transportation
○ From Vancouver to US DC, about a day
○ From Vancouver to Far East DC and Europe DC, 4-5 weeks

16
HP Deskjet Printer Supply Chain

17
Modified Supply Chain

18
 Solutions
1. Make the forecast more accurate
2. Collecting related data month by month for every single product, and
also examine aggregate demand
3. To be prepared to manufacture customized power supply and manual
4. Analyze HP and competitor’s sales of previous years
5. Define an average sale of each month, calculate standard deviation, be
aware of trends
6. Similarly, data loss of sales, stock outs, and backorders have to be
examined
7. This research has to be done especially for Europe Market and European
customer behavior
8. Customer surveys and analyze expectation/satisfaction 19
 Solutions
9. Making the forecast more accurate provides some benefits
◦More accurate forecast provides more reliably safety stock level and
reduce amount of unnecessary products stocked in inventory
◦Reduce the replenishment lead time
10. Reduce unsold products, it is crucial because product’s technologic clock speed is
high
11. Reduce inventory holding cost and cost of unsold products
12. Avoid stockouts, unsatisfied demand, loss of customer

20
 Solutions
13. Increase the capacity of inventory
● Analyze the cost of lost sales
● European DC runs out of space to store as DC tells and complains
● If investing on a new inventory diminishes the lost sales and it is
more profitable
● Revise safety stock rules, so the target inventory levels that is sum
of safety stock and forecast

21
 Solutions
14. Establishing a new facility
● Since the transportation lead time is long, in order to satisfy customer
demand, setting up a plant might be a solution, similar to set up a new
inventory
● Since the forecast is not good in Europe, to decide whether factory is
opened or not, European sales and market have to be examined
precisely and volume of production should be worth it
● It is possible to revise the DC that is operated to complete the
integration of printers, not to manufacture a printer from a rough

22
 Solutions
15. Transportation
● It is very long time to transport products from US to Europe and Far
East
● Vessels are chosen as transportation vehicle
● Air transportation would shorten the lead time and make the
company ready to satisfy customer

23
Thanks!

Any questions?