1
DISCUSSION THREAD
Discussion Thread: Hewlett Packard Company: Network Printer Design for Universality
Shannel Gayle Bennett
School of Business, Liberty University
BUSI 740 – Managing the Supply Chain
Dr. Deloris Easley
June 18, 2023
Author Note
Shannel Gayle Bennett
I have no known conflict of interest to disclose.
Correspondence concerning this article should be addressed to Shannel Gayle Bennett.
Email: sygaylebennett@liberty.edu
2
DISCUSSION THREAD
Hewlett Packard Company: Network Printer Design for Universality
In the case presented, the Hewlett-Packard Company (HP) is tasked with deciding
whether or not the organization should use a universal power supply that can support 110 volts in
North American printers and up to 220 volts in European printers (Simchi-Levi et al., 2020). The
project team is confident that a universal power supply will give HP the capability to postpone
the printer specification process by at least two months and that a universal power supply will
improve HP’s position in the market where demand is concerned and reduce the organization’s
inventory cost over time (Simchi-Levi et al., 2020). This commentary will overview the
universal power supply as a postponement strategy, discuss the costs and benefits associated with
a universal supply versus a product life cycle, and provide recommendations that HP should
consider should the organization decide on a universal power supply.
Postponement Strategy
In what way is a universal power supply a postponement strategy?
The universal power supply is a postponement strategy because (a) it provides production
flexibility; (b) it can improve manufacturing and distribution capabilities, (c) it can help HP
effectively manage and reduce inventory costs, and provide additional cost savings for the
organization, and (d) improve supply and demand uncertainty thereby improving lead times and
customer satisfaction (Phares & Richey, 2021). Several research studies posit that a
postponement strategy is centered around demand uncertainty and improving inventory costs.
For example, a study by Weskamp et al. (2019) explained that postponement strategies
are a suitable approach to address supply chain risks and problems with customer demands and
issues with increased inventory stocks and avoid supply shortfalls. The universal power supply is
3
DISCUSSION THREAD
intended to fix some of the same issues cited by Weskamp et al. (2019) and thus implies that HP
is utilizing a postponement strategy. The universal power supply as a proponent strategy will
allow HP to reduce inventory costs and focus on other cost-minimization tactics through robust
forecasts and demand-driven operations. Additionally, the universal power supply indicates a
proponent strategy because implementing this change will help HP improve product variety, the
firm competitive advantage through differentiation strategy creation, supply chain efficiency, and
improved service levels Phares & Richey, 2021).(
Overview of A Universal Power Supply
What are the costs and benefits of a universal power supply (feel free to make assumptions)
HP has very little information regarding the universal power supply. Per the partners in Japan,
the universal power supply will increase costs by $30 per unit (Simchi-Levi et al., 2020).
Resources consistently change throughout a project, and there may be rising costs that HP may
be unable to anticipate. However, HP can assume that a new universal power supply may incur
costs associated with sourcing the material needed for project completion, labor costs: hiring new
engineers to complete the project, technology costs, increased costs for customers, supply chain
costs: manufacturing and distribution, costs associated with the management and development of
the new product, and incurred costs if the product is delivered to market on a specified date.
HP might lower some overhead costs by looking at ways to bring the product to market
while achieving a competitive advantage and sustainable innovation. Mainly, HP should focus on
collaborating in supply chain networks and consider sustainable collaborative R&D initiatives
that improve product development and execution (Wang et al., 2021). HP may benefit from R&D
initiatives since the universal power supply is a new product that HP is hoping will spearhead
innovation around the next generation of network laser printers.
4
DISCUSSION THREAD
Conversely, HP is also poised to benefit from a universal power supply. The production
team highlighted some primary benefits for HP: (a) the universal power supply will afford HP
some flexibility in postponing the specification of the printer engines (Simchi-Levi et al., 2020);
and (b)improving demand capabilities in related markets and reducing HP’s overall inventory.
Suppose HP can execute on delaying the individual market demand. In that case, the organization
will better manage the demand needed versus forecasting models that predict the demand, which
sometimes runs into aggregating more than the demand needed or even less than the required
amount.
Through this initiative, HP can reduce costs necessary associated with production, reduce
lead times, improve initiatives around logistics, increase order fulfillment, and improve customer
satisfaction. For example, customer requirements are the main drivers in developing and
recreating products (Li et al., 2021). Therefore, if HP can create a universal power supply that
appeals to customers, the organization can benefit from more customers adapting to the new
product. HP will also benefit from improved obsolescence strategies around consumers wanting
to purchase the new and improved product because it now has advanced technological
capabilities. (Li et al., 2021).
Furthermore, HP will be able to respond to customers promptly and improve customer
loyalty over time. Finally, HP may also benefit from lower transshipment costs, thereby
improving the risk-pooling potential of the organization. A study conducted by Zhao and Siemen
(2021) explained that inventory sharing, also called transshipment, can increase profitability
through risk sharing, reduce system inventory, increase service levels, and offer additional
supply-side and demand-side benefits.
5
DISCUSSION THREAD
Costs and Benefits versus Product Life Cycle
How would such costs and benefits be different over the product life cycle?
Over the product life cycle, HP may incur costs that will benefit the firm as the product
launches, enters, and exits the market. However, HP will also have to contend with some
drawbacks of bringing the universal power supply to the market. Some potential benefits for HP
include reduced cost of transportation, inventory carrying costs will decrease over time, and HP
may be able to cut costs relating to sourcing since HP is already sourcing locally. Even though
HP can reduce costs and benefit from local sourcing opportunities, HP can also benefit from
backup sourcing if local sourcing parties experience supply uncertainty. In particular, HP can use
backup sourcing to procure bulk items from off-source suppliers making the off-source supplier
an interim primary supplier. At the same time, capitalize on a possible low cost per unit (Pan et
al., 2022). Additionally, HP can use local suppliers to make up for any shortages the company
encounters during production.
