Hp Case
CASE: GS-3A DATE: 05/01 (Rev’d. 3/8/04)
Hewlett-Packard Company DeskJet Printer Supply Chain (A)
INTRODUCTION Brent Cartier, Manager for Special Projects in the Materials Department of Hewlett-Packard (HP) Company’s Vancouver Division, clicked off another mile. It had been a long week and it looked like it would be a long weekend as well, based on the preparation that needed to be done for Monday’s meeting with Group Management on worldwide inventory levels for the DeskJet Printer product line. Even when he was busy, he always took the time for the seven-mile bike ride into work—it helped reduce stress in times like this … The DeskJet printer was introduced in 1988 and had become one of HP’s most successful products (Exhibit 1). Sales had grown steadily, reaching a level of over 600,000 units in 1990 ($400 million). Unfortunately, inventory growth had tracked sales growth closely. Already, HP’s distribution centers had been filled with pallets of the DeskJet printer. Worse yet, the organization in Europe was claiming that inventory levels there needed to be raised even further to maintain satisfactory product availability. Each quarter, representatives from the production, materials and distribution organizations in Europe, Asia Pacific and North America met to discuss the “I-word,” as they referred to it, but their conflicting goals prevented them from reaching consensus on the issues. Each organization had a different approach to the problem. Production had not wanted to get involved, claiming it was “just a materials issue,” but had taken the time to rant about the continued proliferation of models and options. The distribution organization should have to track and store warehouses of inventory, just because Vancouver Division couldn’t build the right products in the right quantities. The European distribution organization had even gone so far as to suggest that they charge the cost of the extra warehouse space that they were renting back to Vancouver
Hewlett-Packard Company DeskJet Printer Supply Chain (A)
INTRODUCTION Brent Cartier, Manager for Special Projects in the Materials Department of Hewlett-Packard (HP) Company’s Vancouver Division, clicked off another mile. It had been a long week and it looked like it would be a long weekend as well, based on the preparation that needed to be done for Monday’s meeting with Group Management on worldwide inventory levels for the DeskJet Printer product line. Even when he was busy, he always took the time for the seven-mile bike ride into work—it helped reduce stress in times like this … The DeskJet printer was introduced in 1988 and had become one of HP’s most successful products (Exhibit 1). Sales had grown steadily, reaching a level of over 600,000 units in 1990 ($400 million). Unfortunately, inventory growth had tracked sales growth closely. Already, HP’s distribution centers had been filled with pallets of the DeskJet printer. Worse yet, the organization in Europe was claiming that inventory levels there needed to be raised even further to maintain satisfactory product availability. Each quarter, representatives from the production, materials and distribution organizations in Europe, Asia Pacific and North America met to discuss the “I-word,” as they referred to it, but their conflicting goals prevented them from reaching consensus on the issues. Each organization had a different approach to the problem. Production had not wanted to get involved, claiming it was “just a materials issue,” but had taken the time to rant about the continued proliferation of models and options. The distribution organization should have to track and store warehouses of inventory, just because Vancouver Division couldn’t build the right products in the right quantities. The European distribution organization had even gone so far as to suggest that they charge the cost of the extra warehouse space that they were renting back to Vancouver