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Hewlett-PackardCaseStudy.pptx

Hewlett-Packard Case Study

Derrick Bradley

MGT/521

10 March 2020

Is universal power supply a postponement strategy?

The universal power supply offered the HP Co. a better approach

The universal power supply is best approach

Enables the company to make their marketing decisions

The universal power supply offered the HP Co. a better and new business approach in attempting to meet their demanding needs of printing product and sell to markets all across the globe. Being an effective business marketing approach, the universal power supply is essential in sense that it would enable the company to make and evaluate their marketing decisions later and hence be able to prevent such localized areas that are practically expensive. This would help in making predicative and precise forecast. On course of marketing of the HP printers, the company was faced with formidable challenges, particularly in consideration of the increasing demands, for instance, in determining when, where and how much was required.

2

Cont.

The challenging was to make accurate forecast

Europe would require an approximation of 20000 units

And the United States about say 3000 units

The numbers are 20,000 and 10,000 units

To make accurate forecast of the mixed demands of the HP printing machines in different geographical locations was a challenging issue in the company. For instance, while during the production process, it can be anticipated that Europe would require an approximation of 20000 units and the United States about say 3000 units. In turn, however, these numbers may be 20,000 and 10,000 units respectively. It is noteworthy that the marketing conditions in various geographical locations can influence the market demands and such conditions change dramatically in few weeks or even month.

3

Cont.

Market demand becomes practically difficult,

It is recommendable for the company to plan ahead of time

And make specification of the demand for their printers five months earlier

Market demand becomes practically difficult, and hence it is recommendable for the company to plan ahead of time and make specification of the demand for their printers five months earlier, and before making delivery. Therefore, with the use of the universal power supply, the company is capable of solving this challenge and it is not necessary to the exact number for their market. This is because the company has only to make estimation of the marketing demands globally for duration not below five months.

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Analyze the case in terms of the supply chain metrics

The partners of Co. ventured into accessories’

HP Boise factory builds printed circuit boards

Installation of driver software manuals is done in the distribution center

The partners of the famous HP Company ventured into the manufacture of accessories that are used to supply power and engine manufacture. Take an instance of the HP Boise factory, which builds printed circuit boards that are then combined in a different partner factory.

Installation of driver software, power chords manuals the anterior panel happens in the distribution center. The remaining accessories are assembled at the DCS. Most of these products are then transported to Europe or North America (Kleijnen & Smits, 2013).

5

Cont.

The transportation of is done through partner factories

Customization of the products is only done when customer places order

They are transported by trucks to the suppliers

The transportation of this is done differently, to North America through partner factories and those to Europe by ship. When customers order the products, customization of the products is done, and they are transported by trucks to the person who is going to sell the product to the customers. This process may take a few days to weeks. Looking at the time the process takes, for an engine to be assembled and transported to DC, it takes approximately 18 weeks. The cost of transporting a printer by air is $75 and by $15 by sea. In what way is a universal power supply a postponement strategy. The Japan Company took around four weeks to ensure that the printers were ready for shipment plus the custom clearance and the transportation time (Simchi-Levi et al., 2009). This means that if the company needed to use a universal power supply which would help the company would have at least two extra months for the implementation and planning process which would have helped in accessing accurate prediction and hence preventing the expenses that are incurred in case of localization errors. 

 

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costs and benefits of a universal power supply

Additional of $30 in the development of the new product  

Production was controlled by one company

Other competitors in the market deemed harmful

There was an additional $30 when it comes to the development of the new product and a total of $13.5 

This had one supplier for universal power, and this means that it was controlled by one company. This means that it is harmful to the product if there were other competitors in the market.

The transportation which was $75 by air and $15 by sea but the time taken by the sea was one month.

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 Benefits

The inventory was optimized

The response to the changing was improved

Reduced localization errors.

The cost of stock was reduced

The benefits and value over the production life cycle – at the start of the product life cycle, the value of the gold stocks would be relatively high. However, at the maturity state, the incurred cost can be a disadvantage to the company.

Nonetheless, improved and better forecasting of products demand is useful for helping to lower the level status of the goods inventory. However, at the end of the life cycle, the cost of the manufactured goods tends to decrease in comparison at the beginning, there is no fear of losing sales. Postponement strategy – the delaying for the point of differentiation and postponement of specific parts of the supply chains are considered as the essential undertakings since they are push strategies. However, other parts crucial in ethical manufacturing are considered to be relying on the pull strategy. The upstream suppliers are significantly vital to providing commodity parts useful in push strategy.

