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1COMM 399-972Logistics and Operations ManagementClass 11-1: Supply Chain Management- HP Case and PostponementAug 11, 20151Selling HP Deskjet in Europe2
2HP Deskjet Case: Background•Manufacturing in Vancouver WA–Plant is capable of high volume, high speed –Can manufacture many different models–“Stockless” factory: pull mode•3 DC’s: North America, Asia, Europe–simple standardized process–“Just-in-time”: Target Inventory level•Brent’s two main issues–High product availability while keeping inventory low–Agreement among parties for the right level of inventory•Retailers wanted low inventory level while providing high level of inventory•DC had to carry high level of inventory from make-to-stock mode factory•Transportation lead times–Europe & Asia: 5 weeks–US: 1 day3HP Deskjet Case: Analysis•What are HP’s options?4Problem (Europe)Causes•High inventory levels•Low product availability•Long Lead Time•Printer Market is Competitive (requriehigh service level)•Product differentiation (six models)•Demand variability
3HP Deskjet Case: Options•Rationalize Safety Stock5•More inventory•European factory•Air shipment •Better forecasting•DC localizationShort Term OptionsLong Term Options•Advantages, disadvantages of each options?