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HP Supply Chain Case Study
HP Supply Chain Case Study
Company information
Objectives
• Overview of Supply Chain
• Customer Order Decoupling Point
• Conflicting Goals of Departments
• Few Concepts
• HP Case Study (Interlinking Above Learning so
that you can derive solutions in the class)
Supply Chain
Physical Goods Flow
Cash
Fulfillment
Sourcing Warehouse
Manufacturing
(Suppliers of & Distribution
(WIP,FG)
Comps,Raw) (Storage &
Retailers)
Transportation & Logistics
Upstream Downstream
Information
Customer Order Decoupling Point
The point in the material flow(Value chain) where the product is From the decoupling
linked to the specific customer. Each stage the form changes point
•Purchase/Manufactu
re to plan to create
Forecast Driven - Push-Pull Boundary inventory
•Assemble/Finish to
order from the point
•Increase Lead time&
Opportunity lost
•Increase in inventory
& risk obsolescence
- Sales Order
Conflicting Goals
Purchasing Manufacturing Warehousing Customers
9
Main Issues
• Satisfy Customer Needs – Right Product and
Less Inventory as the industry is highly
competitive
• Bringing in Alignment across Dif. Departments
right Inventory levels
HP Case Challenges
Problems Causes
•Too much inventory in the DeskJet •Late Shipments/Procurment
supply chain (High Safety Stock) •Process Delays
•Europe still needed more more •Uncertainty about correct inventory
inventory levels
•European and Asian DCs cannot •Options due to geographic options
meet because of mismatch. (localization)
•Inventory Imbalance •Long lead times
•Service level deterioration •Uncertain market
•Difficulty at getting divisions to work
together
HP DeskJet Case: Options
• Short Term But HP Focus on
– Rationalize safety stock •Conflicting Goals (Wrong
• Long Term Performance Measurement)
– Air shipment •Inventory @ Wrong Place
– European factory •Wrong Problem focus
– More inventory •Value Stream mapping
– Better forecasting
– DC localization