HP deskjet Essay

Case Hewlett-Packard-Supplying the Deskjet Printer in europium The DeskJet printer was introduced in 1988 and has become one of Hewlett-Packards (HPs) most successful outputs. Sales deport grown steadily, reaching a take of over 600,000 units in 1990. Unfortunately, roll growth has tracked gross sales growth closely. HPs distribution centers atomic number 18 filled with pallets of the DeskJet printer. Worse yet, the organization in Europe claims that inventory levels there need to be raised even further to maintain satisfactory product availability. THE DESKJET SUPPLY CHAINThe network of suppliers, manufacturing sites, distribution centers (DCs), dealers, and customers for the DeskJet product make up the DeskJet supply chain (see submit 17.14). HP in Vancouver does manufacturing.There are two key stages in the manufacturing process (1) printed dress circle gathering and test (PCAT) and (2) final assembly and test (FAT). PCAT involves the assembly and testing of electronic c omponents (like integrated circuits, read-only memories, and raw printed circuit boards) to make logic boards used in the printer. FAT involves the assembly of other subassemblies (like motors, cables, keypads, plastic chassis, gears, and the printed circuit assemblies from PCAT) to generate a working printer, as well as the final testing of the printer. The components needed for PCAT and FAT are sourced from other HP divisions as well as from external suppliers worldwide. divulge 17.14 HP DeskJet Supply ambitSelling the DeskJet in Europe requires customizing the printer to meet the language and power supply requirements of the local countries, a process known as localization. Specifically, the localization of the DeskJet of different countries involves assembling the appropriate power supply module, which reflects the square up voltage requirements (110 or 220) and power cord plug, and packaging it with the working printer and a manual create verbally in the appropriate languag e.Currently, the final test is done with the actual power supply module include with the printer. Hence, the finished products of the factory are localized versions of the printer destined for all the different countries. For the European grocery store six different versions are currently produced. These are designated A, AA, AB, AQ, AU, and AY asindicated in the Bills of Materials shown inExhibit 17.15.Exhibit 17.15 HP DeskJet Bill of MaterialsThe total factory throughput time through the PCAT and FAT stages is about one week. The transference time from Vancouver to the European DC is five weeks. The long expeditiousness time to Europe is due to naval transit and the time to clear customs and duties at port of entry. The plant sends a weekly shipment of printers to the DC in Europe.The printer industry is upliftedly competitive. Resellers want to carry as little inventory as possible. Consequently, there has been increasing pressure for HP as a manufacturer to provide high lev els of availability at the DC. In response, management has decided to stock the DCs so that a high level of availability is maintained.THE INVENTORY SERVICE CRISISTo limit the amount of inventory throughout the DeskJet supply chain and at the same time provide the high level of service needed has been quite a repugn to Vancouvers management. The manufacturing group has been very successful in reducing the uncertainties caused by delivery to the European DC. prognosticate demand in Europe, though, is a significant problem. It has become common to have product shortages for model demands from just about countries, while inventory of other models keeps piling up.In the past, the target inventory levels at the DCs were based on arctic stocks that were a result of some judgmental rule of thumb. Specifically, target inventory levels, equal to one-month second-rate sales, were set for each model carried in the DC. Now, however, it seems that the increasing difficulty of getting accura te forecasts means the safety stock rules should be revisited.HP has put together a team of employees to help implement a scientifically based safety stock system that entrust be responsive to forecast errors and successor lead times. They are to recommend a method for calculating appropriate safety stock levels for the discordant DeskJet models carried inthe European DC. The team has a good sample of demand data that can be used for developing the safety stock methodology (see Exhibit 17.16). HP hopes this new methodology will solve the inventory and service problem.