PowerPoint Presentation

Hewlett-Packard Company:Network Printer Design For UniversalityPresented by: Waqas Iqbal & Cao ZhiChao

1 The Hewlett-Packard CompanyHP was one of the silicon valleys legends.Innovation was the key to HPs strategy & brought the world products such as- - Hand held calculator - Ink-jet printers etc.HP spends about 10% of its revenue on R&D.In 1990, HPs revenue was 13.2b$ and profit was 739m$.HP held a dominant 57% of the worldwide laser printer market.

Network Laser Printer Division Wants to introduce a new product (Rainbow). Having Universal power supply.Next generation printer.High end printer with special configuration options.High customization variety.

HP Company Main Issues-The power specification for printer is different in North America(110 volt) and European (220 volt). This difference brings a big challenge in HPs market forecasting, Stock out and transshipment between regions.Long Lead time for engine manufacturing (at least 14 weeks).If universal power supply is used then increase of 30$ cost for each printer.

Universal Power SupplyCost and Benefits over Product Life cycleAt the beginning of the life cycle, cost of stock out would be high.At the maturity stage, extra cost can be a real disadvantage. However better forecasting of demand helps lower the level of inventory.At the ending life cycle, cost of stock out is lower than compared to at beginning because there is less fear of losing sales.

Postponement StrategyDelay the point of differentiation Under postponement certain part of the supply chain are undertaking a push strategy while other parts perform a pull strategy- - Upstream suppliers provides commodity parts using a push strategy - Downstream supplier employ a pull strategy & do not customize products or services until an order is placed

Cost Impact Of PostponementDecreaseInventory carrying cost Inventory holding costStock out costStandardization decreases admin costAdditional cost of transshipping Increase$30 material costProduct/Process redesign for standardization may increase system costBenefits Of PostponementLower risk of unsold items.Easier upgrade, service at customer location.Increased order fulfillment.Faster response to customer.LearningPostponement is the key strategy for providing multiple configurable products at low cost.If the design of a product is modular than we can manufacture modules separately and at the same time. This shorten the total time required for production.Modular design also helps in late product life cycle.

QuestionsIn what way is a universal power supply a postponement strategy? Sol: 1, Manufacturing is the foundation of core production stage. 2, Integration is the core part of product and key components together. 3, Custom is further with different accessories together to form a significant differences between the products. 4, In local, for product localization measures to adapt to the local requirements of different countries and regions.

Questions2. What are the costs and benefits of a universal power supply? Sol: Costs: higher cost per units=$50 lengthen Break-Even Time problems allocating supply Benefits: increase forecast accuracy less safety stock required fewer lost sales fewer stock out

QuestionsHow would such costs and benefits be different over the product life cycle? Sol: Over the product life cycle, both costs and benefits are different. At the beginning life cycle of product, the cost of stock out would be high. Every order lost would not only result in lost in revenue but also future revenue.

At the ending life cycle, cost of stock out is lower than compared to at beginning. There is less fear of losing future sale.

Questions4. Besides deciding on a universal power supply, what other operational improvements can you suggest to HP Boise? Sol: 1, HP should consider is improving forecasting ability to ensure appropriate demand is met in all sector while optimizing inventory level. 2, HP should look into creating similar standardization of power supply in other product offering such as workstations and servers.Questions5. What would be your recommendations about the adoption of a universal power supply? Sol: Recommendations:

Recommend HP to adopt universal power supply as the potential outweigh the costs.

It will add value to customer in sense HP may be the only company that offers universal power supply.

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