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Hewlett-Packard Supply Chain
The Hewlett-Packard supply chain consists of “manufacturing, research and development (R&D) sites in 16 countries, and sales and service offices in 110 countries” (Lee and Billington, 1995, p. 43).
As suggested by Lummus and Vokurka (1999) in their study, supply chain cha be defined with the help of the following description, “the processes from the initial raw materials to the ultimate consumption of the finished product linking across supplier user companies” (p. 11). I other words, HP needed a supply chain that would make them more competitive than their rivals and enable them to deliver products manufactured on time in a timely manner.
The supply chain later used in Hewlett-Packard was developed after weighing up the uncertainty issues, identifying and solving the data recording problems, trying to forecast the preferences of customers and probability of orders in future periods of the fiscal year.
For instance, HP “often contracts for raw materials eight months or more before the final product will reach finished goods inventory” (Davis, 1993, p. 39). In this respect, the new strategy was called to analyzing the gaps and drawbacks and applying the latest inventions to the operation.
Strategic Goals of HP
As Hewlett-Packard deals with processing of orders, manufacturing of products and delivery, the company’s CEO and president Lew Platt recognize the necessity of changes and improvements and introduced new strategic goals.
So, Lew Platt identified the key strategic goals for the company in the period of 1993 fiscal year as the most important ones to win the competitive battle and order fulfilment became the top important issue for the managerial. In other words, the company’s goal was to analyze the uncertainties with regard to operational performance and improve the delivery of products as a part of the supply chain.
This supply chain supports the strategic goals of Hewlett-Packard designed for this period by improving the fulfilment of orders as a part of supply chain.
In other words, the WINO (Worldwide Inventory Network Optimizer) was applied to optimize the supply chain for HP that included identification and representation of each separate operation in the network of other operations on every order to increase the forecasting effectiveness; “receiving and production” became the two main operations in the supply chain (Lee and Billington, 1995, p. 47). So, the goal of order fulfilment was supported by improved supply chain that was also improved.
HP supply Chain
As analysis of supply chain was performed, each site identified the prioritizing areas of concern and the areas for investments. In this respect, the strengths of the HP supply chain include that it enables the company to make adequate decisions on each order and fulfil the order in a timely manner attracting more customers and developing the customer loyalty. Besides, supply chain modelling transferred to HP made it possible to map out the problems and identify the less effective areas and solve problems with regard to the identified gaps.
The weaknesses of supply chain still include inventories that depend on forecasting of customer demands and analysis of uncertainties that always occur in any business. The only thing that can be done on this issue has been applied to Hewlett-Packard by prioritizing the area for investment by excluding uncertainties in turn. However, all these weaknesses can be contrasted to strengths that make HP one of the leading companies due to their advanced supply chain management.
Davis, T. (1993). Effective supply chain management. Sloan Management Review (Summer), 35-46.
Lee, H. L., and Billington, C. (1995). The evolution of Supply-chain-management models and practice at Hewlett Packard. Interfaces, 25 (5), 42-63.
Lummus, R. R., and Vokurka, R. J. (1999). Defining supply chain management: a historical perspective and practical guidelines. Industrial Management and Data Systems, 99 (1), 11-17.