Hp Deskjet Printer Case Guide

Hewlett-Packard’s

Deskjet Printer Supply Chain

Cases (A)  &  (B)

Discussion Guide & Answers

Ranjan Ghosh

 Industry characteristics: competitive, fast growing,

  exploding in Europe, changing distribution

  channel, rapid technological advances.

 Product characteristics: quite, medium price, high

   print quality, leading technology, commodity–like,

   lighter and smaller, reasonable speed.

 Supply chain characteristics: centralized manufacturing,

   DCs fulfilling pure distribution functions, bulky products  

   resulting in long ocean transit, lean manufacturing shifts  

   inventory burden to DCs.

 What crisis: inventory imbalance, i.e., some product options  

  having excess inventory while some others have shortages.

What caused it:

  ∙ many product options due to geography,

  ∙ long DC replenishment lead time,        

  ∙ highly uncertain market,

  ∙ inflexible design : not easy to rework one

     option to make it into another,

  ∙ out of control inventory system,

  ∙ uncoordinated functional interests (manufacturing,

     distribution, marketing, engineering )

                 ∙  High inventory

                   ∙  Poor customer service

                     ∙  High manufacturing cost

                     ∙  High cost of after-sales support

                     ∙  Forecasting nightmare

                     ∙  High obsolescence at end-of-life

                       ∙  High overhead support

                Inventory control system used:

                   Periodic review, order-up-to system.

                Key drivers of safety stock:

1. Service target

1. Variability: Std deviation of demand

            3.  Lead time

            4.  Review period

 Safety stock = Safety factor *Std. Dev of exposure demand

[pic 1]

                √(Lead time + Review Period)*Std. Dev of Demand