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How cost and benefits are different

  Product Life Cycle  Cost Benefits
Ramping-up The very high stock costs meaning that the stocks at a reselling point is more top Increased margins
Maturity Stockout the price is higher, and this said that the stock at the reseller point needs to be higher. There was a high volume but the average margin.  
End of life Transshipment cost may be at the peak buttstock out is low   Minimal margin. There is a need to create a discount and increase the demand for the product.

The Hewlett-Packard Managers from all the departments held a meeting to deliberate about the consideration, whether the use of the universal power supply applications in the next generations of laser printer networks known as Rainbow would be beneficial for the company or not. The departmental managers have final authority to make decisions but relying on the justification that defence should be provided to defend their proposal. The company has been in the process of manufacturing new generations of network printers despite that they have been struggling to establish the product market in the tech world. For instance, the power specifications for the HP machinery printers are considerably different in European society and North America, ranging from 110 volts to 220 volts. This far-reaching difference has brought significant challenges in the marketing of the company products in the market. For instance, the subsequent stockout and forecasting and transhipment between different regions have been problematic. Additionally, the HP Company is required to be providing the precise specifications to their major organizational partners. It is noteworthy that if the necessary $45 extra cost is consequentially passed through to their customers. The price increment may be having an adverse influence on revenue and sales. This is because all the company machinery printers and assemblies depend on one individual power supply, and that is the only accessory in their manufacturing sector. The power supply accessory is supplied two suppliers, global recall; design defect may need to a reputation and sales disaster. It would be difficult to switch to other brands since the company may end up losing their valuable customers for four or five generations of printers, and the generated revenue from the selling of products such as computers and ink cartridges. Assuming without the use of the universal power supply – relying on this prediction, the company's product life cycle would be 22 months, and with monthly sales of 30,000 units. In this case, therefore, the sales would amount to 500,000 but only provided that there is a 30 per cent of sold goods necessary required for shipment and transshipped. Also, the reconfiguration between the used DCs owing to improper market forecast would be disadvantaged. The received extra cost would be $80 shipment cost plus the $300 cost of the reconfiguration.

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Recommendations

There is a long lead time which goes up to 4 months.

Prediction accuracy is low

Getting better prediction methods may take time and expensive.

The amount of the system is around $6000;

With the use of universal power supply, the forecast would significantly improve such that the only ten per cent of the needed goods purposeful for transhipment and foe the reconfiguration between the DCS. It is noteworthy that the extra cost the used universal power supply is relatively small. It is important to note that with the use of the global power supply, the HP Co. will no longer be required to develop a demanding forecast. It is not clear that if the universal power supply approach is implemented in the company, the company will respond successfully to the increasing demands in the single market. However, this can be achieved through optimization of the inventories and reduction of the indirect costs that have been a hit on the SG & A. It is critical to note that the innovation is the fundamental strategy to the world products such as Ink-jet, calculator. Additionally, the company has been spending about ten per cent of its revenue on research and development. For instance, in 1992, the company's forecasting revenue was estimated to be 13.2b, and profit was amount to 700 million dollars. The company held a dominant of 50 per cent of its global printer laser printer in the year 2000. Network printer laser division – the company is intending to introduce the new innovating produce known as Rainbow. It is noteworthy a next-generation printer, having the universal power supply, the high-end printer with individual configuration options, and wider customization varieties. The HP Co. Main Issues – the power specification for printers has variations in European and North America. It is important to note that the universal power supply is essential for the cost of the printers to 45 dollars.

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References

Simchi-Levi, D., Kaminsky, P., & Simchi-Levi, E. (2009). Designing and managing the supply chain: concepts, strategies, and case studies. Boston: McGraw-Hill/Irwin.

Kleijnen, J. P., & Smits, M. T. (2013). Performance metrics in supply chain management. Journal of the operational research society, 54(5), 507-514.

Norrman, A. (2018). Supply chain risk-sharing contracts from a buyers' perspective: content and experiences. International Journal of Procurement Management, 1(4), 371-393.

Johnson, M. E., & Davis, T. (2018). Improving supply chain performance by using order fulfilment metrics. National Productivity Review, 17(3), 3-16.