On the other hand, HP may incur additional costs to the business and customers,
particularly costs associated with hiring engineers, training personnel, product package redesign,
and reworking the HP system to accommodate the universal power supply. The projected cost of
$30 per unit will considerably affect customers through the product life cycle. For example, even
though the project costs are $30 per unit, other costs in the production phase can drive up the
cost per unit, forcing HP to raise the price of the universal printer before it hits the market.
Increasing prices can force some customers to switch brands, affecting HP’s customer base and
brand loyalty.
Another impacting cost factor for HP is to assume a comparable or higher price for the
universal power supply, only for the product price to steadily decline once the product hits the
6
DISCUSSION THREAD
market (Takayuki & Gemba, 2022). In turn, HP is forced to extend the production life cycle,
leading to additional accrued costs, and develop additional branding and differentiation strategies
needed to bring the product to market.
Operational Improvements
Besides deciding on a universal power supply, what other operational improvements can you
suggest to HP Bose?
Some of the operational improvements that HP Bose should consider are, looking at other
areas where a postponement strategy may be beneficial since the current competitive landscape
of the economy has created increased opportunities for this strategy HP (Prataviera et al., 2020).
may benefit from a manufacturing and logistics postponement strategy that utilizes time, form,
and place postponement. Through these strategies, HP may be able to reduce demand uncertainty
and improve customization initiatives for customers (Prataviera et al., 2020).
Another consideration for HP is pricing flexibility strategies that accrue profit during
demand uncertainty periods. For example, HP can use dynamic pricing to extend a discount to
customers with the premise that the organization can utilize longer lead times (Kostami, 2020).
Another option for HP to consider is to offer sales promotion opportunities. HP could
temporarily decrease the laser printer's price so the firm can offload excess inventory. This
strategy could increase the value proposition opportunities for HP and customer segmentation.
Finally, considerations should be given to improve lead times so that HP will have the capability
to manage large orders. A good example is for HP to
7
DISCUSSION THREAD
Adoption of a Universal Power Supply
What would be your recommendations about the adoption of a universal power supply?
HP should adopt a universal power supply based on all the information presented in this
case. The adoption will allow HP to create a product that will enhance customer value, improve
brand competitiveness, and drive profits. Given the economy’s competitiveness, the universal
power supply may improve the firm’s performance because: (a) the benefits will outweigh the
costs should HP decide to move forward; (b) new product adoptions are important engines that
fuel the company growth (Zeng et al., 2020); and (c) customers are the core of brand
effectiveness, as such businesses should continuously grow, improve, and innovate products and
service in order to maintain brand loyalty and future relationships that will aid company growth
and longevity.
8
DISCUSSION THREAD
References
Kostami, V. (2020). Price and Lead time Disclosure Strategies in Inventory Systems. Production
& Operations Management, 29(12), 2760–2788. https://doi.org/10.1111/poms.13248
Li, Y., Zhang, M., & Chen, D. (2021). Product obsolescence assessment based on the hybrid
uncertain Information Axiom. (8), 375–396. Journal of Engineering Design, 32
https://doi.org/10.1080/09544828.2021.1913486
Pan, W., So, K. C., & Xiao, G. (2022). Benefits of backup sourcing for components in assembly
systems under supply uncertainty. European Journal of Operational Research, 302(1),
158–171. https://doi.org/10.1016/j.ejor.2021.12.014
Phares, J., & Richey, R. G. (2021). Planned disruption and unintended consequences:
Postponement by strategy vs. intervention in the U.S. beer supply chain. Business
Horizons, 64(3), 369–377. https://doi.org/10.1016/j.bushor.2021.02.005
Prataviera, L. B., Perotti, S., Melacini, M., & Moretti, E. (2020). Postponement Strategies for
Global Downstream Supply Chains: A Conceptual Framework. Journal of Business
Logistics, 41(2), 94–110. https://doi.org/10.1111/jbl.12250
Simchi-Levi, D., Kaminsky, P., & Simchi-Levi, E. (2021). Designing and managing the supply
chain: Concepts, strategies and case studies (4th ed.). New York, NY: Richard D. Irwin,
Inc.
Takayuki S., & Gemba, K. (2022). Using natural language analysis of product reviews to detect
features contributing to life cycle price decline. (1), 67–Forum Scientiae Oeconomia, 10
80. https://doi.org/10.23762/FSO_VOL10_NO1_4
9
DISCUSSION THREAD
Wang, C., Cen, Y., Sun, R., & Ying, H. (2021). Optimal distribution of profit and leadership for
sustainable collaborative R&D projects. Journal of Cleaner Production, 313, N.PAG.
https://doi.org/10.1016/j.jclepro.2021.127874
Weskamp, C., Koberstein, A., Schwartz, F., Suhl, L., & Voß, S. (2019). A two-stage stochastic
programming approach for identifying optimal postponement strategies in supply chains
with uncertain demand. , 123–138. Omega, 83
https://doi.org/10.1016/j.omega.2018.02.008
Zeng, F., He, Q., Li, S., & Luo, A. (2023). Residential mobility boosts new product adoption.
Psychology & Marketing, 40(5), 1012–1025. https://doi.org/10.1002/mar.21777
Zhao, H., Xu, L., & Siemsen, E. (2021). Inventory Sharing and Demand-Side Underweighting.
Manufacturing & Service Operations Management, 23(5), 1217–1236.
https://doi.org/10.1287/msom.2020.0875
